Rosewind CORP (Form: 8-K, Received: 04/22/2015 17:12:08)

Establish ORP values in ejaculates of with different clinical characteristics.

1.      Establish the ORP values in seminal ejaculates in infertile men in the absence or presence of leukocytes (Endtz negative and Endtz positive) samples.

2.      Establishing ORP in healthy normozoospermic donors and infertile men with an abnormal spermiogram

3.      Examine effect of abstinence on ORP in semen samples from normozoospermic donors

4.      ORP levels in infertile men with varicocele

Specific and different ORP values will be established in the ejaculates from men with different pathologies

The ORP values correlate with ROS-TAC scores in ejaculates of healthy men.

1. Comparative study between ORP and. ROS–TAC scores as measured by chemiluminescence and total antioxidant capacity

A positive correlation will be found between ORP values and ROS-TAC scores

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): April 16, 2015

ROSEWIND CORPORATION

(Exact name of registrant as specified in its charter)

Colorado

000-53121

47-0883144

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

373 Inverness Parkway

Suite 200

Englewood, Colorado

80112

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (720) 437-6500

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS


	Page No.
Special Note Regarding Forward-Looking Statements		2
Item 1.01 Entry into a Material Definitive Agreement		4
Item 2.01 Completion of Acquisition of Disposition of Assets		4
Business		6
Risk Factors		45
Management’s Discussion and Analysis of Financial Condition and Results of Operations		80
Management		88
Executive Compensation		96
Security Ownership of Certain Beneficial Owners and Management		102
Related Party Transactions		104
Description of Our Securities		107
Market Price of and Dividends on Registrant’s Common Stock and Related Stockholder Matters		108
Recent Sales of Unregistered Securities		112
Indemnification of Directors and Officers		114
Financial Statements		115
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		115
Item 3.02 Unregistered Sales of Equity Securities		116
Item 4.01 Changes in Registrant’s Certifying Accountant		116
Item 5.01 Changes in Control of Registrant		117
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers		117
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year		117
Item 8.01 Other Events		118
Item 9.01 Financial Statements and Exhibits		118

As used in this Current Report on Form 8-K, unless the context indicates or otherwise requires, all references to “Rosewind” refer to Rosewind Corporation, a Colorado corporation; all references to “Vyrix” refer to Vyrix Pharmaceuticals, Inc., a Delaware corporation; all references to “Luoxis” refer to Luoxis Diagnostics, Inc., a Delaware corporation; all references to “Ampio” refer to Ampio Pharmaceuticals, Inc.; all references to the “Combined Company,” “we,” “our” and “us” refer to Rosewind from and after the closing of the Merger.

This Form 8-K includes industry and market data and other information, which we have obtained from, or is based upon, market research, independent industry publications or other publicly available information. Although we believe each such source to have been reliable as of its respective date, we have not independently verified the information contained in such sources. Any such data and other information is subject to change based on various factors, including those described below under the heading “Risk Factors” and elsewhere in this Form 8-K.

We own various U.S. federal trademark registrations and applications, and unregistered trademarks and servicemarks, including Zertane, Vyrix, RedoxSYS and Luoxis. All other trademarks or trade names referred to in this Form 8-K are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Form 8-K may be referred to without the ^® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend or use or display of other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

SPECIAL NOTE REGARDING FORWARD LOOKING-STATEMENTS

This Current Report on Form 8-K, including the sections entitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” contains forward-looking statements that are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this prospectus include, but are not limited to, statements about:

•

our need for, and ability to raise, additional capital;

•

the number, designs, results and timing of our clinical trials;

•

the regulatory review process and any regulatory approvals that may be issued or denied by the Food and Drug Administration or other regulatory agencies;

•

our need to secure collaborators to license, manufacture, market and sell any products for which we receive regulatory approval in the future;

•

our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others;

•

the therapeutic benefits, effectiveness and safety of our products and product candidates;

•

the accuracy of our estimates of the size and characteristics of the markets that may be addressed by our products and product candidates;

•

our ability to manufacture sufficient amounts of our product candidates for clinical trials and products for commercialization activities;

•

the commercial success and market acceptance of any of our product candidates that are approved for marketing in the United States or other countries;

•

the safety and efficacy of medicines or treatments introduced by competitors that are targeted to indications which our product candidates have been developed to treat;

•

our current or prospective collaborators’ compliance or non-compliance with their obligations under our agreements with them; and

•

other factors discussed elsewhere in this Form 8-K or the documents incorporated by reference herein.

In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under “Risk factors” and elsewhere in this Form 8-K. If one or more of these risks or uncertainties occur, or if our

underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this Form 8-K and the documents that we reference in this Form 8-K and have filed with the Securities and Exchange Commission as exhibits to this Form 8-K completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements.

The forward-looking statements in this Form 8-K represent our views as of the date of this Form 8-K. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this prospectus.

Item 1.01. Entry into a Material Definitive Agreement.

Reference is made to the disclosure set forth under Item 2.01 of this Current Report on Form 8-K, which disclosure is incorporated herein by reference.

On April 22, 2015, we entered into a Voting Agreement with Ampio Pharmaceuticals, Inc., or Ampio, a Delaware corporation. Pursuant to the Voting Agreement, Ampio agreed to vote all of the shares of our common stock beneficially owned by Ampio at a special meeting of our stockholders or by written consent in favor of the following proposals approved by our Board of Directors and authorizing us to (1) re-incorporate into the State of Delaware through a plan of conversion; (2) effectuate a reverse stock split of our common stock, at a ratio of one new share for every approximately 12.174 shares currently outstanding; (3) change our name from “Rosewind Corporation” to “Aytu Bioscience, Inc.”; and (4) approve a new stock option and incentive plan. The Voting Agreement will remain in effect until our stockholders approve the foregoing proposals. Ampio is the holder of approximately 81.5% of our common stock.

The description of the Voting Agreement set forth herein does not purport to be complete and is qualified in its entirety by reference to the full text thereof, which is attached hereto as Exhibit 10.13.

Item 2.01 Completion of Acquisition or Disposition of Assets.

On April 16, 2015, pursuant to an Agreement and Plan of Merger, or the Merger Agreement, entered into among Rosewind, Luoxis, Vyrix, and two subsidiaries of Rosewind created solely for the purposes of the Merger, and which did not survive the Merger, the Merger occurred in two stages.

In the first stage, each of Vyrix and Luoxis merged with one of Rosewind’s merger subsidiaries. Vyrix and Luoxis survived these mergers. The outstanding shares of stock of Vyrix and the outstanding shares of stock of Luoxis were converted into the right to receive shares of common stock in the Combined Company. The Vyrix stock and the Luoxis stock were each converted at an exchange factor. The exchange factor for each of them was determined upon the basis of a relative value opinion obtained by Ampio, the parent company of Vyrix and Luoxis. The outstanding shares of Rosewind’s merger subsidiary that merged with Vyrix were converted into shares of Vyrix as the surviving corporation. The outstanding shares of Rosewind’s merger subsidiary that merged with Luoxis were converted into shares of Luoxis as the surviving corporation. After completion of the first stage, Vyrix and Luoxis became subsidiaries of Rosewind.

In the second stage, which occurred on the same day as the first stage, each of Vyrix and Luoxis merged with Rosewind with Rosewind surviving. The first and second stage mergers are referred to collectively as the “Merger.”

Concurrently with the Merger:

•

The board of directors of Rosewind, whose sole member was James Wiegand, increased the number of directors by one, and appointed Michael Macaluso to fill the vacancy created by that increase. James Wiegand resigned from the board immediately thereafter. The board of directors of Rosewind, whose sole member is Michael Macaluso, then appointed Joshua Disbrow as Chief Executive Officer, Jarrett Disbrow as Chief Operating Officer and Gregory A. Gould as Chief Financial Officer of the Combined Company.

•

Ampio purchased 57,970,000 shares of common stock of the Combined Company for (i) issuance to Rosewind of a promissory note of Ampio in the principal amount of $10,000,000, maturing on the first anniversary of the Merger; (ii) cancellation of indebtedness of Luoxis to Ampio in the amount of $8,000,000; and (iii) cancellation of indebtedness of Vyrix to Ampio in the amount of $4,000,000.

•

James Wiegand entered into a consulting agreement with the Combined Company with a one year duration, providing for compensation of $50,000 to him.

•

Each of James Wiegand and Michael Wiegand executed a release in favor of the Combined Company.

•

Each of Ampio, James Wiegand and Michael Wiegand entered into a lock-up agreement with the Combined Company agreeing not to sell its shares of the Combined Company for two years (except for the one with Ampio, for more than three years). The lock-up agreements other than the one with Ampio release 25% of the shares subject to it on June 30, 2015. The Ampio lock-up agreement terminates upon a change-in-control event of either the Combined Company or Ampio. Each other lock-up agreement terminates upon a change-of-control event of the Combined Company.

•

Joshua Disbrow entered into an employment agreement with the Combined Company.

•

Jarrett Disbrow entered into an employment agreement with the Combined Company.

The Merger Agreement contemplates the reincorporation of the Combined Company in Delaware, as a corporation, with the name Aytu Biosciences, Inc. as soon as is reasonably practicable after the closing of the Merger. The reincorporation is also expected to result in the reduction of the number of shares of stock outstanding in the Combined Company equivalent to a reverse stock split at the rate of approximately 12.174 to 1.

Accounting Treatment

The Merger has been accounted for as a reverse-merger and recapitalization. Vyrix and Luoxis, collectively, is the acquirer for financial reporting purposes and Rosewind is the acquired company. Consequently, the assets and liabilities and the operations that will be reflected in the historical financial statements prior to the Merger will be those of Vyrix and Luoxis and will be recorded at the historical cost basis of Vyrix and Luoxis, and the consolidated financial statements after completion of the Merger will include the assets and liabilities of Rosewind, Vyrix and Luoxis, the historical operations of Vyrix and Luoxis and the operations of the Combined Company from and after the closing date of the Merger.

Tax Treatment

The Merger is intended to constitute a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended.

Background of Rosewind

Rosewind was incorporated on August 9, 2002 in the State of Colorado. Rosewind filed a registration statement on Form SB-2 (File No. 333-139933) that was declared effective by the SEC on May 11, 2011, and sold an aggregate of 239,000 shares of its common stock under that registration statement. Prior to the Merger, Rosewind intended to develop a sailing school. Upon the closing of the Merger, the Combined Company has abandoned those business plans and is now pursuing the business of Vyrix and Luoxis. Upon closing the Merger, our executive offices are relocated to those of Luoxis and Vyrix at 373 Inverness Parkway, Suite 200, Englewood, Colorado 80112. Our telephone number is (720) 437-6580, and our corporate website is www.aytubio.com . The information on, or accessible through, our website does not constitute part of, and is not incorporated by reference into, this Form 8-K.

BUSINESS

Corporate Overview

Rosewind was incorporated on August 9, 2002 in the State of Colorado.

Vyrix was incorporated under the laws of the State of Delaware on November 18, 2013 and was wholly owned by Ampio Pharmaceuticals, Inc. (NYSE MKT: AMPE), or Ampio, immediately prior to the completion of the Merger. Vyrix was previously a carve-out of the sexual dysfunction treatment business, including the late-stage men’s health product candidates, Zertane and Zertane-ED, from Ampio, which was announced in December 2013.

Luoxis was incorporated under the laws of the State of Delaware on January 24, 2013 and was majority owned by Ampio immediately prior to the completion of the Merger. Luoxis is focused on developing and advancing the RedoxSYS system.

On March 20, 2015, Rosewind formed Rosewind Merger Sub V, Inc. and Rosewind Merger Sub L, Inc., each a wholly-owned subsidiary formed for the purpose of the Merger, and on April 16, 2015, Rosewind Merger Sub V, Inc. merged with and into Vyrix and Rosewind Merger Sub L, Inc. merged with and into Luoxis, and Vyrix and Luoxis became subsidiaries of Rosewind. Immediately thereafter, Vyrix and Luoxis merged with and into Rosewind with Rosewind as the surviving corporation. Concurrent with the closing of the Merger, Rosewind abandoned its pre-merger business plans to develop a sailing school, and we now solely pursue the business of Vyrix and Luoxis in the healthcare industry. The following discussion describes the business being pursued by the Combined Company.

Business Overview

We are a specialty healthcare company concentrating on developing and commercializing products for redox-modulated conditions with an initial focus on urological indications and related conditions. We are focused primarily on the urological disorders market and specifically sexual dysfunction and male infertility and expect to seek expansion opportunities in other urological indications such as urological cancers. Our Luoxis division maintains a focus on the RedoxSYS oxidation-reduction potential system. Through the Luoxis division, we are focused on commercializing the RedoxSYS system into the global research market while developing numerous clinical applications for this potential first-in-class diagnostic device.

The global urological disorders market is forecast to exceed $10 billion by 2017. With a Compound Annual Growth Rate, or CAGR, of 7.9% between 2002 and 2010, the urology market is a substantial growth market with significant medical needs still unaddressed.

The premature ejaculation market alone is expected to reach over $1.3 billion in annual sales in 2015, representing an increase of 10.3% since 2010. According to recent published analyses, premature ejaculation, or PE, is a highly prevalent male sexual dysfunction affecting 20-30% of men worldwide. Based on internal market research and published reports, we believe that PE is up to 1.5-times more prevalent than erectile dysfunction, or ED. Currently, there are no FDA-approved prescription products in the United States to treat PE, and to our knowledge, only two other prescription products have been approved elsewhere in the world. Treatment options for PE have traditionally included antidepressant drugs prescribed “off label,” topical numbing medications, and cognitive behavior therapy or counseling, all of which have had limited effectiveness in treating the disorder. PE therefore represents an area of significant unmet medical need. In addition, approximately 32% of the more than 12,000 men with PE surveyed in a 2007 study published in European Urology also suffered from ED. Accordingly, we believe that a combination product candidate to treat both PE and ED represents another significant worldwide market opportunity for us.

We are actively developing the global market for the RedoxSYS system across a range of applications. Specifically, we have begun commercializing RedoxSYS system for research use through direct selling, distribution partners, and academic collaborators. Over the past 18 months, we have engaged in over 60 trials around the world whereby prominent researchers are implementing oxidation-reduction potential as a marker in both chronic and acute illnesses and disorders in both clinical research as well as basic science research.

Through our extensive network of researchers, RedoxSYS system has demonstrated the potential to have broad clinical applications. Studies are now underway at a major U.S. university in the area of male infertility. This condition is prevalent, underserved, and oxidative stress is widely implicated in its pathophysiology. As such, we expect to bolster our research focus in this area with RedoxSYS system to complement our focus on urologic conditions. The male infertility market is expected to grow to over $300 million by 2020 with a CAGR of nearly 5% from 2013 to 2020. Oxidative stress is broadly implicated in the pathophysiology of oxidative stress, yet very few diagnostic tools exist to effectively measure oxidative stress levels in men. However, antioxidants are widely available and recommended to infertile men. With the introduction of the RedoxSYS system, we believe for the first time there will be an easy and effective diagnostic tool to assess degree of oxidative stress and monitor patients’ responses to antioxidant therapy.

The following table summarizes our most advanced development programs:

LOGO

*	505(b)(2) regulatory pathway

**	510(k) de novo regulatory pathway

Zertane

Our premature ejaculation product candidate, Zertane, is a specifically formulated orally disintegrating tablet, or ODT, of tramadol hydrochloride patented for the on-demand treatment of PE. Zertane is being developed utilizing a regulatory pathway pursuant to Section 505(b)(2) of the Food, Drug and Cosmetic Act, as amended, or the FDCA, as the active ingredient is already well characterized for the treatment of pain, and we are relying on the FDA’s finding of safety of tramadol hydrochloride to support its use in a new indication, PE, at a lower dose. If we receive marketing approval for Zertane, we believe it will be the first commercial product approved by the United States Food and Drug Administration, or FDA, for PE.

By virtue of significant development work performed by a previous partner of Ampio, Zertane has already been evaluated outside the United States in two Phase 1 clinical trials, two Phase 2 clinical trials and two Phase 3 clinical trials. The two Phase 1 safety trials were conducted to characterize the concentration of tramadol hydrochloride in plasma after oral administration of a single Zertane ODT (89 mg) in healthy volunteers. Two randomized, placebo-

controlled, blinded Phase 2 clinical trials were conducted in a total of 102 patients. These trials evaluated doses of tramadol hydrochloride between 25 and 120 mg in male subjects with PE. Two placebo-controlled, randomized and double-blind Phase 3 clinical trials were conducted in Europe to investigate tramadol hydrochloride 62 mg and 89 mg ODT for the treatment of PE when taken as needed between two and eight hours before a sexual event. This development work has demonstrated a favorable safety and efficacy profile of Zertane in men with PE. Furthermore, the safety and pharmacology of the drug substance in Zertane, tramadol hydrochloride, is well characterized, which will eliminate the need for us to conduct additional pre-clinical studies and safety trials. Based on guidance received at a recent consultation meeting with the FDA, we believe we are well positioned to initiate a Phase 3 clinical program with Zertane in the United States. Specifically, we believe the meeting clarified specific aspects of the trial, including the primary efficacy endpoints and patient inclusion and exclusion criteria. The FDA agreed to review a draft study protocol in advance of us submitting our Investigational New Drug application, or IND. Upon completion of the program, if successful, we plan to submit a New Drug Application, or NDA, and subsequently market Zertane in the United States, if approved.

Zertane-ED

In addition to Zertane, we also have an early-stage combination product candidate, Zertane-ED, which is a combination of Zertane and an FDA-approved phosphodiesterase type 5, or PDE-5, inhibitor, a category of drug that is found in commonly used treatments for ED (e.g., Viagra, Cialis, Levitra, or Stendra), designed to treat both PE and ED. In light of the fact that approximately 32% of men with PE also suffer from ED, according to a 2007 study published in European Urology , we believe that a combination of tramadol hydrochloride with a PDE-5 inhibitor, if approved, would benefit men that experience both distinct problems. If, and when, the FDA accepts filing of our NDA for Zertane, we will commence developing the Zertane-ED fixed dose combination product candidate. Formulation development, stability studies and analytical work as well as manufacturing of clinical supplies in compliance with current good manufacturing practices, or cGMP, have already been completed by a contract manufacturer, and our collaboration with Daewoong Pharmaceutical Co., Ltd., or Daewoong, in South Korea will provide development support to complement our U.S. development efforts.

RedoxSYS system for Research Use

We completed the development of the RedoxSYS system during the two years preceding the Merger. In 2014, we received ISO 13485 certification, demonstrating our compliance with global quality standards in medical device manufacturing. This enabled the launch of the RedoxSYS system into the research market around the world. We also received a CE marking in Europe and Health Canada clearance to begin the market development of the RedoxSYS system as a clinical diagnostic in Europe, Canada, and elsewhere around the world where CE marking is recognized. We launched sales efforts into the research market in late 2014 and since that time have already placed the RedoxSYS system at a number of prominent research centers in the United States, Europe, and Israel. These research placements are depicted below.

LOGO

Prominent U.S. Research Centers

LOGO

Prominent Centers in Europe and Israel

We expect to leverage these research relationships and build numerous applications in areas where researchers are studying oxidative stress. Currently, there are no available research platforms that measure oxidation-reduction potential in biologic fluids (i.e., blood, plasma, serum, semen, seminal fluid, cerebrospinal fluid, tissue, and cells). While oxidative stress is commonly studied in research settings around the world (both academia and industry), the current assessment methods are incomplete, time consuming, and often impractical for assessing oxidative stress completely. To position RedoxSYS system effectively in the research market, we have placed key personnel in the United States, Europe, and Asia to develop direct research business relationships as well as distribution networks. From these networks, we expect to realize product revenues for the RedoxSYS system for research applications in 2015.

RedoxSYS system for Reproductive Health

As part of our strategy to develop future clinical applications of the RedoxSYS system, we have conducted initial studies in reproductive health. Male infertility is a significant medical condition in which oxidative stress is well known to play a substantial role. As such, we believe developing a clinical application to assess oxidative stress levels with the RedoxSYS system represents a significant commercial opportunity. Oxidative stress is well established as a leading contributing factor to male infertility. Further, a significant proportion of male infertility remains unexplained in part because of the lack of standardized tests available to clinicians and researchers to assess oxidative stress in semen and plasma. This lack of standardization has resulted in poor implementation of semen and plasma analysis around the world.

We have conducted proof-of-concept studies in male infertility with a leading research center in the United States, which demonstrate that oxidation-reduction potential effectively measures oxidative stress levels in semen and seminal plasma. Semen analysis studies are routinely conducted to assess causes of infertility, so we expect clinicians and oxidative stress researchers to readily integrate the RedoxSYS system into routine use. Additional studies are now in the late planning stages that will evaluate the RedoxSYS system’s performance in the detection of oxidative stress levels in healthy and infertile males. Of the approximately $300 million male infertility market, the North American market and Asia Pacific market dominate due to prevalence, awareness of treatment, and availability of treatment resources. Thus, it is important that we have already established distribution relationships and direct access to major oxidative stress researchers in both markets.

An attractive aspect of the reproductive health market relates to reimbursement as infertility treatments and the associated diagnostic tests are generally paid directly by patients. The current infertility treatments could cost in excess of $10,000 per treatment cycle, so the addition of a moderately priced oxidative stress test would consume nominal relative costs while providing specific, actionable information needed to improve the oxidative status of infertile patients. The current infertility treatments include antioxidant supplements and lifestyle modifications that lower oxidative stress (e.g., smoking cessation, exercise, dietary changes, etc.), so the measurements reported by the RedoxSYS system could effectively guide treatment in the infertile patients.

We have an extensive range of intellectual property across our two primary, near-term assets. We have patent protection in the United States and several other large markets worldwide for the oxidation-reduction potential products and product candidates. Further, we have patent protection in the United States and several other large markets worldwide for the use of tramadol hydrochloride to treat PE. We also have intellectual property specifically covering Zertane-ED, and methods of using Zertane-ED to treat comorbid PE and ED that has issued patents in several large markets worldwide and is pending in the United States.

Our Strategy

Key elements of our strategy include:

•

Develop a pipeline of therapeutics and diagnostics focused on urological conditions, with a focus on the initiation and completion of two Phase 3 clinical trials for Zertane in the United States and the development of worldwide commercialization and marketing partnerships.

Our lead therapeutic product candidate is Zertane, a Phase 3-ready oral product for the treatment of PE. Zertane is in advanced clinical studies, and we have already completed pivotal study-enabling studies in Europe that demonstrate favorable efficacy and safety in more than 600 patients with PE. We intend to initiate and complete Phase 3 clinical trials in order to obtain FDA approval for Zertane. We expect to use a similar development approach for the combination product candidate, and we have a clinical development collaboration in place with our South Korean partner for Zertane-ED.

We intend to maximize the value of Zertane in the United States via either securing a licensing arrangement or commercializing it ourselves. We also expect to seek collaboration agreements to commercialize Zertane in the rest of world, or ROW, markets. We already have such agreements in place to commercialize Zertane in South Korea and Brazil, Canada, the Republic of South Africa, certain countries in Sub-Saharan Africa, Colombia and Latin America which will – if approved—provide royalty and milestone-based revenue for us.

•

Build our Luoxis division by initially positioning the RedoxSYS system as a research tool and expanding its application to other indications.

Our lead diagnostic product candidate is RedoxSYS system, which is currently being studied in clinical trials at a major U.S. academic center to evaluate its utility in measuring oxidative stress in infertile males. If successful, these clinical trials are expected to pave the way for our RedoxSYS system in entering the male infertility market around the world.

RedoxSYS system is expected to be commercialized initially as a research tool, and pending the outcome of our clinical studies – oxidative stress as a key indicator of male infertility – be commercialized for additional indications, if approved. Internationally, we intend to commercialize RedoxSYS system for multiple potential indications where oxidative stress is implicated, if approved. The United States will be our primary focus in terms of commercialization opportunities. However, we intend to leverage ROW opportunities to drive incremental revenue and adoption of our RedoxSYS system as well as to facilitate research to develop further redox-modulated application for our RedoxSYS system. We intend to utilize distribution partners in Europe, Asia, and elsewhere to launch and grow sales in both research and diagnostic applications. We have established research collaborations with over 20 leading academic centers around the world. Further, the RedoxSYS system has been used in numerous clinical studies supported by pharmaceutical companies. As oxidative stress is widely studied in both academic and industry settings, the research application of RedoxSYS system spans a wide range of applications in clinical research, basic science research, and health and wellness research. We seek, either directly or through distributors, to commercialize RedoxSYS system across a broad range of potential customers. To date, we have signed distribution agreements for the research market with four companies, including EuroBio in France, Una Health in the United Kingdom, THP Medical in Austria, and KYS Technologies in Taiwan. We expect to significantly expand our distribution network throughout 2015 to enable entry into major markets in Europe and Asia. We plan to commercialize directly in the United States. We expect these research collaborations will generate new findings and potential clinical applications for the RedoxSYS system. In turn, we believe this development of new data and publications will enable us to pursue adjunct conditions where oxidative stress is implicated.

•

Acquire established marketed products and late-stage development assets within our focus

In order to diversify our product portfolio and create more value, we intend to seek to acquire complementary products or product candidates to develop and/or commercialize including marketed assets. Initially, the focus will be on acquiring products or product candidates for urological conditions but we will opportunistically consider other products or product candidates based on their ability to create value and complement our focus. We plan to pursue product acquisitions, inclusive of therapeutics, diagnostics, and devices, which will be evaluated for their strategic fit and potential for near-term and/or accretive value to us.

Our Product Pipeline

Our Lead Therapeutic Product Candidates – Zertane and Zertane-ED

Our lead therapeutic product candidate, Zertane, is a specifically formulated orally disintegrating tablet, or ODT, of tramadol hydrochloride patented for the on-demand treatment of PE. Zertane is being developed utilizing a regulatory pathway pursuant to Section 505(b)(2) of the Food, Drug and Cosmetic Act, as amended, or the FDCA, as the active ingredient is already well characterized for the treatment of pain, and we are relying on the FDA’s finding of safety of tramadol hydrochloride to support its use in a new indication, PE, at a lower dose. If we receive marketing approval for Zertane, we believe it will be the first commercial product approved by the United States Food and Drug Administration, or FDA, for PE. In addition to Zertane, we also have an early-stage combination product candidate, Zertane-ED, which is a combination of Zertane and an FDA-approved phosphodiesterase type 5, or PDE-5, inhibitor, a category of drug that is found in commonly used treatments for erectile dysfunction, or ED (e.g., Viagra, Cialis, Levitra or Stendra), designed to treat both PE and ED.

According to recent published analyses, PE is a highly prevalent male sexual dysfunction affecting 20-30% of men worldwide. Based on internal market research and published reports, we believe that PE is up to 1.5-times more prevalent than erectile dysfunction. Currently, there are no FDA-approved prescription products in the United States to treat PE, and to our knowledge, only one oral prescription product has been approved elsewhere in the world. Treatment options for PE have traditionally included antidepressant drugs prescribed “off label,” topical numbing medications, and cognitive behavior therapy or counseling, all of which have had limited effectiveness in treating the disorder. PE therefore represents an area of significant unmet medical need. In addition, approximately 32% of the more than 12,000 men with PE surveyed in a 2007 study published in European Urology also suffered from ED. Accordingly, we believe that a combination product candidate to treat both PE and ED, such as Zertane-ED, represents another significant worldwide market opportunity for us.

By virtue of significant development work performed by a previous partner of Ampio, Zertane has already been evaluated outside the United States in two Phase 1 clinical trials, two Phase 2 clinical trials and two Phase 3 clinical trials. This development work has demonstrated a favorable safety and efficacy profile of Zertane in men with PE and helped inform the design and endpoints of the Phase 3 clinical trials we will need to obtain FDA approval. Furthermore, the safety and pharmacology of the drug substance in Zertane, tramadol hydrochloride, is well characterized, which we believe will eliminate the need for us to conduct additional pre-clinical studies and safety trials. We believe we are well positioned to initiate Phase 3 clinical trials with Zertane in the United States. Upon completion of the trials, if successful, we plan to submit a New Drug Application, or NDA, and subsequently market Zertane in the United States, if approved.

Our strategy for Zertane is focused on the initiation and completion of the Phase 3 clinical program in the United States and the development of worldwide commercialization and marketing partnerships. We expect to finalize clinical development of Zertane, seek FDA marketing approval and – if approved—commercialize the product candidate in the United States either directly or via partnerships. We will seek partnerships to commercialize Zertane in rest of world, or ROW, markets. We already have partnerships in place to market Zertane in South Korea and Brazil, which could provide near-term revenue for us if, working with our partners, we are able to successfully obtain regulatory approval in those countries. In addition, we recently entered into an agreement with Endo Ventures Limited, which recently acquired Paladin Labs Inc., or Paladin, a leading Canadian specialty pharmaceutical company, to provide exclusive rights to market, sell and distribute Zertane in Canada, the Republic of South Africa, certain countries in Sub-Saharan Africa, Colombia and Latin America. We also intend to build awareness of PE in the United States with the intention of paving the way for successful product introduction and initiate pre-clinical work on Zertane-ED as a potential combination treatment for PE and ED. We expect to use a similar clinical and commercial approach for Zertane-ED and we have a clinical development collaboration in place with our South Korean partner for the combination product candidate.

PE Market Opportunity

What is PE?

Medical literature contains several one-dimensional and multi-dimensional operational definitions of PE. The Diagnostic and Statistical Manual of Mental Disorders defines PE as persistent or recurrent ejaculation with minimal sexual stimulation before, on, or shortly after penetration and before the person wishes it, with the disturbance causing marked distress or interpersonal difficulty. Alternately, the International Society for Sexual Medicine, or the ISSM, has adopted a new and evidence-based definition for lifelong PE: “premature ejaculation is a male sexual dysfunction characterized by ejaculation which always or nearly always occurs prior to or within a minute of vaginal penetration; and inability to delay ejaculation on all or nearly all vaginal penetrations; and negative personal consequences, such as distress, bother, frustration and/or the avoidance of sexual intimacy.”

PE may be classified as lifelong (primary) or acquired (secondary). Lifelong PE is characterized by onset from the first sexual experience and remains a problem throughout life. Acquired PE is characterized by either a gradual or subtle onset, with ejaculation being considered normal before onset of PE. Time to ejaculation is short but not usually as fast as in lifelong (less than 1 minute in almost all encounters). We believe acquired PE and/or situational PE suggests a psychological cause and behavioral therapy and/or relationship counseling may be the most appropriate initial therapy. In contrast, we believe lifelong PE suggests a biogenic cause and pharmacologic treatment is the most appropriate initial therapy.

Ejaculation latency, most commonly quantified using intravaginal ejaculation latency time, or IELT, is a dominant component of PE assessment in clinical trials. IELT is defined as the time between vaginal intromission and intravaginal ejaculation. Although a standard cut-off for ejaculatory latency does not exist, it has been suggested that an IELT of 2 minutes or less may serve as an adequately sensitive criterion for defining PE and some studies have used IELT values from 1 to 2 minutes for defining PE. In a pre-IND meeting with FDA, we agreed to use an IELT of less than or equal to 1 minute as one of the enrollment criteria for our planned Phase 3 clinical trials.

However, IELT is not the sole criteria used to diagnose PE. We believe diagnosis of PE should also include a subject’s perceived control over ejaculation, as well as distress and interpersonal difficulty due to the condition. The need to objectively assess and diagnose PE beyond IELT has led to the development of several questionnaires within the male sexual dysfunction medical community including the Premature Ejaculation Diagnostic Tool (PEDT), Premature Ejaculation Profile, or PEP, the Index of Premature Ejaculation (IPE), and the Male Sexual Health Questionnaire Ejaculatory Dysfunction (MSHQ-EjD). In collaboration with the FDA, Ampio has also developed a modified version of PEP known as the Patient Outcome for Premature Ejaculation, referred to as the POPE.

Prevalence of PE

PE is a significant unmet medical need in the United States and worldwide as it causes significant emotional distress for affected men and their partners. According to an article published in European Urology in 2010 and a survey published in the Journal of the American Medical Association (JAMA) in 1999, PE is a highly prevalent male sexual dysfunction affecting 20-30% of men worldwide. However, most prevalence data on PE is based on patient surveys, which are inherently subjective, and therefore some of the men surveyed may not have PE as it is defined by the medical societies noted above. In a 2007 study published in European Urology , the incidence of PE was assessed via a web-based survey of 12,133 men ages 18-70 in the United States, Germany and Italy. In this survey 2,754, or 22.7%, of the men reported that they suffer from PE. The vast majority (87.9%) of men with PE wished that they had more control over time to climax. Additionally, a majority (57.6%) of the men surveyed reported that they would seek medical treatment if they knew that a pill to control ejaculation were available. We believe men would also ask their doctor about treatment options if their partner suggested it. Additional primary company market research indicated that over 66% of patients that see a urologist for PE were self-referred, which we believe further demonstrates that PE is a condition for which patients are actively seeking treatment.

Existing therapies do not satisfy the significant PE market need

Presently, there are no approved prescription pharmaceuticals in the United States to treat PE and only two pharmaceuticals known to be approved elsewhere in the world. Current “off label” or unapproved therapies used to treat PE carry with them unwanted side effects and inconsistent or limited effectiveness. Topical over-the-counter, or OTC, options are not preferred due to route of administration and may also have an impact on partner satisfaction. Oral therapeutics, specifically selective serotonin reuptake inhibitors, or SSRIs, carry potentially significant side effects most notably of which is diminished libido. PDE-5 inhibitors have been prescribed “off label” for PE but have not demonstrated efficacy. Outside of oral or topical therapeutics, non-medical options include behavioral therapy and relationship counseling, both of which can be time consuming and stressful and frequently ineffective for men and their partners.

The following table illustrates the current methods used to treat patients with PE and the associated issues based upon our sponsored market research:


Pharmacologic Treatment		Issues
Tricyclic antidepressants*		Fatigue, nausea, dizziness, dry mouth, hypotension
Short-acting SSRIs		Nausea, diarrhea, headache, dizziness, risk of suicidal ideation
Long-acting SSRIs*		ED, decreased libido, fatigue, nausea, increased perspiration
Topical desensitizing agents		Messy, numbing of vagina, skin irritation
PDE-5 inhibitors*		Ineffectiveness, headache, flushing, nausea

Non-Pharmacologic Treatment		Issues
“Stop-Start” strategy		Requires an understanding partner
“Squeeze” method		Requires an understanding partner
Psychological therapy		Time consuming for patients; costly, long-term benefits unknown



Pharmacologic Treatment		Issues
Relationship counseling		Time consuming, costly, requires an understanding partner

*	NOT approved for treatment of PE

We believe patients and their partners are generally dissatisfied with existing pharmacologic and non-pharmacologic treatments for PE. Based on primary market research commissioned by Ampio, our parent company, which included discussions with a cross section of clinicians that treat patients with PE, we believe that there are significant issues with existing PE treatments demonstrating a real need for a safe and effective, FDA-approved product to treat PE that does not have a ramp-up period. This primary market research supports that ideal product characteristics include:

•

Effectiveness;

•

Fewer side effects than anti-depressants, such as SSRIs, that are used “off-label” for PE; and

•

Quick onset/on-demand usage.

Zertane

Our lead therapeutic product candidate, Zertane for premature ejaculation, contains 89 mg tramadol hydrochloride in an orally dissolving tablet, or ODT. Tramadol hydrochloride is a well-established, centrally acting synthetic analgesic and has been used for more than 30 years as a treatment for moderate to severe pain. The drug and its active metabolite (M1, O -desmethyltramadol) act as an opiate agonist, apparently by selective activity at the µ-receptor. Although the mechanism by which tramadol hydrochloride delays ejaculation has not been identified, numerous laboratory studies have shown that tramadol hydrochloride also acts as an N -methyl-D-aspartate receptor antagonist, 5-hydroxytryptamine type 2C receptor antagonist, 5 nicotinic acetylcholine receptor antagonist, M1 and M3 muscarinic acetylcholine receptor antagonist, and a serotonin and norepinephrine modulator. It is possible that one or a combination of these effects leads to a delay in ejaculation. The relative contribution of tramadol hydrochloride versus its M1 metabolite to delay ejaculation is unknown. However, the metabolite is six times more potent than the parent drug in producing analgesia in animal models and 200 times more potent in µ-receptor binding. As a pain medication, tramadol hydrochloride has been associated with certain adverse effects including dizziness, nausea, constipation, vertigo, headache, vomiting and drowsiness. However, we intend that our labeling for Zertane, if regulatory approval is obtained, will suggest “as required” dosing before sexual intercourse and not to exceed one tablet per day. Based on previous clinical studies, we believe that limiting the dosing to no more than once per day will minimize any side effects.

As an alternative to antidepressant and anxiolytic medication, tramadol hydrochloride has been recognized as a potential therapy for treatment of PE, after an association was observed between its use and improvements in ejaculation latency time. The combination of completed clinical trials, primarily performed in Europe, planned clinical trials in the United States, and literature are intended to establish the safety and efficacy of Zertane in the treatment of the condition and standardize the dose and dosing regimen.

History of Zertane

Dr. David Bar-Or discovered the utility of tramadol hydrochloride for the treatment of PE in June 1999, and this discovery and accompanying intellectual property were the property of DMI BioSciences, Inc., or DMI BioSciences. DMI BioSciences conducted two Phase 2 clinical studies in male subjects with PE using a pharmacy-compounded gelatin capsule preparation. A proof-of-concept Phase 2 study was initiated in March 2003, and final patient assessments were on July 7, 2003. A dose-ranging study Phase 2 study was initiated in September 2004 and final patient assessments were in October 2005. In 2007, DMI BioSciences licensed the worldwide rights to tramadol hydrochloride for PE to Biovail Laboratories International, or Biovail.

Biovail had previously entered into a product development and licensing agreement with Ethypharm S.A., or Ethypharm, in 2002, which had developed an ODT formulation of tramadol hydrochloride using its proprietary FLASHTAB technology. In this agreement, Biovail acquired the rights to develop and market Ethypharm’s tramadol hydrochloride ODT product for use in the management of pain. In March of 2004, Biovail submitted a Section 505(b)(2) NDA (US NDA 21,639) to FDA for market registration of tramadol hydrochloride ODT 50 mg (RYBIX) for the management of moderate to moderately severe pain, and this NDA was granted approval in May 2005.

Biovail decided not to launch the RYBIX 50 mg ODT product in the United States, and in 2009, signed an NDA agreement with Ethypharm pursuant to which Ethypharm acquired all the rights to RYBIX 50 mg ODT and Biovail acquired the rights to develop, manufacture and market a FLASHTAB ODT product containing tramadol hydrochloride for the symptomatic treatment of PE. In this agreement, Biovail assigned to Ethypharm all of Biovail’s rights, title and interest in and to the approved NDA for RYBIX, the regulatory documentation and product rights to enable Ethypharm to develop and market RYBIX in the United States for the management of pain. In addition, the agreement granted Biovail the right to reference and use all data, regulatory filings and regulatory communication, including the approved NDA for RYBIX, the product rights (including any information, data, know-how, formulas, assays, or intellectual property contained in the approved NDA) and any and all related regulatory documentation that would be relevant for the purposes of developing, manufacturing or marketing the tramadol hydrochloride ODT product for PE.

Using the newly acquired FLASHTAB technology and manufacturing processes obtained in the NDA agreement with Ethypharm, Biovail developed two strengths of tramadol hydrochloride ODT (62 and 89 mg) for use in four NDA-enabling clinical trials: two Phase 1 pharmacokinetic/bioavailability and two Phase 3 placebo-controlled pivotal trials. These trials were initiated in the latter half of 2009. In July 2010, Biovail terminated the clinical trials in Europe as a direct result of a merger with Valeant Pharmaceuticals International, or Valeant, which was announced in June 2010 but was finalized in September 2010. Following the merger, Valeant adopted a new research and development model and began identifying product development programs that did not align with this new R&D model. In connection with this new R&D model, Valeant decided to terminate Biovail’s licensing agreement for tramadol hydrochloride for PE and also to terminate the ongoing Phase 3 studies. The Valeant model did not include compounds that had any regulatory or clinical risk (i.e., were still in development) and instead was focused solely on “commercially ready” products.

Biovail withdrew from its licensing agreement with DMI Biosciences and the worldwide rights to tramadol hydrochloride for PE reverted back to DMI Biosciences, which was acquired in March 2011 by Ampio. In December of 2011, the Ethypharm-Biovail NDA Agreement was transferred to Ampio in an asset purchase from Valeant, providing Ampio access to all data, regulatory filings and rights to develop, manufacture and market tramadol hydrochloride ODT for PE. Ampio completed clinical study reports for the European Phase 3 studies and submitted tramadol hydrochloride 89 mg ODT for marketing authorization in Australia.

In December 2013, Ampio spun out the assets and agreements associated with its sexual dysfunction treatment portfolio, including Zertane, to us, a wholly-owned subsidiary of Ampio at that time.

Clinical Data

Six European clinical trials have been completed with Zertane: two Phase 1 trials in healthy volunteers and two Phase 2 and two Phase 3 trials in men with lifelong PE. The two Phase 1 safety trials were conducted to characterize the concentration of tramadol hydrochloride in plasma after oral administration of a single Zertane ODT (89 mg) in healthy volunteers.

Two randomized, placebo-controlled, blinded Phase 2 clinical trials were conducted in a total of 102 patients. The first of these showed that a single 25-mg dose of conventionally formulated immediate release tramadol hydrochloride (i.e., immediate-release gelatin capsules) was safe, well-tolerated and prolonged time to ejaculation in some, but not all, patients. The second trial evaluated three higher doses of tramadol hydrochloride: 65 mg, 85 mg and 120 mg. In this trial, a clear dose response was seen for both efficacy and safety, leading DMI Biosciences to conclude that the optimal tramadol hydrochloride dose to treat PE was likely to be in the range 60-90 mg.

Two placebo-controlled, randomized and double-blind Phase 3 clinical trials were conducted in Europe to investigate tramadol hydrochloride 62 mg and 89 mg ODT for the treatment of PE when taken as needed between two and eight hours before a sexual event. A total of 677 patients were randomized in the trials and received either the 62 or 89 mg ODT or a matching placebo ODT. Our claim that Zertane was efficacious in the Phase 3 trials is

based on at least one of the two doses resulting in statistically significant improvements in both IELT and PEP measures (i.e., co-primary endpoints) from baseline to the end of the trial. Using IELT in combination with a self-report questionnaire (e.g., PEP or POPE) has gained acceptance as meaningful measures of pharmacoactivity and efficacy in the scientific and regulatory communities. The results of the Phase 3 trials suggest that tramadol hydrochloride 89 mg ODT is consistently more effective as a treatment for PE than tramadol hydrochloride 62 mg ODT. In accordance with the definitions from the clinical trial protocols, only the tramadol hydrochloride 89 mg ODT dose satisfied the claim for effective treatment of PE in both Phase 3 trials.

The following table summarizes the six prior clinical trials of Zertane.

Trial Name
(Dates/Sponsor)

Phase

Demographic
(Age)

Enrollment

Design

Duration of
Double-blind
Treatment

Zertane
Dose (mg)

Noteworthy Findings

BVF-324-101

(June 26, 2009

to July 5, 2009/

Biovail*)

Healthy male

and females (18-55 yr)

Comparative

bioavailability study

Overall systemic exposure of tramadol hydrochloride and 2 metabolites were similar following 89 mg ODT and the reference 89 mg tramadol hydrochloride solution.

13 subjects experienced a total of 37 adverse events (AEs) during the study. Most common AEs were GI disorders (nausea) and central nervous system disorders (sleepiness, dizziness, headache).

BVF-324-102

(July 14, 2009

to July 30,

2009/ Biovail*)

Healthy males

(19-55 yr)

Alcohol

interaction

study

There was no significant difference in the peak and total systemic exposures of tramadol hydrochloride compared to when tramadol hydrochloride 89 mg ODT was taken with water, or with either strength of alcohol.

Tramadol hydrochloride was well tolerated with alcohol. 7 subjects experienced 11 AEs, most frequently decreased blood pressure and dizziness.

KNL 40237

(March 13, 2003

to July 7,

2003/ DMI**)

Men with PE

(18-70 yr)

Double-blind,

randomized

placebo- controlled

3 weeks

Treatment with tramadol hydrochloride 25 mg had no statistically different effect than placebo in subjects with a baseline IELT of 2 minutes or less (n=30; P =0.4560) or in a subpopulation of subjects with a baseline IELT of 1 minute or less (n=19; P =0.1796).

46 AEs emerged during treatment (28 with tramadol hydrochloride and 18 with placebo). There were no deaths, serious or other significant AEs. All AEs were of mild intensity. Most common AEs were GI disorders (nausea) and central nervous system disorders (headache).

Trial Name
(Dates/Sponsor)

Phase

Demographic
(Age)

Enrollment

Design

Duration of
Double-blind
Treatment

Zertane
Dose (mg)

Noteworthy Findings

KNL 40491

(September 28, 2004 to October 18, 2005/ DMI**)

Men with PE

(18-70 yr)

Double-blind,

randomized

placebo- controlled

12 weeks

65, 85, 120

Tramadol hydrochloride significantly increased the median IELT compared to both Baseline and placebo. Statistically significant increases in IELT compared to Baseline were observed to be 3.0-fold ( P =0.0013), 4.2-fold ( P <0.0001), and 5.1-fold ( P <0.0001) for the 65-, 85-, and 120-mg dose levels, respectively.

Doses of 65 and 85 mg were generally well tolerated. 120 mg was less well tolerated with adverse events known to be associated with tramadol hydrochloride (headache, dizziness, somnolence, insomnia) and related to sexual function (penile hypoaesthesia, anorgasmia, and ED).

BVF-324-301

(August 17, 2009 to September 9, 2010/ Biovail*)

Men with PE (18-65 yr)

Double-blind, randomized placebo- controlled

12 weeks

62, 89

There was a statistically significant change in IELT from Baseline to the end of the study for tramadol hydrochloride ODT 89 mg compared to placebo (p = 0.002). The significant difference was apparent at the first visit during the double-blind treatment period and each visit thereafter (p < 0.05 for all Visits). Tramadol hydrochloride 62 mg and 89 mg ODT demonstrated statistically significant improvements in PEP measures compared with placebo.

During the double-blind treatment or open-label extension periods, 21 subjects experienced at least 1 treatment-emergent AE. There were no deaths or serious AEs during the study.

BVF-324-302

(September 30, 2009 to August 23, 2010/ Biovail*)

Men with PE (18-65 yr)

Double-blind, randomized placebo- controlled

12 weeks

62, 89

There was a statistically significant change in IELT from Baseline to the end of the study for tramadol hydrochloride ODT 62 and 89 mg compared to placebo (p = 0.01 and p = 0.02). Tramadol hydrochloride 62 mg and 89 mg ODT demonstrated statistically significant improvements in both IELT and PEP measures compared with placebo.

A total of 28 out of 399 subjects (7.5%) experienced at least 1 treatment-emergent AE during the double-blind or open-label treatment period. No subject died or experienced a severe AE.

Total

*	Biovail Laboratories International, SRL

**	DMI Biosciences, Inc.

Planned Phase 3 Clinical Program in United States

In light of the size of the U.S. market opportunity for Zertane, FDA approval is a critical value driver for us in the near term. We believe we are well positioned to quickly move into NDA-enabling Phase 3 clinical development in order to complete and submit our Section 505(b)(2) NDA for Zertane. Ampio met with the FDA in a pre-IND meeting on June 20, 2012 and we subsequently met with the FDA on October 23, 2014. As a result of these meetings, we have been able to define the number and key aspects of necessary trials to progress Zertane to an NDA that may be accepted for filing by the FDA. Furthermore, the results from the European trials will inform the design, endpoints and inclusion criteria for the U.S. Phase 3 program as well as recommendations by FDA:

•

Patients as those with a subset of disease symptoms described by the ISSM Ad Hoc Committee for the Definition of PE;

•

Two tramadol hydrochloride doses (62 and 89 mg) will be evaluated;

•

The patient reported outcome questionnaire, or PEP, from the European Phase 3 trials, was modified to capture the most clinically significant aspects of PE from the ISSM definition – now termed Patient Outcomes in Premature Ejaculation, or POPE – and this 4-question questionnaire will be validated during the first trial;

•

Key efficacy assessments will include intravaginal ejaculation latency time, or IELT and the subject’s frustration or bother due to PE; and

•

Total enrollment for each trial will be approximately 350 – 400 subjects.

As in the Phase 3 trials conducted in Europe, co-primary endpoints will be used for determination of efficacy. Both improvement in IELT, which will be captured by the partner in a blinded diary, and PE-related frustration or bother, which will be assessed after each sexual intercourse attempt as well as at the final study visit by a single question in the POPE, will be evaluated as co-primary endpoints to determine efficacy.

We currently expect to file the IND for Zertane in the first half of 2015. We are prepared to commence our Phase 3 clinical program soon after the IND becomes effective because our supplies are already manufactured and packaged and only require appropriate clinical labeling of the product candidate. Importantly, our manufacturing process has already been validated at the site of commercial manufacture.

ROW Opportunity

Beyond seeking U.S. NDA approval, we plan to leverage partnerships to gain approval and eventual marketing authorization for Zertane in several key markets around the world. We already have partnerships in place with Daewoong Pharmaceuticals Co., Ltd. in South Korea and FBM Industria Farmaceutica Ltda. in Brazil, thereby providing potential royalty and milestone-based revenue if, working with our partners, we are successfully able to obtain regulatory approval in those countries. In addition, our recent agreement with Paladin provides Paladin with exclusive rights to market, sell and distribute Zertane in Canada, the Republic of South Africa, certain countries in

Sub-Saharan Africa, Colombia and Latin America. Before marketing any products in Brazil and South Korea, approval must be received from the Brazilian Health Surveillance Agency (Anvisa) and the Ministry of Food and Drug Safety (MFDS, previously the Korean Food and Drug Administration), respectively. We intend to leverage the expertise of our local collaborators in these jurisdictions to navigate the regulatory requirements and help determine an efficient and effective pathway to bringing Zertane to market. If required regulatory approvals are obtained, partnerships in ROW markets will potentially provide additional revenue to us and help to establish the Zertane brand and the role of tramadol hydrochloride in PE around the world. Such clinical experience will be useful as we seek to impact treatment guidelines for PE and gather post-marketing data to better inform our U.S. NDA submission.

Zertane-ED

In light of the fact that approximately 32% of men with PE also suffer from ED, according to a 2007 study published in European Urology , we believe that a combination of tramadol hydrochloride with a PDE-5 inhibitor, if approved, would benefit men that experience both distinct problems. If, and when, the FDA accepts filing of our NDA for Zertane, we will commence developing the Zertane-ED fixed dose combination product candidate. Formulation development, stability studies and analytical work as well as manufacturing of clinical supplies in compliance with current good manufacturing practices, or cGMPs, have already been completed by a contract manufacturer, and our collaboration with Daewoong Pharmaceutical Co., Ltd., or Daewoong, in South Korea will provide development support to complement our U.S. development efforts. For additional information about our collaboration with Daewoong, see “Material Collaborations” below.

All analytical methods were developed and validated and five current cGMP clinical lots were made. The clinical lots have been released and have been on stability since October 2013 thereby enabling pharmacokinetic/pre-clinical work to be initiated.

Commercial Strategy

U.S. Commercial Strategy

Given the population and the anticipated pricing, the United States represents the largest PE opportunity and we will seek to maximize the market potential for Zertane in one or more of the following ways:

•

License U.S. promotional rights to Zertane to an established pharmaceutical company – We will seek to secure a milestone and royalty-based agreement with a company to market Zertane to high-value U.S. prescribers. Potential partners may already have a commercial presence in urology (the single largest prescriber population for PE drugs) as well as primary care physicians (the single largest category of physicians in the United States). Alternatively, we may attempt to secure agreements with multiple partners to promote Zertane to different specialties: e.g., one for urology and one for primary care physicians. We may also consider divesting Zertane as an alternative to a licensing agreement.

•

Commercialize Zertane via our own commercial infrastructure – Our management has experience with all aspects of commercialization and we may deploy a specialized sales force to initiate promotion of Zertane specifically to urologists. We may expand our commercial presence into primary care and other relevant physician specialties. Alternatively we may deploy a sales force of our own focused on urologists, while also seeking a partner for the larger primary care segment.

ROW Commercial Strategy

As stated previously, we intend to leverage partnerships to market Zertane around the world. We will seek to collaborate in the largest viable markets with companies that are well positioned to maximize sales of Zertane. Considerations for collaborations will include the prospective collaborator’s presence in the therapeutic category of men’s health, its ability to invest in the regulatory and commercialization activities necessary, and its commitment to Zertane, our management team and economic terms. Countries will be prioritized for partnering based on viability of Zertane in the market, including but not limited to regulatory pathway (i.e., the amount of regulatory work required for the partner to submit for approval); market conditions (markets that accept sexual health products); economic factors (pricing); and market size, as well as deal teams, including but not limited to royalty and/or milestone based economic terms; upfront payments based on market; and commitment to marketing and/or regulatory investments.

We already have entered into collaboration agreements in South Korea and Brazil, which represent two of the larger ROW market opportunities. In addition, our recent agreement with Paladin provides Paladin with exclusive rights to market, sell and distribute Zertane in Canada, the Republic of South Africa, certain countries in Sub-Saharan Africa, Colombia and Latin America. We will seek to enter into similar arrangements in additional countries with additional companies in order to capitalize on the sizable opportunity for Zertane, and later, Zertane-ED.

Our Lead Diagnostic Product Candidate – The RedoxSYS system

Our leading diagnostic product candidate, the RedoxSYS system, is now fully developed for research use. RedoxSYS is a novel, portable device that measures oxidation-reduction potential, or ORP, a global measure of oxidative stress. This system is the first and only system that measures ORP in biologic specimens to provide a complete measure of redox balance, which is broadly implicated across a wide range of both acute and chronic conditions. To date, Canadian and European regulators have characterized RedoxSYS system as Class II medical device and regulated them accordingly. Classification of a medical device as Class II in Europe and Canada indicates that the device is generally regarded as posing medium risk, and non-invasive medical devices that come into contact with injured skin are generally classified as Class II. As we have conducted initial validation studies with the RedoxSYS system across a range of conditions and obtained a CE marking in Europe and Health Canada clearance to begin the market development of the RedoxSYS system as a clinical diagnostic in Europe, Canada, and elsewhere around the world where CE marking is recognized, we are now initiating commercialization for use of the RedoxSYS system as a research tool. By employing a focused commercial infrastructure and a growing network of distributors around the world, we believe we can efficiently penetrate the academic and industry-based research centers who study oxidative stress. With this growth in the research market, we intend to develop clinical applications for the RedoxSYS system. An early potential opportunity that has presented promise through our research is the application of ORP in the study of male infertility. ORP represents a unique approach to assessing oxidative stress in male infertility, and early proof-of-concept studies have been conducted. We are now beginning clinical studies with a globally recognized U.S.-based university in male infertility. Oxidative stress is widely assessed in male infertility laboratories, and we believe the RedoxSYS system, if proven effective, will provide a simple, comprehensive solution to oxidative stress detection and management of antioxidant and lifestyle intervention in this underserved market.

Our strategy for the RedoxSYS system is to continue deployment of this system at leading academic centers around the world, develop research collaborations with key opinion leaders in oxidative stress research, identify clinical applications for the platform, and aggressively pursue infertility studies to establish efficacy of the system in this setting of care. Our plans include introduction of the RedoxSYS system to researchers in the United States through a direct commercial effort while engaging with distributors in major markets around the world, including Canada, Europe, and Asia (with a focus on Japan, Korea, Taiwan, Singapore, and Malaysia).

Oxidative Stress and the Male Infertility Market Opportunity

Oxidative stress plays a pivotal role in the pathogenesis of male infertility. The presence of excess levels of reactive oxygen species, or ROS, is associated with both the structural and functional integrity of sperm. Moreover, these increased levels of ROS – the increase of oxidative stress – directly interfere with capacitation and fertilization. It is widely estimated that total infertility is driven by male infertility in half of the cases, and the major factors influencing the rise in infertility among men are the change in lifestyle, increasing age, and environmental effects.

Prevalence of Male Infertility

Of all sexually active adults, 12-15% are infertile and male infertility is the sole cause or contributing factor 50% of the time. The male infertility market is large and growing. The market is expected to grow to more than $300 million globally by 2020, with a CAGR of nearly 5% from 2013 to 2020. Despite the prevalence of male infertility, difficulties remain in effectively diagnosis root causes. Oxidative stress assessment is considered a standard practice but due to various factors is not effectively used routinely.

Potential Role of ORP in Male Infertility

Oxidation-reduction potential is defined in the published literature as follows:

“ORP in a biological system is an integrated measure of the balance between total oxidants and reductants. In plasma, many constituents contribute to the ORP. Reactive oxygen species (ROS), such as the superoxide ion, hydroxyl radical, hydrogen peroxide, nitric oxide, peroxynitrite, transition metal ions, and hypochlorous acid, contribute to the oxidative potential. Plasma reductants include thiols, vitamin C, tocopherol, ß-carotene, lycopene, uric acid, bilirubin, and flavinoids. Enzymes such as SOD, catalase, and glutathione peroxidase, are involved in the conversion of ROS into less reactive species. ORP monitoring of plasma represents a single measurement that integrates the overall quantitative balance among the oxidants and reductants of the system.”

Given that ORP represents a single, global measure of oxidative stress in a biological system, we believe the potential for ORP to serve as a standardized marker in semen analysis and other aspects of infertility assessment is significant. A major limitation of oxidative stress assays relates to the fact that there is poor standardization in testing. As many factors contribute to oxidative stress (e.g., free radical proliferation, antioxidant depletion, DNA damage, etc.), it is important to have an integrated measure that combines all known and unknown oxidants and reductants in the respective system into one measurement. We believe ORP is an integrated measure of oxidative stress that can be easily and quickly measured with the RedoxSYS system.

LOGO

In the context of infertility, having an integrated value representing all relevant biologic constituents contributing to oxidative stress will enable simple, robust analysis in a four-minute test.

Existing infertility assessment tools do not satisfy the clinical need

There are various techniques in use to assess semen in cases of male infertility. The most commonly implemented techniques involve DNA fragmentation, oxidative stress analysis, microscopic examination, sperm penetration assays, sperm agglutination, computer assisted semen analysis, and others. The currently available oxidative stress analysis tools are widely considered expensive and cumbersome to use in routine clinical practice. In both developed countries as well as in the developing world, expensive analysis tools and recurring reagent expenses make routine testing nearly impossible to implement with regularity.

Market Opportunity for RedoxSYS system

We believe the market opportunity for the RedoxSYS system is significant as scientists implicate oxidative stress in numerous diseases and acute conditions. Our initial focus of commercializing the RedoxSYS system for use in research enables us to rapidly build a base of clinical validation and utility data across a range of illnesses. As such,

we expect to generate early revenues from oxidative stress researchers implementing the RedoxSYS system into their routine oxidative stress research programs while generating published clinical data demonstrating ORP’s usefulness in disease monitoring and prognostic assessment. From a clinical perspective, we plan to continue our research efforts in male infertility while expanding future applications in acute and chronic illnesses.

The male infertility market is in excess of $300 million, while the broader in vitro diagnostics market is expected to grow to more than $80 billion by 2017. With a substantial base of conditions for which the RedoxSYS system may present utility, we expect to realize significant revenue potential from this first-in-class system.

Through our collaborative research efforts our scientific team has identified several diagnoses in which we believe the ORP technology derives distinct values that may be useful in better identifying a patient’s risk for the development of more severe illness – beyond reproductive health and infertility. Further, we believe the ORP technology has the potential to better stratify patients according to clinical characteristics detected uniquely by ORP measurements. Specific diseases where the RedoxSYS system have been initially studied include trauma, critical illness, stroke, heart failure, diabetes, and pregnancy. Multiple other clinical areas exist where the system could be studied and potentially applied.

Diagnostics serve a key role in the health value chain by influencing the quality of patient care, health outcomes and downstream resource requirements across a wide range of clinical conditions. From consumer-friendly at-home pregnancy and glucose monitoring tests to more complex automated laboratory-based systems, these tests are often first-line health decision tools. While diagnostics comprise less than 5% of hospital costs and about 1.6% of all Medicare costs, their findings are commonly believed to influence as much as 60-70% of health care decision-making. The value of diagnostics accrues not only to clinicians and patients, but to health care managers, third-party payors and quality assurance organizations that use diagnostic performance to measure and improve health care quality.

ORP is a tightly controlled measurement, much like the vital signs routinely measured in medical practice—temperature, heart rate, respiratory rate, blood pressure and oxygen saturation of blood. Abnormal changes in oxidation-reduction potential are closely associated with poor outcomes in critically ill patients, including traumatic brain injury, multi-trauma injury, stroke, sepsis, and pneumonia. Rapid results are essential for optimal treatment adjustments in critical care areas such as emergency and intensive care departments.

ORP results may also help determine which patients are at high risk of early readmission at hospital discharge, especially patients with heart attack, heart failure, stroke, and pneumonia, and this represents an incremental assessment not afforded by currently available diagnostic tests.

Numerous scientific studies confirm the clinical value of measuring oxidative stress. Recently, a large assortment of blood and cell tests have been used in research studies to measure separate biomarkers of oxidative stress, such as lipid peroxidation, protein oxidation and total antioxidants, but currently many of these separate biomarker test results are needed to start to assess total oxidative stress. Despite the importance of assessing oxidative stress, we are not aware of any practical or efficient method for measuring these oxidative stress biomarkers in a point-of-care setting. Oxidative stress is often a marker for inflammation, which in turn indicates the presence of disease-related processes or developing conditions across a wide array of diseases.

The worldwide IVD market was $44 billion in 2010 and is projected to grow to $82 billion by 2017. The IVD market includes all laboratory and hospital-based sales and home-use, or OTC, product sales covering immunoassays, clinical chemistry, microbiology, hematology, histology/cytology, point-of-care testing, and over-the-counter diagnostics. The professional point-of-care testing worldwide market is a significant opportunity and was in excess of $5 billion in 2009 and is expected to grow to almost $7 billion by 2014.

Importantly, critical care (an application for which the RedoxSYS system is targeted) constituted 14% ($700 million) of sales in 2009 with expected CAGR of 5%, and cardiac markers constituted 9% ($435 million) of sales in 2009 with expected CAGR of 8%.

Background on the RedoxSYS system

We believe the RedoxSYS system is the first and only research and clinical diagnostic platform that provides an accurate, easy, and complete real-time assessment of redox status. Through the development and commercialization of the RedoxSYS system, we are pioneering the true measurement of redox potential, also called oxidation-reduction potential, a novel measure of oxidative stress, which has been implicated in numerous critical injuries, illnesses, and chronic conditions with significant appreciation of the role of oxidative stress in infertility. We believe the RedoxSYS platform has a broad range of potential in both research and clinical settings where no other methods exist to measure oxidation-reduction potential in biologic specimens.

Through research directed by Dr. David Bar-Or and Raphael Bar-Or at Ampio, we believe we have developed the first and only clinical diagnostic device that measures ORP in biologic specimens (i.e., plasma, serum, semen, seminal plasma, cells, tissues, cell cultures, and others). This device, called the RedoxSYS system, rapidly measures ORP and antioxidant capacity, a global marker of antioxidant reserve and concentration to provide a global picture of oxidative status. The system uses a small, bench top analyzer in conjunction with small, disposable sensors that work electrochemically without any liquid reagents or difficult sample preparation. The RedoxSYS system has been CE marked and approved for use in Europe and Canada, and we are now collaborating with major medical centers around the world. The RedoxSYS system is an easy-to-use diagnostic device that can be used in various research settings. Further, this portable device can be decentralized to multiple research sites and enable real-time reporting of oxidative stress values at the patient’s point of care or in a clinical laboratory setting. We received ISO 13485:2003 medical device certification in 2014.

The RedoxSYS system has been developed over an 18-year period by Dr. David Bar-Or, Raphael Bar-Or, and their colleagues, and the research and development work has focused on both the technical and clinical development of various applications.

The RedoxSYS system Overview

The RedoxSYS system is comprised of two distinct, patented components that enable a system capable of measuring the ORP and antioxidant capacity of a biological fluid: an analyzer and sensor strips. In mechanical terms, ORP is defined as the potential between a working electrode and a reference electrode at equilibrium. The RedoxSYS system has been specifically studied in human whole blood, serum, plasma, semen, and other biological fluids. The RedoxSYS system measures two distinct elements to determine a patient’s oxidation reduction potential:

•

Static ORP – the standard potential between a working electrode and a reference electrode with no driving current (or extremely small current). This is proportional to the balance of redox agents and is what is classically defined as ORP. Low ORP values mean that the biological sample is in the normal range of oxidative stress. Higher than normal ORP values means that the biological sample is in a higher oxidation state.

•

Capacity – the measure of antioxidant reserve available in the body’s system. High capacity values mean that the biological sample has levels of antioxidant reserves. Lower than normal capacity values means that the biological sample has below normal antioxidant reserves.

The RedoxSYS Analyzer

The RedoxSYS analyzer is a portable, lightweight desktop platform that may be used in a clinical or research laboratory or near a patient care area. The analyzer is a small device that accepts an inserted sensor that has collected a small specimen as obtained by traditional specimen collection procedures. The analyzer is battery powered and equipped with a custom 5 lead strip connector. The reader consists of a Galvanostat analog circuit with > 1012 M W input impedance.

The analyzer contains a 10 MHz external crystal (internal 4X PLL for 40 MHz operation), and a programming/serial header is externally accessible. The device has internal power/heart-beat indicator LED, primary storage of 128Mbit (16Mbyte) SPI Flash (3.3V) (Bulk data storage), and secondary storage of 2Mbit (256Kbyte) SPI FRAM (3.3V) (Hi-Speed Storage).

The RedoxSYS analyzer contains a user-friendly interface that is flexibly designed to accommodate multiple endpoints depending upon the specific clinical condition being considered. The interface is LCD, 16x2, with a white backlight, variable delay auto-off time-out. Two status LED indicators are visible through front panel mounted lenses. Further, the reader contains three DPDT push-button switches (Left, Center, Right), power on button(s) for battery mode operation, switch usage switch, audible alerts, strip detection, and test completion signals.

Further, the RedoxSYS analyzer enables data transfer, has USB serial communication, and is configured for data download to a connected PC.

The RedoxSYS analyzer’s power management consists of an external 5VDC power jack with input capacitance and filtering, a boost converter supplied by external 5VDC power or internal Li-Ion battery, and provides main 5VDC digital board supply. The reader functions with or without the battery connected. The battery lasts in excess of 24 hours with continuous operation to enable prolonged use outside of a laboratory setting.

Image of the RedoxSYS Analyzer

LOGO

The RedoxSYS Sensor Strips

The ORP sensor strips, via standard biological specimen collection techniques, receive 20-40 microliters of a specimen from which the ORP clinical analysis is performed. The ORP sensor strips are small, disposable, and biocompatible and consist of a ceramic substrate and a five-lead configuration. Significant intellectual property surrounds the design, construct, and electrochemical algorithms associated with the sensors.

Image of the Sensor Strips

LOGO

Clinical Studies

Clinical Studies for Male Infertility

We have begun clinical studies in male infertility with a prominent, U.S.-based university medical center utilizing the RedoxSYS system. If successful, we anticipate we will demonstrate RedoxSYS system’s ability to measure oxidative stress in semen samples as an adjunctive measure of infertility. These studies are summarized below:


Aim	Hypothesis	Methods and Procedures	Expected outcome
1	The RedoxSYS system will be able to detect oxidation-reduction potential (ORP) in fresh seminal ejaculates	1. Standardize the instrument for inter/intra observer and assay variability 2. Standardize the system for fresh ejaculate and seminal plasma measurements 3. Test the ability of the system to measure the effect of exogenous ROS in semen 4. Establish the effect of time on ORP measurements	The assumption that RedoxSYS system can measure ORP in semen shall be confirmed

2	ORP values can be detected in fresh and frozen semen samples	1. Compare the effect of rapid freezing on the ORP of the seminal ejaculate and seminal plasma 2. The effect of exogenous ROS addition to the ORP and capacitance of both ejaculate and seminal plasma after rapid freezing 3. Establish the effect of different subzero storage temperatures and storage time on ORP measurement in frozen seminal ejaculate and seminal plasma samples 4. Comparing the effect of storage time after rapid freezing on the ORP of both the seminal ejaculate and seminal plasma	It shall be confirmed that ORP can be measured in both fresh and frozen semen samples and that n differences will exist

3	Establish ORP values in ejaculates of healthy men.	1. Establish ORP values in seminal ejaculates and of healthy men with normal semen parameters i.e normal concentration, motility and morphology according to WHO, 2010 2. Establish the effect of varying sperm concentration 0, 10, 20, 40 and 100 X 10 ⁶ / mL on ORP levels (concentration response).	ORP values in ejaculates of healthy men will be established

Results from these clinical studies could validate that the RedoxSYS system can be used for detection of ORP in human ejaculates and seminal plasma without requiring large sample volumes. Furthermore, it can show that the results obtained are comparable to the current parameters measured. This will validate the use of the RedoxSYS system in the clinical andrology setting as a tool to provide real time information on oxidative status. If successful, these studies will provide substantial clinical validation for use of the RedoxSYS system in male infertility and enable a specific clinical application in the field of andrology and male infertility.

Clinical Study for Other Indications

Beyond male infertility, we have generated robust clinical data with ORP. As much of our initial research efforts focused on trauma, research beginning in 2014 has expanded into research and clinical applications in the areas of:

•

Stroke

•

Sepsis

•

Ventilator-Associated Pneumonia

•

Athletic exertion

•

Hemodialysis

•

Post cardiac surgery

•

Congestive heart failure

•

Hip Fracture

•

Frailty

•

Diabetic Kidney Disease

•

Pulmonary Arterial Hypertension

Additionally, we have conducted numerous pre-clinical studies looking at various neurodegenerative conditions including Parkinson’s disease and multiple sclerosis. We have active research in place with over 20 key opinion leaders around the world with over 80 studies in various stages or planning or execution.

U.S. Research & Development

In 2013 and 2014, we deployed the RedoxSYS system around the world in the development of numerous future clinical applications. While many areas of study have been undertaken, we have focused research resources on high-value areas where significant medical needs remain unmet. Given our initial orientation around trauma, the studies completed thus far have focused on large conditions related to critical care. These initial studies demonstrated the initial clinical validation for the RedoxSYS system and represent substantial opportunities as growth applications and markets following initial entry into the research and infertility markets.

LOGO

We have initiated over 80 studies across a range of study types, ranging from studies in trauma, liver disease, diabetes, cardiac conditions, wellness/exercise, and fertility. From this research has presented unique opportunities to deploy RedoxSYS system to users in multiple markets around the world in various conditions. With a CE marking now in place and research instruments now manufactured and ready for use, we are positioned to begin commercializing the RedoxSYS system.

LOGO

Select Published Clinical Trials with Oxidation-Reduction Potential

Significant research has been performed on the ORP diagnostic platform, and numerous peer-reviewed publications demonstrate the various considerations made in the development of this application in a clinical setting. Further, the research conducted to date demonstrates the clinical relevance of ORP as a diagnostic marker in trauma, the development of TRALI via blood transfusions, and other conditions. Over the past 20 years, Ampio employees, Dr. Bar-Or, Raphael Bar-Or, Leonard Rael, and their colleagues, have employed the resources of two Level 1 trauma centers in the state of Colorado. Specific, select studies reporting on the clinical role of ORP as it relates to trauma, acute lung injury related to blood transfusions, and traumatic brain injury include:


Study Summary	Phase	N	Demographic	Outcome/Findings

Oxidation-Reduction Potential in Trauma Patients	Clinical Proof of Concept	Healthy = 39 Trauma = 10	Trauma patients admitted to a Level 1 trauma center	Plasma ORP in multi-trauma patients increased during the first few days of hospitalization and approached normal ORP levels upon discharge


Effect of Storage on Oxidative Biomarkers on Packed Red Blood Cells	Clinical Proof of Concept	10 patient specimens	Critically ill patients with a risk of developing transfusion-related acute lung injury	Oxidation-reduction potential significantly increased (p < 0.05) in the day 42 sample versus the day 1 sample. The oxidation of human serum albumin increased by 63.6% during the storage time.

Plasma Oxidation-Reduction Potential and Protein Oxidation in Traumatic Brain Injury	Clinical Proof of Concept	Non-head injury trauma patients = 26 Moderate ITBI patients = 18 Healthy patients = 22	Isolated traumatic brain injury	Admission plasma ORP was significantly elevated in all traumatized patients compared to controls. Maximum ORP was detected on day 6 for severe ITBI and non-head injury traumatized patients. Maximum ORP values were significantly higher p<0.05) in the severe ITBI group compared to the non-head injury group

Oxidation-reduction potential in trauma patients	Clinical Proof of Concept	Trauma patients = 39 Healthy patients = 10	Critically injured patients	The presence of an oxidative environment in the plasma of the critically injured as measured by ORP. ORP can differentiate the degree of oxidative stress based on the severity of the trauma and degree of inflammation

Regulatory Pathway

We achieved ISO 13485: 2003 in early 2014 following the successful development of a compliant medical device quality system. Following the issuance of our ISO certification, we were awarded a CE marking for the RedoxSYS system, which has enabled initial market development in Europe and markets that accept a CE marking. We also received Health Canada clearance, and we are now working with multiple centers in Canada in research projects. In the United States, we intend to pursue 510k de novo clearance with the FDA. We have had initial discussions with FDA and have confirmed RedoxSYS system’s eligibility for the 510k de novo pathway in early 2016.

Commercial Strategy

U.S. Commercial Strategy

If the clinical studies to measure oxidative stress in male infertility are successful, we expect to pursue that intended use for the RedoxSYS system via the FDA 510K de novo pathway. If cleared for the intended use we intend to seek to commercialize RedoxSYS system as a new tool for the assessment of oxidative stress in infertility in men. We envision pursuing a direct sales efforts to high priority infertility clinics and reference centers across the United States. We have identified the primary, influential centers in the United States and believe our commercial

deployment will be efficient through a focused sales and marketing effort. We intent to seek to sell the RedoxSYS system into individual centers and laboratories but will focus our revenue model on the repeat ordering of the disposable, single use RedoxSYS sensor strips. We expect to realize a substantial gross margin and profit margin on the basis of low cost of goods sold on both components of the system. We envision an average selling price for the disposable sensors of approximately $40. We envision selling the RedoxSYS analyzers for $5,500.

Further, we will leverage our urology commercialization efforts with other products with a focus on urology centers, infertility clinics, and reproductive health laboratories around the United States.

We believe a focused sales force (initially) will enable effective representation of our products and penetration of the reproductive health market. Our sales efforts into the research markets will be enabled initially through a full-time business development professional who will focus on collaborative research and research sales to major oxidative stress centers in the United States. We expect identical pricing in the research market as we will pursue in the clinical diagnostics markets.

ROW Commercial Strategy

We intent to undertake a similar strategy outside the United States for the RedoxSYS system while complementing our efforts in infertility and research with adjunct applications in critical care conditions. To efficiently execute across our strategy, we intent to utilize a network of established distributors in the target markets in Europe and Asia. We have already engaged with distributors in three European countries and one Asian country, while many other potential distributors are in advanced stages of discussions with us. We anticipate slightly reduced pricing outside the United States for the disposable sensors (~$32 vs. $40) given the anticipated lower pricing observed ex-US for diagnostic and research products.

Future Products

We plan to augment our core development and commercial assets through efficient identification of complementary therapeutics, devices, and diagnostics related to urological disorders. We intend to seek assets that are near commercial stage or already generating revenues. Further, we intend to seek to acquire products through asset purchases, licensing, co-development, or collaborative commercial arrangements (co-promotions, co-marketing, etc.).

Our management team has extensive experience across a wide range of business development activities and have in-licensed or acquired products from large, mid-sized, and small enterprises in the United States and abroad. Through an assertive product and business development approach, we expect that we will rapidly advance our internal products as well as externally sourced assets.

Material Collaborations

Collaboration with Ampio

We have entered into various collaboration agreements and arrangements with Ampio.

Promissory Note and Debt Cancellations

On April 16, 2015, Ampio purchased 57,970,000 shares of common stock of the Combined Company for (i) issuance to the Combined Company of a promissory note of Ampio in the principal amount of $10,000,000, maturing on the first anniversary of the Merger, (ii) cancellation of indebtness of Luoxis to Ampio in the amount of $8,000,000, and (iii) cancellation of indebtedness of Vyrix to Ampio in the amount of $4,000,000. Unpaid principal amounts under the promissory note bear simple interest equal to the greater of (i) 0.4% and (ii) any other minimum rate of interest required by applicable rules and regulations of the Internal Revenue Service. The promissory note is repayable, in whole or in part, at any time and from time to time, without penalty. In connection with the closing of the Merger, the loan agreements entered into by Ampio and Vyrix and Luoxis, respectively, were terminated. See “Related Party Transactions” for further discussion regarding the loan agreements.

Assignment and Assumption Agreement

In December 2013, Vyrix entered into an assignment and assumption agreement with Ampio. Pursuant to the assignment and assumption agreement, Ampio assigned to Vyrix all its rights under a certain manufacturing and supply agreement, license agreement, distribution agreement, services agreement and other agreements related to Vyrix’ product candidates. Such agreements were assigned to the Combined Company upon the closing of the Merger.

Transfer of Intellectual Property

In January 2013, Ampio transferred to Luoxis certain intellectual property, including registered and unregistered patents, related to the Luoxis ORP technology. In December 2013, Ampio transferred to Vyrix certain intellectual property, including registered and unregistered patents, related to Vyrix product candidates. Such intellectual property was transferred to the Combined Company upon the closing of the Merger.

Services Agreements

In January 2013, Luoxis entered into a services agreement with Ampio whereby Ampio provides corporate overhead services and a shared facility with Luoxis in exchange for $15,000 per month. The amount can be modified in writing upon the consent of both parties. The agreement may be terminated at any time by either party. In January 2014, Vyrix entered into a services agreement with Ampio whereby Ampio provides corporate overhead services to Vyrix in exchange for $7,000 per month. The amount can be modified in writing upon the consent of both parties. The agreement may be terminated at any time by either party. Both agreements were assigned to the Combined Company upon the closing of the Merger.

Collaboration with TRLLC

In June 2013, Luoxis entered into a sponsored research agreement with TRLLC, an entity controlled by Ampio’s director and Chief Scientific Officer, Dr. Bar-Or. The agreement, amended in September 2013 and provides for Luoxis to pay $6,000 per month to TRLLC in consideration for services related to research and development of Luoxis’ RedoxSYS system. In March 2014, Luoxis also agreed to pay a sum of $615,000 which is being amortized over the contractual term of 60.5 months and is divided between current and long-term on the balance sheet; this amount has been paid in full. This agreement is set to expire March 2019 and cannot be terminated prior to March 2017.

Collaboration with Valeant Pharmaceuticals

On December 2, 2011, Ampio entered into an asset purchase agreement with Valeant International (Barbados) SRL (formerly BioVail Laboratories International SRL), or Valeant. Under the agreement, which was assigned to us, Valeant sold and transferred all of Valeant’s rights, title and interest in and to a license agreement covering patented technology, specified data, information, manufacturing rights and know-how relating to an ODT formulation for Zertane, including samples of the Zertane product candidate, in exchange for cash of $2,000,000 and 3% of the aggregate annual net sales of Zertane. This product license is a major component for documenting the manufacturing process for regulatory approval and accelerating the timeline for commercialization of Zertane. The agreement may no longer be terminated by either party other than by mutual agreement to terminate and our royalty obligations under the agreement continue indefinitely.

Collaboration with Ethypharm

On September 10, 2012, Ampio entered into a manufacturing and supply agreement with Ethypharm S.A., a society anonyme organized under the laws of France, or Ethypharm, pursuant to which Ampio agreed to purchase all of its requirements of Zertane ODT exclusively from Ethypharm during the term of the agreement. The agreement, which

was assigned to us, sets out fixed bulk pricing for the Zertane ODT product manufactured and supplied by Ethypharm. The term is a period of ten years from the effective date, automatically renewing for three-year periods unless terminated. The agreement may also be terminated in the event of a material breach by either party, upon a bankruptcy or in the event that regulatory approval is withdrawn once obtained.

Collaboration with Daewoong Pharmaceuticals Company

On September 8, 2011, Ampio entered into a license, development and commercialization agreement, effective as of August 23, 2011, with Daewoong Pharmaceuticals Co., Ltd., or Daewoong, a major Korean pharmaceutical company. The agreement, which was assigned to us, grants Daewoong exclusive rights to develop, market and sell Zertane in South Korea for the treatment of PE and Zertane-ED for the treatment of PE and ED. Upon signing of the agreement, Daewoong paid Ampio 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. Daewoong agreed to make milestone payments totaling up to $3,200,000 contingent upon achievement of regulatory approvals and cumulative net sales targets, which may take several years. In addition, we will earn a royalty based on 25% of net sales, as defined in the agreement, if the royalty exceeds the transfer price of the Zertane product. The agreement has a term of ten years from the date of the first commercial sale of the first product in South Korea, which will renew automatically renewal for successive two-year periods, subject to the right of either party to terminate upon 90 days written notice prior to the commencement of any renewal term.

Collaboration with FBM Farmaceutica

On March 1, 2012, Ampio entered into a distribution agreement with FBM Industria Farmaceutica, Ltda., or FBM. The agreement, which was assigned to us, provides FBM with exclusive rights to market, distribute and sell Zertane in Brazil for the treatment of PE and sets a fixed transfer price per tablet FBM will pay for supplying the product. FBM is responsible for obtaining and maintaining required product registration in Brazil. For the first three years following the first commercial sale of Zertane in Brazil, FBM has a minimum marketing expenditure commitment. The agreement has a term of twenty years from the date of the first commercial delivery of Zertane to FBM and may be terminated by us on 120 days’ notice, subject to early termination payments.

Collaboration with Paladin

On April 9, 2014, we entered into a distribution and license agreement with Endo Ventures Limited, which recently acquired Paladin Labs Inc., or Paladin, a leading Canadian specialty pharmaceutical company. The agreement grants Paladin exclusive rights to market and sell Zertane in Canada, the Republic of South Africa, Colombia and certain countries in Sub Saharan Africa and Latin America. Pursuant to the agreement, Paladin has the right of first negotiation to include Zertane-ED as an additional product under the agreement. Upon signing of the agreement, Paladin made an upfront payment to us in the amount of $250,000. The agreement sets a fixed transfer price that Paladin will pay per tablet and provides for milestone payments by Paladin to us upon the achievement of certain regulatory approvals and net sales targets, up to $3,025,000 in the aggregate, and for royalty payments by Paladin to us based on net sales. The agreement has an initial term that expires on a country-by-country basis on the later of (i) the expiration of market exclusivity for the product in that country or (ii) 15 years after the first commercial sale of the product in that country, and automatically renews for successive three-year terms, unless we deliver notice of termination at least six months prior to the end of the then-current term. Either party may terminate the agreement in the event of a material breach, subject to a cure period, or upon a bankruptcy or dissolution and may remove a country from the covered territory if regulatory approval is not obtained in that country. After the fourth anniversary of the agreement, we may terminate for convenience on 60 days’ notice, subject to early termination payments.

Intellectual Property

The current Vyrix patent portfolio consists of 77 issued patents and 15 pending applications worldwide. The portfolio primarily consists of three families filed in the United States and throughout the world. The first family includes 30 issued patents for the use of tramadol to treat premature ejaculation. The standard 20-year expiration for patents in this family is in 2022. The other two families are for the use of a combination of tramadol and a phosphodiesterase inhibitor to treat comorbid premature ejaculation and erectile dysfunction and to treat sexual

dysfunction side effects associated with administration of tramadol. These two families include issued patents in Europe, Australia, Canada, China, Mexico, New Zealand, Japan, the Philippines and South Africa and pending applications in the United States, Brazil, China, India, Japan, Korea, and the Philippines. The standard 20-year expiration for patents in these families is in 2028.

The current Luoxis patent portfolio consists of 27 issued patents and 50 pending applications worldwide. The portfolio primarily consists of four families filed in the United States and throughout the world. The first family includes three issued patents and six pending applications with claims directed to the measurement of the ORP of a patient sample to evaluate various conditions. The standard 20-year expiration for patents in this family is in 2028. The second family includes two pending United States applications, pending applications in Canada, Singapore, South Africa and Australia and a PCT international application with claims directed to the measurement of the ORP capacity of a patient sample to evaluate various conditions. The standard 20-year expiration for patents in this family is in 2033. The third family includes five issued patents and 18 pending applications with claims directed to devices and methods for the measurement of ORP and ORP capacity. The standard 20-year expiration for patents in this family is in 2032. The fourth family includes one pending United States application and 16 pending applications worldwide with claims directed to multiple layer gel test strip measurement devices and methods of making for use in measuring ORP and ORP capacity. The standard 20-year expiration for patents in this family is in 2033.

We also maintain trade secrets and proprietary know-how that we seek to protect through confidentiality and nondisclosure agreements. These agreements may not provide meaningful protection or adequate remedies in the event of unauthorized use or disclosure of confidential and proprietary information. If we do not adequately protect our trade secrets and proprietary know-how, our competitive position and business prospects could be materially harmed.

We expect to seek United States and foreign patent protection for drug and diagnostic products we discover, as well as therapeutic and diagnostic products and processes. We expect also to seek patent protection or rely upon trade secret rights to protect certain other technologies which may be used to discover and characterize drugs and diagnostic products and processes, and which may be used to develop novel therapeutic and diagnostic products and processes.

The patent positions of companies such as ours involve complex legal and factual questions and, therefore, their enforceability cannot be predicted with any certainty. Our issued and licensed patents, and those that may be issued to us in the future, may be challenged, invalidated or circumvented, and the rights granted under the patents or licenses may not provide us with meaningful protection or competitive advantages. Our competitors may independently develop similar technologies or duplicate any technology developed by us, which could offset any advantages we might otherwise realize from our intellectual property. Furthermore, even if our product candidates receive regulatory approval, the time required for development, testing, and regulatory review could mean that protection afforded us by our patents may only remain in effect for a short period after commercialization. The expiration of patents or license rights we hold could adversely affect our ability to successfully commercialize our pharmaceutical drugs or diagnostics, thus harming our operating results and financial position.

We will be able to protect our proprietary intellectual property rights from unauthorized use by third parties primarily to the extent that such rights are covered by valid and enforceable patents or are effectively maintained as trade secrets. If we must litigate to protect our intellectual property from infringement, we may incur substantial costs and our officers may be forced to devote significant time to litigation-related matters. The laws of certain foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States.

Our pending patent applications, or those we may file or license from third parties in the future, may not result in patents being issued. Until a patent is issued, the claims covered by an application for patent may be narrowed or removed entirely, thus depriving us of adequate protection. As a result, we may face unanticipated competition, or conclude that without patent rights the risk of bringing product candidates to market exceeds the returns we are likely to obtain. We are generally aware of the scientific research being conducted in the areas in which we focus our research and development efforts, but patent applications filed by others are maintained in secrecy for at least 18 months and, in some cases in the United States, until the patent is issued. The publication of discoveries in scientific literature often occurs substantially later than the date on which the underlying discoveries were made. As a result, it is possible that patent applications for products similar to our drug or diagnostic candidates may have already been filed by others without our knowledge.

The biotechnology and pharmaceutical industries are characterized by extensive litigation regarding patents and other intellectual property rights, and it is possible that our development of product candidates could be challenged by other pharmaceutical or biotechnology companies. If we become involved in litigation concerning the enforceability, scope and validity of the proprietary rights of others, we may incur significant litigation or licensing expenses, be prevented from further developing or commercializing a product candidate, be required to seek licenses that may not be available from third parties on commercially acceptable terms, if at all, or subject us to compensatory or punitive damage awards. Any of these consequences could materially harm our business.

Competition

The healthcare industry is highly competitive and subject to significant and rapid technological change as researchers learn more about diseases and develop new technologies and treatments. Significant competitive factors in our industry include product efficacy and safety; quality and breadth of an organization’s technology; skill of an organization’s employees and its ability to recruit and retain key employees; timing and scope of regulatory approvals; government reimbursement rates for, and the average selling price of, products; the availability of raw materials and qualified manufacturing capacity; manufacturing costs; intellectual property and patent rights and their protection; and sales and marketing capabilities.

We cannot assure you that any of our products that we successfully develop will be clinically superior or scientifically preferable to products developed or introduced by our competitors.

PE has traditionally been treated by behavioral or psychosexual therapy, antidepressant drugs, such as SSRIs, or topical desensitizing agents, all of which have significant drawbacks. Behavioral and psychosexual therapy as a treatment for PE requires an understanding partner and can be frustrating, embarrassing, time consuming and expensive, among other things. Antidepressant drugs are sometimes prescribed “off-label” and have numerous shortcomings, including side effects such as nausea, headaches, drop of libido, and ED, need for chronic dosing, ramp up periods, variable responses and unwanted drug-drug interactions. Topical agents, including lidocaine-based products affect spontaneity, can numb a partner and be messy.

Dapoxetine (brand name Priligy, owned by Furiex Pharmaceuticals, Inc.) is currently the only approved oral prescription drug to treat PE, with approval in several European countries. Priligy is not approved in the United States. In addition, we are aware of a topical product in late-stage development for PE by Plethora Solutions referred to as PSD502 and studies of Botox for the treatment of PE are being conducted in the United States. These products – if approved in the United States – would represent competition and alternative choices for physicians and potential patients.

In addition, generic tramadol hydrochloride is available in the United States and abroad for treatment of pain. Although the generic drug is not available in the same dosage as Zertane for treatment of PE, it is possible that physicians could prescribe the generic version of the drug “off label” for the treatment of PE instead of Zertane, if Zertane is approved for commercialization. Patients could use generic tramadol hydrochloride dosages that are either higher or lower than what will be approved for Zertane or they could attempt to split dosages to arrive at the dosages approved for Zertane. While any such “off label” use of generic tramadol hydrochloride for treatment of PE may constitute infringement of the Vyrix patent portfolio, liability in that circumstance would be at the level of the physician or the patient making enforcement difficult or impractical.

There are other oxidative stress diagnostic tests available throughout the world, although none are approved in the United States for clinical use. Diagnostic systems that are marketed for clinical use outside the United States include the FRAS 4 system (H&D srl), FREE Carpe Diem (Diacron International), and the FORM and FORMPlus systems (Callegari srl). These systems are used in both research and clinical settings but do not generate significant sales in the clinical setting. If approved in the United States for clinical use, these systems could present competition to the RedoxSYS system.

Our competitors may also succeed in obtaining FDA or other regulatory approvals for their product candidates more rapidly than we are able to do, which could place us at a significant competitive disadvantage or deny us marketing exclusivity rights. Market acceptance of our product candidates will depend on a number of factors, including: (i) potential advantages over existing or alternative therapies or tests, (ii) the actual or perceived safety of similar classes of products, (iii) the effectiveness of sales, marketing, and distribution capabilities, and (iv) the scope of any approval provided by the FDA or foreign regulatory authorities.

Although we believe our product candidates possess attractive attributes, we cannot assure you that our product candidates will achieve regulatory or market acceptance, or that we will be able to compete effectively in the pharmaceutical drug markets. If our product candidates fail to gain regulatory approvals and acceptance in their intended markets, we may not generate meaningful revenues or achieve profitability.

Research and Development

Our strategy is to minimize fixed overhead by outsourcing much of our research and development activities. We believe we will benefit from Ampio’s research and development experience as well as regulatory expertise. Additionally, we intend to utilize consultants with domain experience for research, development and regulatory guidance.

We have consulting agreements in place with two such companies who are actively participating with us on the impending clinical trials for Zertane. For Zertane-ED, we intend to collaborate on pre-clinical studies and clinical trials with our partner in Korea, Daewoong Pharmaceuticals Co.

Our RedoxSYS system has been developed in conjunction with numerous medical device and diagnostic development consultants. Further, we have relationships with regulatory consultants who are actively assisting in the development of our regulatory strategy with the FDA. To complement our internal clinical research efforts with the RedoxSYS system, we have engaged with numerous universities around the world to identify and develop research and clinical applications for the RedoxSYS system. Through these engagements we have access to data and analyses that enable us to develop new uses for the RedoxSYS system. Additionally, we have formal research agreements in place with two prominent U.S.-based universities and one prominent European university for which we are paying a research fee.

Manufacturing

Our business strategy is to use cGMP compliant contract manufacturers for the manufacture of clinical supplies as well as for commercial supplies if required by our commercialization plans, and to transfer manufacturing responsibility to our collaboration partners when possible.

We are party to a 10-year supply agreement with an established manufacturer of tramadol hydrochloride for Zertane. Importantly, product supply has been produced for our planned clinical trials for Zertane.

We have completed the technical development of the RedoxSYS system by engaging contract development and manufacturing companies in the United States. We secured supply and quality agreements with manufacturers for both the RedoxSYS instrument as well as the RedoxSYS sensor strips. Both manufacturers hold long-standing ISO 13485:2003 certifications and are established medical device manufacturers. Both manufacturers have high volume manufacturing capacity such that production volumes can be easily scaled. Both manufacturers have been audited by our quality engineers and are fully compliant.

Government Regulation

Approval Process for Pharmaceutical Products

FDA Approval Process for Pharmaceutical Products

In the United States, pharmaceutical products are subject to extensive regulation by the FDA. The Federal Food, Drug, and Cosmetic Act, or the FDC Act, and other federal and state statutes and regulations, govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and

marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of pharmaceutical products. Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending NDAs, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties, and criminal prosecution.

Pharmaceutical product development in the United States typically involves the performance of satisfactory nonclinical, also referred to as pre-clinical, laboratory and animal studies under the FDA’s Good Laboratory Practice, or GLP, regulation, the development and demonstration of manufacturing processes, which conform to FDA mandated current good manufacturing requirements, or cGMP, including a quality system regulating manufacturing, the submission and acceptance of an IND application, which must become effective before human clinical trials may begin in the United States, obtaining the approval of Institutional Review Boards, or IRBs, at each site where we plan to conduct a clinical trial to protect the welfare and rights of human subjects in clinical trials, adequate and well-controlled clinical trials to establish the safety and effectiveness of the drug for each indication for which FDA approval is sought, and the submission to the FDA for review and approval of an NDA. Satisfaction of FDA requirements typically takes many years and the actual time required may vary substantially based upon the type, complexity, and novelty of the product or disease.

Pre-clinical tests generally include laboratory evaluation of a product candidate, its chemistry, formulation, stability and toxicity, as well as certain animal studies to assess its potential safety and efficacy. Results of these pre-clinical tests, together with chemistry, manufacturing controls and analytical data and the clinical trial protocol, which details the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated, along with other requirements must be submitted to the FDA as part of an IND, which must become effective before human clinical trials can begin. The entire clinical trial and its protocol must be in compliance with what are referred to as good clinical practice, or GCP, requirements. The term, GCP, is used to refer to various FDA laws and regulations, as well as international scientific standards intended to protect the rights, health and safety of patients, define the roles of clinical trial sponsors and assure the integrity of clinical trial data.

An IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises concerns or questions about the intended conduct of the trials and imposes what is referred to as a clinical hold. Pre-clinical studies generally take several years to complete, and there is no guarantee that an IND based on those studies will become effective, allowing clinical testing to begin. In addition to FDA review of an IND, each medical site that desires to participate in a proposed clinical trial must have the protocol reviewed and approved by an independent IRB or Ethics Committee, or EC. The IRB considers, among other things, ethical factors, and the selection and safety of human subjects. Clinical trials must be conducted in accordance with the FDA’s GCP requirements. The FDA and/or IRB may order the temporary, or permanent, discontinuation of a clinical trial or that a specific clinical trial site to be halted at any time, or impose other sanctions for failure to comply with requirements under the appropriate entity jurisdiction.

Clinical trials to support NDAs for marketing approval are typically conducted in three sequential phases, but the phases may overlap. In Phase 1 clinical trials, a product candidate is typically introduced either into healthy human subjects or patients with the medical condition for which the new drug is intended to be used. The main purpose of the trial is to assess a product candidate’s safety and the ability of the human body to tolerate the product candidate. Phase 1 clinical trials generally include less than 50 subjects or patients. During Phase 2 trials, a product candidate is studied in an exploratory trial or trials in a limited number of patients with the disease or medical condition for which it is intended to be used in order to: (i) further identify any possible adverse side effects and safety risks, (ii) assess the preliminary or potential efficacy of the product candidate for specific target diseases or medical conditions, and (iii) assess dosage tolerance and determine the optimal dose for Phase 3 trials. Phase 3 trials are generally undertaken to demonstrate clinical efficacy and to further test for safety in an expanded patient population with the goal of evaluating the overall risk-benefit relationship of the product candidate. Phase 3 trials are generally designed to reach a specific goal or endpoint, the achievement of which is intended to demonstrate the candidate product’s clinical efficacy and adequate information for labeling of the approved drug.

There are three main types of NDAs, which are covered by Section 505 of the FDC Act: (1) an application that contains full reports of investigations of safety and efficacy (Section 505(b)(1)); (2) an application that contains full reports of investigations of safety and effectiveness but where at least some of the information required for approval

comes from studies not conducted by or for the applicant and for which the application has not obtained a right of reference (Section 505(b)(2)); and (3) an application that contains information to show that the proposed product is identical in active ingredient, dosage form, strength, route of administration, labeling, quality, performance characteristics, and intended use, among other things, to a previously approved product (Section 505(j)). Section 505(b)(2) expressly permits the FDA to rely, for approval of an NDA, on data not developed by the applicant. In the pre-IND briefing meeting with Ampio and in June, 2012, the FDA agreed that our NDA may be submitted under Section 505(b)(2). As such, we intend to rely on studies published in the scientific literature and reference FDA-approved NDAs for tramadol-containing products (NDAs 21-693, 20-281 and 21-692) to support the safety and efficacy demonstrated in our clinical program.

After completion of the required clinical testing, an NDA is prepared and submitted to the FDA. FDA approval of the NDA is required before marketing of the product may begin in the U.S. The NDA must include the results of all pre-clinical, clinical, and other testing and a compilation of data relating to the product’s pharmacology, chemistry, manufacture, and controls. The cost of preparing and submitting an NDA is substantial. Under federal law, the submission of most NDAs is additionally subject to a substantial application user fee, currently exceeding $2.3 million and the manufacturer and/or sponsor under an approved NDA are also subject to annual product and establishment user fees, currently approximately $0.1 million per product and $0.6 million per establishment. These fees are typically increased annually.

The FDA has 60 days from its receipt of an NDA to determine whether the application will be accepted for filing based on the FDA’s threshold determination that it is sufficiently complete to permit substantive review. Once the submission is accepted for filing, the FDA begins an in-depth review. The FDA has agreed to certain performance goals in the review of NDAs. Most such applications for standard review drug products are reviewed within ten months; most applications for priority review drugs are reviewed in six months. Priority review can be applied to drugs that the FDA determines offer major advances in treatment, or provide a treatment where no adequate therapy exists. The review process for both standard and priority review may be extended by FDA for three additional months to consider certain late-submitted information, or information intended to clarify information already provided in the submission. The FDA may also refer applications for novel drug products, or drug products which present difficult questions of safety or efficacy, to an advisory committee—typically a panel that includes clinicians and other experts—for review, evaluation, and a recommendation as to whether the application should be approved. The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. Before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP. Additionally, the FDA will inspect the facility or the facilities at which the drug is manufactured. The FDA will not approve the product unless compliance with cGMP is satisfactory and the NDA contains data that provide substantial evidence that the drug is safe and effective in the indication studied.

After FDA evaluates the NDA and the manufacturing facilities, it issues either an approval letter or a complete response letter. A complete response letter generally outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application. If, or when, those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA, the FDA will issue an approval letter. FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. As a condition of NDA approval, the FDA may require a risk evaluation and mitigation strategy, or REMS, to help ensure that the benefits of the drug outweigh the potential risks.

REMS can include medication guides, communication plans for healthcare professionals, and elements to assure safe use, or ETASU. ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring, and the use of patient registries. The requirement for a REMS can materially affect the potential market and profitability of the drug. Moreover, product approval may require substantial post-approval testing and surveillance to monitor the drug’s safety or efficacy. Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following initial marketing.

Foreign Regulatory Approval

Outside of the United States, our ability to market our product candidates will be contingent also upon our receiving marketing authorizations from the appropriate foreign regulatory authorities, whether or not FDA approval has been obtained. The foreign regulatory approval process in most industrialized countries generally encompasses risks similar to those we will encounter in the FDA approval process. The requirements governing conduct of clinical trials and marketing authorizations, and the time required to obtain requisite approvals, may vary widely from country to country and differ from those required for FDA approval.

Under European Union regulatory systems, marketing authorizations may be submitted either under a centralized or decentralized procedure. The centralized procedure provides for the grant of a single marketing authorization that is valid for all European Union member states. The decentralized procedure provides for mutual recognition of national approval decisions. Under this procedure, the holder of a national marketing authorization may submit an application to the remaining member states. Within 90 days of receiving the applications and assessment report, each member state must decide whether to recognize approval. The mutual recognition process results in separate national marketing authorizations in the reference member state and each concerned member state. We will seek to choose the appropriate route of European regulatory filing in an attempt to accomplish the most rapid regulatory approvals for our product candidates when ready for review. However, the chosen regulatory strategy may not secure regulatory approvals or approvals of the chosen product indications. In addition, these approvals, if obtained, may take longer than anticipated. We can provide no assurance that any of our product candidates will prove to be safe or effective, will receive required regulatory approvals, or will be successfully commercialized.

For the registration of Zertane in Australia, an application in common technical document (CTD) format was submitted to the Therapeutic Goods Administration (TGA) in August 2013. This was a Category 1 Type C submission for a new indication, as well as a Type F major variation for a new dosage strength. The submission included original data from the clinical trials and medical literature, given the prior approvals for tramadol hydrochloride in products used in the management of pain. A pre-planning form, or PPF, was submitted to the TGA first, which included only summaries of the clinical, nonclinical and chemistry, manufacturing and control (CMC) sections as well as administrative documents. Within 2.5 months from the PPF submission, the full registration dossier with all supporting and source documentation was provided, which initiated the TGA review process. A consolidated list of questions from TGA was received after approximately 4-5 months of the review cycle and these questions were required to be addressed by us within 60 days receipt of the questions.

We have addressed these questions and expect to receive final TGA evaluation reports for all disciplines in approximately 1 month. While there may be some unresolved issues that come back to us as a second round of questions, the Delegate’s Overview is typically issued about 1 month after the TGA evaluation reports are received. The Delegate’s Overview triggers a request for advice from an Advisory Committee on Prescription Medicines, or ACPM, obtained at formal pre-scheduled meetings held once every two months. After the ACPM meeting, TGA notifies us of the outcome (called the ACPM resolution) and a decision letter is issued.

The Hatch-Waxman Act

In seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent whose claims cover the applicant’s product. Upon approval of a drug, each of the patents listed in the application for the drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book. Drugs listed in the Orange Book can, in turn, be cited by potential competitors in support of approval of an abbreviated new drug application, or ANDA. An ANDA provides for marketing of a drug product that has the same active ingredients in the same strengths and dosage form as the listed drug and has been shown through bioequivalence testing to be therapeutically equivalent to the listed drug. Other than the requirement for bioequivalence testing, ANDA applicants are not required to conduct, or submit results of, pre-clinical or clinical tests to prove the safety or effectiveness of their drug product. Drugs approved in this way are commonly referred to as “generic equivalents” to the listed drug, and can often be substituted by pharmacists under prescriptions written for the original listed drug.

The ANDA applicant is required to certify to the FDA concerning any patents listed for the approved product in the FDA’s Orange Book that: 1) the required patent information has not been filed; 2) the listed patent has expired; 3) the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or 4) the listed patent is invalid or will not be infringed by the new product. A certification that the new product will not infringe the already approved product’s listed patents, or that such patents are invalid, is called a Paragraph IV certification. If the applicant does not challenge the listed patents, the ANDA application will not be approved until all the listed patents claiming the referenced product have expired.

If the ANDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA has been accepted for filing by the FDA. The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement lawsuit within 45 days of the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of 30 months, expiration of the patent, settlement of the lawsuit, or a decision in the infringement case that is favorable to the ANDA applicant.

The ANDA application also will not be approved until any non-patent exclusivity listed in the Orange Book for the referenced product has expired. Federal law provides a period of five years following approval of a drug containing no previously approved active ingredients during which ANDAs for generic versions of those drugs cannot be submitted, unless the submission contains a Paragraph IV challenge to a listed patent—in which case the submission may be made four years following the original product approval. Federal law provides for a period of three years of exclusivity during which FDA cannot grant effective approval of an ANDA based on the approval of a listed drug that contains previously approved active ingredients but is approved in a new dosage form, route of administration or combination, or for a new use; the approval of which was required to be supported by new clinical trials conducted by, or for, the applicant.

Post-Approval Regulation

Even if a product candidate receives regulatory approval, the approval is typically limited to specific clinical indications. Further, even after regulatory approval is obtained, subsequent discovery of previously unknown problems with a product may result in restrictions on its use or even complete withdrawal of the product from the market. Any FDA-approved products manufactured or distributed by us are subject to continuing regulation by the FDA, including record-keeping requirements and reporting of adverse events or experiences. Further, drug manufacturers and their subcontractors are required to register their establishments with the FDA and state agencies, and are subject to periodic inspections by the FDA and state agencies for compliance with cGMP, which impose rigorous procedural and documentation requirements upon us and our contract manufacturers. We cannot be certain that we or our present or future contract manufacturers or suppliers will be able to comply with cGMP regulations and other FDA regulatory requirements. Failure to comply with these requirements may result in, among other things, total or partial suspension of production activities, failure of the FDA to grant approval for marketing, and withdrawal, suspension, or revocation of marketing approvals.

If the FDA approves one or more of our product candidates, we and the contract manufacturers we use for manufacture of clinical supplies and commercial supplies must provide certain updated safety and efficacy information. Product changes, as well as certain changes in the manufacturing process or facilities where the manufacturing occurs or other post-approval changes may necessitate additional FDA review and approval. The labeling, advertising, promotion, marketing and distribution of a drug or biologic product or medical devices, also must be in compliance with FDA and Federal Trade Commission, or FTC, requirements which include, among others, standards and regulations for direct-to-consumer advertising, off-label promotion, industry sponsored scientific and educational activities, and promotional activities involving the Internet. The FDA and FTC have very broad enforcement authority, and failure to abide by these regulations can result in penalties, including the issuance of a warning letter directing us to correct deviations from regulatory standards and enforcement actions that can include seizures, fines, injunctions and criminal prosecution.

Approval Process for Medical Devices

In the United States, the FDCA, FDA regulations and other federal and state statutes and regulations govern, among other things, medical device design and development, preclinical and clinical testing, premarket clearance or approval, registration and listing, manufacturing, labeling, storage, advertising and promotion, sales and distribution, export and import, and post-market surveillance. The FDA regulates the design, manufacturing, servicing, sale and distribution of medical devices, including molecular diagnostic test kits and instrumentation systems. Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending applications, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties and criminal prosecution.

Unless an exemption applies, each medical device we wish to distribute commercially in the United States will require marketing authorization from the FDA prior to distribution. The two primary types of FDA marketing authorization applicable to a device are premarket notification, also called 510(k) clearance, and premarket approval, also called PMA approval. The type of marketing authorization is generally linked to the classification of the device. The FDA classifies medical devices into one of three classes (Class I, II or III) based on the degree of risk the FDA determines to be associated with a device and the level of regulatory control deemed necessary to ensure the device’s safety and effectiveness. Devices requiring fewer controls because they are deemed to pose lower risk are placed in Class I or II. Class I devices are deemed to pose the least risk and are subject only to general controls applicable to all devices, such as requirements for device labeling, premarket notification and adherence to the FDA’s current Good Manufacturing Practices, or cGMP, known as the Quality System Regulations, or QSR. Class II devices are intermediate risk devices that are subject to general controls and may also be subject to special controls such as performance standards, product-specific guidance documents, special labeling requirements, patient registries or post-market surveillance. Class III devices are those for which insufficient information exists to assure safety and effectiveness solely through general or special controls and include life-sustaining, life-supporting or implantable devices, devices of substantial importance in preventing impairment of human health, or which present a potential, unreasonable risk of illness or injury.

Most Class I devices and some Class II devices are exempted by regulation from the 510(k) clearance requirement and can be marketed without prior authorization from the FDA. Some Class I devices that have not been so exempted and Class II devices are eligible for marketing through the 510(k) clearance pathway. By contrast, devices placed in Class III generally require PMA approval or 510(k) de novo clearance prior to commercial marketing. The PMA approval process is more stringent, time-consuming and expensive than the 510(k) clearance process, however, the 510(k) clearance process has also become increasingly stringent and expensive. The FDA has provided initial guidance to us that the RedoxSYS system is appropriate for the 510(k) clearance process, likely through the de novo pathway.

510(k) Clearance. To obtain 510(k) clearance for a medical device, an applicant must submit a premarket notification to the FDA demonstrating that the device is “substantially equivalent” to a device legally marketed in the United States that is not subject to PMA approval, commonly known as the “predicate device.” A device is substantially equivalent if, with respect to the predicate device, it has the same intended use and has either (i) the same technological characteristics or (ii) different technological characteristics and the information submitted demonstrates that the device is as safe and effective as a legally marketed device and does not raise different questions of safety or effectiveness. A showing of substantial equivalence sometimes, but not always, requires clinical data. Generally, the 510(k) clearance process can exceed 90 days and may extend to a year or more.

Application fees must accompany medical device submissions. Such fees under the Medical Device User Fees Act, or MDUFA, for 2015 are approximately $258,000 for a full fee application and approximately $5,000 for a 510(k). Fees are adjusted annually. There are also establishment registration and reporting fees of approximately $4,000 and $9,000, respectively.

After a device has received 510(k) clearance for a specific intended use, any change or modification that significantly affects its safety or effectiveness, such as a significant change in the design, materials, method of manufacture or intended use, may require a new 510(k) clearance or PMA approval and payment of an FDA user fee. The determination as to whether or not a modification could significantly affect the device’s safety or effectiveness is initially left to the manufacturer using available FDA guidance; however, the FDA may review this determination to evaluate the regulatory status of the modified product at any time and may require the manufacturer to cease marketing and recall the modified device until 510(k) clearance or PMA approval is obtained. The manufacturer may also be subject to significant regulatory fines or penalties.

Before we can submit a medical device for 510(k) clearance, we may have to perform a series of generally short studies over a period of months, including method comparison, reproducibility, interference and stability studies to ensure that users can perform the test successfully. Some of these studies may take place in clinical environments, but are not usually considered clinical trials. For PMA submissions, we would generally be required to conduct a longer clinical trial over a period of years that supports the clinical utility of the device and how the device will be used.

Although clinical investigations of most devices are subject to the investigational device exemption, or IDE, requirements, clinical investigations of diagnostic tests, including our products and products under development, are generally exempt from the IDE requirements. Thus, clinical investigations by intended users for intended uses of our products generally do not require the FDA’s prior approval but may require approval of an Institutional Review Board, or IRB, and written informed consent by the patient, provided the clinical evaluation testing is non-invasive, does not require an invasive sampling procedure that presents a significant risk, does not intentionally introduce energy into the subject and is not used as a diagnostic procedure without confirmation by another medically established test or procedure. In addition, our products must be labeled per FDA regulations “for research use only-RUO” or “for investigational use only-IUO,” and distribution controls must be established to assure that our products distributed for research, method comparisons or clinical evaluation studies are used only for those purposes.

Regulation After FDA Clearance or Approval. Any devices we manufacture or distribute pursuant to clearance or approval by the FDA are subject to pervasive and continuing regulation by the FDA and certain state agencies. We are required to adhere to applicable regulations setting forth detailed cGMP requirements, as set forth in the QSR, which include, among other things, testing, control and documentation requirements. Non-compliance with these standards can result in, among other things, fines, injunctions, civil penalties, recalls or seizures of products, total or partial suspension of production, refusal of the government to grant 510(k) clearance or PMA approval of devices, withdrawal of marketing approvals and criminal prosecutions, fines and imprisonment. We have designed and implemented our manufacturing facilities under the FDA’s cGMP requirements.

Foreign Regulatory Approval

In the European Union, we are required under the European Medical Device Directive (Council Directive 93/42/EEC) to affix the CE mark to our certain of our products in order to sell the products in member countries of the European Union. The CE mark is an international symbol that represents adherence to certain essential principles of safety and effectiveness mandated in the European Medical Device Directive, which are referred to as the “essential requirements”. Once affixed, the CE mark enables a product to be sold within the European Economic Area, or EEA, which is composed of the 28 member states of the EU plus Norway, Iceland and Liechtenstein as well as other countries that accept the CE mark.

To demonstrate compliance with the essential requirements, we must undergo a conformity assessment procedure which varies according to the type of medical device and its classification. Except for low risk medical devices (Class I with no measuring function and which are not sterile) where the manufacturer can issue an EC Declaration of Conformity based on a self-assessment of the conformity of its products with the essential requirements of the Medical Devices Directive, a conformity assessment procedure requires the intervention of an organization accredited by a member state of the EEA to conduct conformity assessments, or a notified body. Depending on the relevant conformity assessment procedure, the notified body would typically audit and examine the technical file and the quality system for the manufacture, design and final inspection of our devices. The notified body issues a CE certificate of Conformity following successful completion of a conformity assessment procedure conducted in relation to the medical device and its manufacturer and their conformity with the essential requirements. This certificate entitles the manufacturer to affix the CE mark to its medical devices after having prepared and signed a related EC Declaration of Conformity.

If we modify our devices we may need to apply for permission to affix the CE mark to the modified product. Additionally, we may need to apply for a CE mark for any new products that we may develop in the future. Certain products regulated as medical devices according to EC-Directives are subject to vigilance requirements for reporting of adverse events.

We will be subject to additional regulations in other countries in which we market, sell and import our products, including Canada. We or our distributors must receive all necessary approvals or clearance prior to marketing and/or importing our products in those markets.

The International Standards Organization, or ISO, promulgates internationally recognized standards, including those for the requirements of quality systems. To support ISO certifications, surveillance audits are conducted by a notified body yearly and recertification audits every three years that assess continued compliance with the relevant ISO standards.

Other Regulatory Matters

Manufacturing, sales, promotion and other activities following product approval are also subject to regulation by numerous regulatory authorities in addition to the FDA, including, in the United States, the Centers for Medicare & Medicaid Services, other divisions of the Department of Health and Human Services, the Drug Enforcement Administration, the Consumer Product Safety Commission, the Federal Trade Commission, the Occupational Safety & Health Administration, the Environmental Protection Agency and state and local governments. In the United States, sales, marketing and scientific/educational programs must also comply with state and federal fraud and abuse laws. Pricing and rebate programs must comply with the Medicaid rebate requirements of the U.S. Omnibus Budget Reconciliation Act of 1990 and more recent requirements in the Health Care Reform Law, as amended by the Health Care and Education Affordability Reconciliation Act, or ACA. If products are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements apply. The handling of any controlled substances must comply with the U.S. Controlled Substances Act and Controlled Substances Import and Export Act. Products must meet applicable child-resistant packaging requirements under the U.S. Poison Prevention Packaging Act. Manufacturing, sales, promotion and other activities are also potentially subject to federal and state consumer protection and unfair competition laws.

The distribution of pharmaceutical products is subject to additional requirements and regulations, including extensive record-keeping, licensing, storage and security requirements intended to prevent the unauthorized sale of pharmaceutical products.

The failure to comply with regulatory requirements subjects firms to possible legal or regulatory action. Depending on the circumstances, failure to meet applicable regulatory requirements can result in criminal prosecution, fines, imprisonment or other penalties, injunctions, recall or seizure of products, total or partial suspension of production, denial or withdrawal of product approvals, or refusal to allow a firm to enter into supply contracts, including government contracts. In addition, even if a firm complies with FDA and other requirements, new information regarding the safety or effectiveness of a product could lead the FDA to modify or withdraw product approval. Prohibitions or restrictions on sales or withdrawal of future products marketed by us could materially affect our business in an adverse way.

Changes in regulations, statutes or the interpretation of existing regulations could impact our business in the future by requiring, for example: (i) changes to our manufacturing arrangements; (ii) additions or modifications to product labeling; (iii) the recall or discontinuation of our products; or (iv) additional record-keeping requirements. If any such changes were to be imposed, they could adversely affect the operation of our business.

U.S. Patent Term Restoration and Marketing Exclusivity

Depending upon the timing, duration and other specific aspects of the FDA approval of our drug candidates, some of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of an NDA plus the time between the submission date of an NDA and the approval of that application. Only one patent applicable to an approved drug is eligible for the extension and the application for the extension must be submitted prior to the

expiration of the patent. The U.S. Patent and Trademark Office, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. In the future, we intend to apply for restoration of patent term for one of our currently owned or licensed patents to add patent life beyond the current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant NDA.

Market exclusivity provisions under the FDCA can also delay the submission or the approval of certain marketing applications. The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to obtain approval of an NDA for a new chemical entity. A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance. Recently FDA stated that it may change its interpretation of 5-year NCE exclusivity determinations to apply to each drug substance in a fixed-combination drug product, not for the drug product as a whole. If this change is implemented, for example, a fixed-combination drug product that contains a drug substance with a single, new active moiety would be eligible for 5 year NCE exclusivity, even if the fixed-combination also contains a drug substance with a previously approved active moiety. During the exclusivity period, the FDA may not accept for review an abbreviated new drug application, or ANDA, or a Section 505(b)(2) NDA submitted by another company for another drug based on the same active moiety, regardless of whether the drug is intended for the same indication as the original innovator drug or for another indication, where the applicant does not own or have a legal right of reference to all the data required for approval. However, an application may be submitted after four years if it contains a certification of patent invalidity or non- infringement to one of the patents listed with the FDA by the innovator NDA holder. The FDCA also provides three years of marketing exclusivity for an NDA, or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example new indications, dosages or strengths of an existing drug. This three-year exclusivity covers only the modification for which the drug received approval on the basis of the new clinical investigations and does not prohibit the FDA from approving ANDAs for drugs containing the active agent for the original indication or condition of use. Five-year and three-year exclusivity will not delay the submission or approval of a full NDA. However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the pre-clinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness. Orphan drug exclusivity, as described above, may offer a seven-year period of marketing exclusivity, except in certain circumstances. Pediatric exclusivity is another type of regulatory market exclusivity in the United States. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric trial in accordance with an FDA-issued “Written Request” for such a trial.

Reimbursement

We do not anticipate that the sales of our product candidates, once approved for sale, will be heavily dependent upon reimbursement by third-party payors. Traditionally, sales of pharmaceutical products that are not “life style” indications depend, in part, on the extent to which products will be covered by third-party payors, such as government health programs, commercial insurance and managed healthcare organizations. These third-party payors are increasingly reducing reimbursements for medical products and services. Lack of third-party reimbursement for our product candidate or a decision by a third-party payor to not cover our product candidates could reduce physician usage of the product candidate and have a material adverse effect on our sales, results of operations and financial condition.

In addition, in some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug pricing vary widely from country to country. For example, the European Union provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. A member state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products. Historically, products launched in the European Union do not follow price structures of the United States and generally tend to be significantly lower.

Employees

As of April 16, 2015, we employ seven full-time employees and utilize the services of a number of consultants on a temporary basis, including various Ampio employees pursuant to a services agreement. We have never had a work stoppage, and none of our employees is represented by a labor organization or under any collective-bargaining arrangements. We consider our employee relations to be good.

Facilities

Pursuant to our services agreements with Ampio, we use a portion of Ampio’s office space as our office space, which is located in Englewood, Colorado. We also expect to open an office in Raleigh, North Carolina. Ampio’s lease expires in 2024 and our cost for the office space is included in our quarterly payment under the services agreements. We believe our current office space is sufficient to meet our current needs.

Legal Proceedings

As of the date of this Form 8-K, we are not party to any legal matters or claims, and none of our property is subject to any legal proceedings. In the future we may become party to legal matters and claims arising in the ordinary course of business, the resolution of which we do not anticipate would have a material adverse impact on our financial position, results of operations or cash flows.

RISK FACTORS

Investing in our common stock involves a high degree of risk. Before investing in our common stock you should carefully consider the following risks, together with the financial and other information contained in this Form 8-K. If any of the following risks actually occurs, our business, prospects, financial condition and results of operations could be adversely affected. In that case, the trading price of our common stock would likely decline and you may lose all or a part of your investment.

Risks Related to Our Financial Condition and Capital Requirements

We have limited operating history, have incurred losses, and can give no assurance of profitability.

We are a clinical-stage healthcare company with a limited operating history. We have not generated material revenue to date and are not profitable, and have incurred losses in each year since our inception. Our net loss for the years ended December 31, 2014 and 2013 was $7.1 million and $3.9 million, respectively. We have not demonstrated the ability to be a revenue-generating enterprise, and without significant financing, there is substantial doubt about our ability to continue as a going concern. We expect to incur substantial losses for the foreseeable future. Our ability to generate revenue is uncertain, and we may never achieve profitability. We have a very limited operating history on which investors can evaluate our potential for future success. Potential investors should evaluate us in light of the expenses, delays, uncertainties, and complications typically encountered by early-stage businesses, many of which will be beyond our control. These risks include the following:

•

regulatory approval;

•

lack of sufficient capital;

•

unanticipated problems, delays, and expense relating to product development and implementation;

•

lack of intellectual property;

•

licensing and marketing difficulties;

•

competition;

•

technological changes; and

•

uncertain market acceptance of our product candidates.

As a result of our limited operating history, and the increasingly competitive nature of the markets in which we compete, our historical financial data, which consists of allocations of expenses from Ampio, is of limited value in anticipating future operating expenses. Our planned expense levels will be based in part on our expectations concerning future operations, which is difficult to forecast accurately based on our stage of development. We may be unable to adjust spending in a timely manner to compensate for any unexpected budgetary shortfall.

We have not received any material revenues from the commercialization of our product candidates and might not receive significant revenues from the commercialization of our product candidates in the near term. In September 2011, Ampio entered into an agreement to license, develop and commercialize Zertane in South Korea with a Korean pharmaceutical company, which provided for a $500,000 upfront payment and an agreement to make future milestone payments contingent upon regulatory approvals and cumulative net sales targets. We may enter into additional licensing and collaboration arrangements, which may provide us with potential milestone payments and royalties, and those arrangements, if obtained, will be our primary source of revenues for the coming years. We cannot be certain that any other licensing or collaboration arrangements will be concluded, or that the terms of those arrangements will result in our receiving material revenues. To obtain revenues from product candidates, we must succeed, either alone or with others, in a range of challenging activities, including completing clinical trials of our product candidates, obtaining positive results from the clinical trials, achieving marketing approval for these product

candidates, manufacturing, marketing and selling those products for which we, or our collaborators, may obtain marketing approval, satisfying any post-marketing requirements and obtaining reimbursement for our products from private insurance or government payors. We, and our collaborators, may never succeed in these activities and, even if we do, or one of our collaborators does, we may never generate revenues that are large enough for us to achieve profitability.

We may need to raise additional funding, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations.

We are currently advancing our product candidates through clinical development. Developing product candidates is expensive, lengthy and risky, and we expect our research and development expenses to increase substantially in connection with our ongoing activities, particularly as we advance Zertane into two planned Phase 3 clinical trials in the United States and develop RedoxSYS system for additional applications.

As of December 31, 2014, our cash and cash equivalents were $160,905. Our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings, government or other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements or a combination of these approaches. In any event, we will require additional capital to obtain regulatory approval for, and to commercialize, our product candidates. Raising funds in the current economic environment may present additional challenges. Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations.

Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may adversely affect the holdings or the rights of our stockholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our shares to decline. The sale of additional equity or convertible securities would dilute all of our stockholders. The incurrence of indebtedness would result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or product candidate or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.

If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of any product candidate or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.

If we do not obtain the capital necessary to fund our operations, we will be unable to successfully develop, obtain regulatory approval of, and commercialize, our product candidates.

The development of pharmaceutical products and medical devices is capital-intensive. We anticipate we may require additional financing to continue to fund our operations. Our future capital requirements will depend on, and could increase significantly as a result of, many factors including:

•

progress in, and the costs of, our pre-clinical studies and clinical trials and other research and development programs;

•

the scope, prioritization and number of our research and development programs;

•

the achievement of milestones or occurrence of other developments that trigger payments under any collaboration agreements we obtain;

•

the extent to which we are obligated to reimburse, or entitled to reimbursement of, clinical trial costs under future collaboration agreements, if any;

•

the costs involved in filing, prosecuting, enforcing and defending patent claims and other intellectual property rights;

•

the costs of securing manufacturing arrangements for commercial production; and

•

the costs of establishing or contracting for sales and marketing capabilities if we obtain regulatory clearances to market our product candidates.

Until we can generate significant continuing revenues, we expect to satisfy our future cash needs through collaboration arrangements, sales of our securities, debt financings, or by licensing one or more of our product candidates. Dislocations in the financial markets have generally made equity and debt financing more difficult to obtain, and may have a material adverse effect on our ability to meet our fundraising needs. We cannot be certain that additional funding will be available to us on acceptable terms, if at all. If funds are not available, we may be required to delay, reduce the scope of, or eliminate one or more of our research or development programs or our commercialization efforts. Additional funding, if obtained, may significantly dilute existing shareholders if that financing is obtained through issuing equity or instruments convertible into equity.

We will incur increased costs associated with, and our management will need to devote substantial time and effort to, compliance with public company reporting and other requirements.

As a public company, we will incur significant legal, accounting and other expenses that Vyrix and Luoxis did not incur as private companies. In addition, the rules and regulations of the SEC and any national securities exchange to which we may be subject in the future impose numerous requirements on public companies, including requirements relating to our corporate governance practices, with which we will need to comply. Further, we will be required to, among other things, file annual, quarterly and current reports with respect to our business and operating results. Based on currently available information and assumptions, we estimate that we will incur approximately $500,000 in expenses on an annual basis as a direct result of the requirements of being a publicly traded company. Our management and other personnel will need to devote substantial time to gaining expertise regarding operations as a public company and compliance with applicable laws and regulations, and our efforts and initiatives to comply with those requirements could be expensive.

Risks Related to Product Development, Regulatory Approval and Commercialization

We cannot be certain that the FDA will consider premature ejaculation to be a treatable medical condition or that we will be able to obtain regulatory approval for, or successfully commercialize, Zertane.

We currently have no drug products approved for sale and may never be able to develop marketable drug products. Zertane will require substantial additional clinical development, testing, and regulatory approval before we are permitted to commence its commercialization. Our other drug product candidate, Zertane-ED, is still in pre-clinical development. The clinical trials of our product candidates are, and the manufacturing and marketing of our product candidates will be, subject to extensive and rigorous review and regulation by numerous government authorities in the United States and in other countries where we intend to test and, if approved, market any product candidate. Before obtaining regulatory approvals for the commercial sale of any product candidate, we must demonstrate through pre-clinical testing and clinical trials that the product candidate is safe and effective for use in each target indication. This process can take many years and may include post-marketing studies and surveillance, which will require the expenditure of substantial resources. Of the large number of drugs in development in the United States, only a small percentage successfully completes the U.S. Food and Drug Administration, or FDA, regulatory approval process and is commercialized. Accordingly, even if we are able to obtain the requisite financing to continue to fund our development and clinical programs, we cannot assure you that Zertane or any other of our product candidates will be successfully developed or commercialized.

We are not permitted to market Zertane in the United States until we receive approval of a New Drug Application, or an NDA, from the FDA, or in any foreign countries until we receive the requisite approval from such countries. Obtaining approval of an NDA is a complex, lengthy, expensive and uncertain process, and the FDA may delay, limit or deny approval of Zertane for many reasons, including, among others:

•

we may not be able to demonstrate that Zertane is safe and effective in treating premature ejaculation, to the satisfaction of the FDA;

•

the results of our clinical trials may not meet the level of statistical or clinical significance required by the FDA for marketing approval;

•

the FDA may disagree with the number, design, size, conduct or implementation of our clinical trials;

•

the FDA may require that we conduct additional clinical trials;

•

the FDA may not approve the formulation, labeling or specifications of Zertane;

•

the clinical research organizations, or CROs, that we retain to conduct our clinical trials may take actions outside of our control that materially adversely impact our clinical trials;

•

the FDA may find the data from pre-clinical studies and clinical trials insufficient to demonstrate that Zertane’s clinical and other benefits outweigh its safety risks, such as the risk of drug abuse by patients or the public in general;

•

the FDA may disagree with our interpretation of data from our pre-clinical studies and clinical trials;

•

the FDA may not accept data generated at our clinical trial sites;

•

if our NDA, if and when submitted, is reviewed by an advisory committee, the FDA may have difficulties scheduling an advisory committee meeting in a timely manner or the advisory committee may recommend against approval of our application or may recommend that the FDA require, as a condition of approval, additional pre-clinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions;

•

the FDA may require development of a Risk Evaluation and Mitigation Strategy, or REMS, as a condition of approval or post-approval;

•

the FDA or the applicable foreign regulatory agency may not approve the manufacturing processes or facilities of third-party manufacturers with which we contract; or

•

the FDA may change its approval policies or adopt new regulations.

In addition, Ampio obtained guidance from FDA on our NDA-enabling Phase 3 trials at a pre-IND meeting held in June 2012, including information to help us define the target patient population, select co-primary endpoints and design an acceptable patient-reported outcome measure. As a result of direction provided at the meeting, along with the existing data from six clinical trials of Zertane conducted to date, we believe we are positioned to advance Zertane into Phase 3 clinical trials in the United States. However, we can provide no assurance that the FDA will not change its guidance about our planned Phase 3 clinical trials and require us to significantly modify the design of, or endpoints for, our planned clinical trials.

Any of these factors, many of which are beyond our control, could jeopardize our ability to obtain regulatory approval for and successfully market Zertane. Moreover, because our business is almost entirely dependent upon this one product candidate, any such setback in our pursuit of regulatory approval would have a material adverse effect on our business and prospects.

Favorable results in the prior clinical trials of Zertane outside of the United States may not be predictive of the results in our planned Phase 3 clinical trials of Zertane in the United States or the designs of our Phase 3 clinical trials may be inadequate for FDA approval.

A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials even after achieving promising results in earlier-stage development. The prior clinical trials of Zertane showed favorable safety and efficacy data; however, we will have different enrollment criteria in our planned Phase 3 clinical trials. In the Phase 2 clinical trials, we were able to enroll patients utilizing a broader definition of premature ejaculation, or PE. In our Phase 3 clinical trials, we will be utilizing the definition of lifelong PE adopted by the International Society for Sexual Medicine, or the ISSM: “premature ejaculation is a male sexual dysfunction characterized by ejaculation which always or nearly always occurs prior to or within a minute of vaginal penetration; and inability to delay ejaculation on all or nearly all vaginal penetrations; and negative personal consequences, such as distress, bother, frustration and/or the avoidance of sexual intimacy.” As a result, we may encounter difficulty enrolling a sufficient number of patients in a timely fashion and we may not observe a similarly favorable safety and efficacy profile as our prior clinical trials.

If we do not secure collaborations with strategic partners to test, commercialize and manufacture product candidates, we may not be able to successfully develop products and generate meaningful revenues.

A key aspect of our current strategy is to selectively enter into collaborations with third parties to conduct clinical testing, as well as to commercialize and manufacture product candidates. Our ability to generate revenues from these arrangements will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements. We currently have two collaboration agreements in effect, which relate to sales of Zertane in South Korea and Brazil and were entered into by Ampio. Collaboration agreements typically call for milestone payments that depend on successful demonstration of efficacy and safety, obtaining regulatory approvals, and clinical trial results. Collaboration revenues are not guaranteed, even when efficacy and safety are demonstrated. The current economic environment may result in potential collaborators electing to reduce their external spending, which may prevent us from developing our product candidates.

Even if we succeed in securing collaborators, the collaborators may fail to develop or effectively commercialize products using our product candidates. Collaborations involving our product candidates pose a number of risks, including the following:

•

collaborators may not have sufficient resources or decide not to devote the necessary resources due to internal constraints such as budget limitations, lack of human resources, or a change in strategic focus;

•

collaborators may believe our intellectual property is not valid, is not infringed by potential competitors or is unenforceable or the product candidate infringes on the intellectual property rights of others;

•

collaborators may dispute their responsibility to conduct development and commercialization activities pursuant to the applicable collaboration, including the payment of related costs or the division of any revenues;

•

collaborators may decide to pursue a competitive product developed outside of the collaboration arrangement;

•

collaborators may not be able to obtain, or believe they cannot obtain, the necessary regulatory approvals;

•

collaborators may delay the development or commercialization of our product candidates in favor of developing or commercializing another party’s product candidate; or

•

collaborators may decide to terminate or not to renew the collaboration for these or other reasons.

Thus, collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all. For example, our former collaborator that licensed Zertane conducted clinical trials which we believe demonstrated efficacy in treating PE, but the collaborator undertook a merger that we believe altered its strategic focus and thereafter terminated the collaboration agreement. The merger also created a potential conflict with a principal customer of the acquired company, which sells a product to treat premature ejaculation in certain European markets.

Collaboration agreements are generally terminable without cause on short notice. Once a collaboration agreement is signed, it may not lead to commercialization of a product candidate. We also face competition in seeking out collaborators. If we are unable to secure new collaborations that achieve the collaborator’s objectives and meet our expectations, we may be unable to advance our product candidates and may not generate meaningful revenues.

Our product candidates are expected to undergo clinical trials that are time-consuming and expensive, the outcomes of which are unpredictable, and for which there is a high risk of failure. If clinical trials of our product candidates fail to satisfactorily demonstrate safety and efficacy to the FDA and other regulators, we, or our collaborators, may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of these product candidates.

Pre-clinical testing and clinical trials are long, expensive and unpredictable processes that can be subject to extensive delays. We cannot guarantee that any clinical studies will be conducted as planned or completed on schedule, if at all. It may take several years to complete the pre-clinical testing and clinical development necessary to commercialize a drug or biologic, and delays or failure can occur at any stage. Interim results of clinical trials do not necessarily predict final results, and success in pre-clinical testing and early clinical trials does not ensure that later clinical trials will be successful. A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in advanced clinical trials even after promising results in earlier trials and we cannot be certain that we will not face similar setbacks. The design of a clinical trial can determine whether its results will support approval of a product and flaws in the design of a clinical trial may not become apparent until the clinical trial is well advanced. An unfavorable outcome in one or more trials would be a major set-back for our product candidates and for us. Due to our limited financial resources, an unfavorable outcome in one or more trials may require us to delay, reduce the scope of, or eliminate one or more product development programs, which could have a material adverse effect on our business and financial condition and on the value of our common stock.

In connection with clinical testing and trials, we face a number of risks, including:

•

a product candidate is ineffective, inferior to existing approved medicines, unacceptably toxic, or has unacceptable side effects;

•

patients may die or suffer other adverse effects for reasons that may or may not be related to the product candidate being tested;

•

the results may not confirm the positive results of earlier testing or trials; and

•

the results may not meet the level of statistical significance required by the FDA or other regulatory agencies to establish the safety and efficacy of our product candidates.

The results of pre-clinical studies do not necessarily predict clinical success, and larger and later-stage clinical trials may not produce the same results as earlier-stage clinical trials. Frequently, product candidates developed by pharmaceutical companies have shown promising results in early pre-clinical studies or clinical trials, but have subsequently suffered significant setbacks or failed in later clinical trials. In addition, clinical trials of potential products often reveal that it is not possible or practical to continue development efforts for these product candidates.

If we do not successfully complete pre-clinical and clinical development, we will be unable to market and sell products derived from our product candidates and generate revenues. Even if we do successfully complete clinical trials, those results are not necessarily predictive of results of additional trials that may be needed before an NDA may be submitted to the FDA. Although there are a large number of drugs and biologics in development in the United States and other countries, only a small percentage result in the submission of an NDA to the FDA, even fewer are approved for commercialization, and only a small number achieve widespread physician and consumer acceptance following regulatory approval. If our clinical trials are substantially delayed or fail to prove the safety and effectiveness of our product candidates in development, we may not receive regulatory approval of any of these product candidates and our business and financial condition will be materially harmed.

Delays, suspensions and terminations in our clinical trials could result in increased costs to us and delay or prevent our ability to generate revenues.

Human clinical trials are very expensive, time-consuming, and difficult to design, implement and complete. We currently expect clinical trials of our product candidates could take up to 24 months to complete, but the completion of trials for our product candidates may be delayed for a variety of reasons, including delays in:

•

demonstrating sufficient safety and efficacy to obtain regulatory approval to commence a clinical trial;

•

reaching agreement on acceptable terms with prospective contract research organizations and clinical trial sites;

•

validating test methods to support quality testing of the drug substance and drug product;

•

obtaining sufficient quantities of the drug substance;

•

manufacturing sufficient quantities of a product candidate;

•

obtaining approval of an Investigational New Drug application, or IND, from the FDA;

•

obtaining institutional review board approval to conduct a clinical trial at a prospective clinical trial site;

•

determining dosing and clinical design and making related adjustments; and

•

patient enrollment, which is a function of many factors, including the size of the patient population, the nature of the protocol, the proximity of patients to clinical trial sites, the availability of effective treatments for the relevant disease and the eligibility criteria for the clinical trial.

The commencement and completion of clinical trials for our product candidates may be delayed, suspended or terminated due to a number of factors, including:

•

lack of effectiveness of product candidates during clinical trials;

•

adverse events, safety issues or side effects relating to the product candidates or their formulation;

•

inability to raise additional capital in sufficient amounts to continue clinical trials or development programs, which are very expensive;

•

the need to sequence clinical trials as opposed to conducting them concomitantly in order to conserve resources;

•

our inability to enter into collaborations relating to the development and commercialization of our product candidates;

•

failure by us or our collaborators to conduct clinical trials in accordance with regulatory requirements;

•

our inability or the inability of our collaborators to manufacture or obtain from third parties materials sufficient for use in pre-clinical studies and clinical trials;

•

governmental or regulatory delays and changes in regulatory requirements, policy and guidelines, including mandated changes in the scope or design of clinical trials or requests for supplemental information with respect to clinical trial results;

•

failure of our collaborators to advance our product candidates through clinical development;

•

delays in patient enrollment, especially in the United States where the screening requirements for participation in our trials are expected to be more stringent than the previous European trials of Zertane, variability in the number and types of patients available for clinical trials, and lower-than anticipated retention rates for patients in clinical trials;

•

difficulty in patient monitoring and data collection due to failure of patients to maintain contact after treatment;

•

a regional disturbance where we or our collaborative partners are enrolling patients in our clinical trials, such as a pandemic, terrorist activities or war, or a natural disaster; and

•

varying interpretations of our data, and regulatory commitments and requirements by the FDA and similar foreign regulatory agencies.

Many of these factors may also ultimately lead to denial of our NDA for a current or potential product candidate. If we experience delay, suspensions or terminations in a clinical trial, the commercial prospects for the related product candidate will be harmed, and our ability to generate product revenues will be delayed.

In addition, we may encounter delays or product candidate rejections based on new governmental regulations, future legislative or administrative actions, or changes in FDA policy or interpretation during the period of product development. If we obtain required regulatory approvals, such approvals may later be withdrawn. Delays or failures in obtaining regulatory approvals may result in:

•

varying interpretations of data and commitments by the FDA and similar foreign regulatory agencies; and

•

diminishment of any competitive advantages that such product candidates may have or attain.

Furthermore, if we fail to comply with applicable FDA and other regulatory requirements at any stage during this regulatory process, we may encounter or be subject to:

•

diminishment of any competitive advantages that such product candidates may have or attain;

•

delays or termination in clinical trials or commercialization;

•

refusal by the FDA or similar foreign regulatory agencies to review pending applications or supplements to approved applications;

•

product recalls or seizures;

•

suspension of manufacturing;

•

withdrawals of previously approved marketing applications; and

•

fines, civil penalties, and criminal prosecutions.

If our product candidates are not approved by the FDA, we will be unable to commercialize them in the United States.

The FDA must approve any new medicine before it can be commercialized, marketed, promoted or sold in the United States. We must provide the FDA with data from pre-clinical studies and clinical trials that demonstrate that our product candidates are safe and effective for a defined indication before they can be approved for commercial distribution. Clinical testing is expensive, difficult to design and implement, can take many years to complete and is inherently uncertain as to outcome. We must provide data to ensure the identity, strength, quality and purity of the drug substance and drug product. Also, we must assure the FDA that the characteristics and performance of the

clinical batches will be replicated consistently in the commercial batches. We will not obtain approval for a product candidate unless and until the FDA approves an NDA for a drug. The processes by which regulatory approvals are obtained from the FDA to market and sell a new or repositioned product are complex, require a number of years and involve the expenditure of substantial resources. We cannot assure you that any of our product candidates will receive FDA approval in the future, and the time for receipt of any such approval is currently incapable of estimation.

We or our collaborators intend to seek FDA approval for most of our product candidates using an expedited process established by the FDA. If we, or our collaborators, are unable to secure clearances to use expedited development pathways from the FDA for certain of our drug product candidates, we, or they, may be required to conduct additional pre-clinical studies or clinical trials beyond those that we, or they, contemplate, which could increase the expense of obtaining, and delay the receipt of, necessary marketing approvals and of any product revenues.

Assuming successful completion of clinical trials, we expect to submit NDAs to the FDA at various times in the future under Section 505(b)(2) of the Food, Drug and Cosmetic Act, as amended, or the FDCA. NDAs submitted under this section are eligible to receive FDA approval by relying in part on the FDA’s findings of safety and efficacy for a previously approved drug. The FDA’s 1999 guidance on Section 505(b)(2) applications states that new indications for a previously approved drug, a new combination product, a modified active ingredient, or changes in dosage form, strength, formulation, and route of administration of a previously approved product are encompassed within the Section 505(b)(2) NDA process. Relying on Section 505(b)(2) is advantageous because we or our collaborators may not be required (i) to perform the full range of safety and efficacy trials that is otherwise required to secure approval of a new drug, and (ii) obtain a “right of reference” from the applicant that obtained approval of the previously approved drug. However, a Section 505(b)(2) application must support the proposed change of the previously approved drug by including necessary and adequate information, as determined by the FDA, and the FDA may still require us to perform a portion or the full range of safety and efficacy trials.

If one of our product candidates achieves clinical trial objectives, we must prepare and submit to the FDA a comprehensive NDA. Review of the application may lead the FDA to request more information or require us to perform additional clinical trials, thus adding to product development costs and timelines and subsequently delaying any marketing approval from the FDA. Additionally, the review period may vary significantly based on the disease to be treated, availability of alternate treatments, severity of the disease, and the risk/benefit profile of the proposed product. Even if one of our products receives FDA marketing approval, we could be required to conduct post-marketing Phase IV studies and surveillance to monitor for adverse effects. If we experience delays in NDA application processing, requests for additional information or further clinical trials, or are required to conduct post-marketing studies or surveillance, our product development costs could increase substantially, and our ability to generate revenues from a product candidate could be postponed, perhaps indefinitely. The resulting negative impact on our operating results and financial condition may cause the value of our common stock to decline, and you may lose all or a part of your investment.

The approval process outside the United States varies among countries and may limit our ability to develop, manufacture and sell our products internationally. Failure to obtain marketing approval in international jurisdictions would prevent our product candidates from being marketed abroad.

In order to market and sell our products in the European Union and many other jurisdictions, we, and our collaborators, must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and may involve additional testing. We may conduct clinical trials for, and seek regulatory approval to market, our product candidates in countries other than the United States. Depending on the results of clinical trials and the process for obtaining regulatory approvals in other countries, we may decide to first seek regulatory approvals of a product candidate in countries other than the United States, or we may simultaneously seek regulatory approvals in the United States and other countries. If we or our collaborators seek marketing approvals for a product candidate outside the United States, we will be subject to the regulatory requirements of health authorities in each country in which we seek approvals. With respect to marketing authorizations in Europe, we will be required to submit a European marketing authorization application, or MAA, to the European Medicines Agency, or EMA, which conducts a validation and scientific approval process in evaluating a product for safety and efficacy. The approval procedure varies among regions and countries and may involve additional testing, and the time required to obtain approvals may differ from that required to obtain FDA approval.

Obtaining regulatory approvals from health authorities in countries outside the United States is likely to subject us to all of the risks associated with obtaining FDA approval described above. In addition, marketing approval by the FDA does not ensure approval by the health authorities of any other country, and approval by foreign health authorities does not ensure marketing approval by the FDA.

Even if we, or our collaborators, obtain marketing approvals for our product candidates, the terms of approvals and ongoing regulation of our products may limit how we or they market our products, which could materially impair our ability to generate revenue.

Even if we receive regulatory approval for a product candidate, this approval may carry conditions that limit the market for the product or put the product at a competitive disadvantage relative to alternative therapies. For instance, a regulatory approval may limit the indicated uses for which we can market a product or the patient population that may utilize the product, or may be required to carry a warning in its labeling and on its packaging. Products with boxed warnings are subject to more restrictive advertising regulations than products without such warnings. These restrictions could make it more difficult to market any product candidate effectively. Accordingly, assuming we, or our collaborators, receive marketing approval for one or more of our product candidates, we, and our collaborators will continue to expend time, money and effort in all areas of regulatory compliance.

Any of our product candidates for which we, or our collaborators, obtain marketing approval in the future could be subject to post-marketing restrictions or withdrawal from the market and we, and our collaborators, may be subject to substantial penalties if we, or they, fail to comply with regulatory requirements or if we, or they, experience unanticipated problems with our products following approval.

Any of our product candidates for which we, or our collaborators, obtain marketing approval in the future, as well as the manufacturing processes, post-approval studies and measures, labeling, advertising and promotional activities for such products, among other things, will be subject to continual requirements of and review by the FDA and other regulatory authorities. These requirements include submissions of safety and other post-marketing information and reports, registration and listing requirements, requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and recordkeeping. Even if marketing approval of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed or to the conditions of approval, including the FDA requirement to implement a REMS to ensure that the benefits of a drug or biological product outweigh its risks.

The FDA may also impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of a product. The FDA and other agencies, including the Department of Justice, closely regulate and monitor the post-approval marketing and promotion of products to ensure that they are manufactured, marketed and distributed only for the approved indications and in accordance with the provisions of the approved labeling. The FDA imposes stringent restrictions on manufacturers’ communications regarding off-label use and if we, or our collaborators, do not market any of our product candidates for which we, or they, receive marketing approval for only their approved indications, we, or they, may be subject to warnings or enforcement action for off-label marketing. Violation of the FDCA and other statutes, including the False Claims Act, relating to the promotion and advertising of prescription drugs may lead to investigations or allegations of violations of federal and state health care fraud and abuse laws and state consumer protection laws.

If we do not achieve our projected development and commercialization goals in the timeframes we announce and expect, the commercialization of our product candidates may be delayed, and our business will be harmed.

We sometimes estimate for planning purposes the timing of the accomplishment of various scientific, clinical, regulatory and other product development objectives. These milestones may include our expectations regarding the commencement or completion of scientific studies, clinical trials, the submission of regulatory filings, or commercialization objectives. From time to time, we may publicly announce the expected timing of some of these milestones, such as the completion of an ongoing clinical trial, the initiation of other clinical programs, receipt of marketing approval, or a commercial launch of a product. The achievement of many of these milestones may be outside of our control. All of these milestones are based on a variety of assumptions which may cause the timing of achievement of the milestones to vary considerably from our estimates, including:

•

our available capital resources or capital constraints we experience;

•

the rate of progress, costs and results of our clinical trials and research and development activities, including the extent of scheduling conflicts with participating clinicians and collaborators, and our ability to identify and enroll patients who meet clinical trial eligibility criteria;

•

our receipt of approvals by the FDA and other regulatory agencies and the timing thereof;

•

other actions, decisions or rules issued by regulators;

•

our ability to access sufficient, reliable and affordable supplies of compounds used in the manufacture of our product candidates;

•

the efforts of our collaborators with respect to the commercialization of our products; and

•

the securing of, costs related to, and timing issues associated with, product manufacturing as well as sales and marketing activities.

If we fail to achieve announced milestones in the timeframes we announce and expect, the commercialization of our product candidates may be delayed and our business and results of operations may be harmed.

We rely on third parties to conduct our clinical trials and perform data collection and analysis, which may result in costs and delays that prevent us from successfully commercializing product candidates.

We rely, and will rely in the future, on medical institutions, clinical investigators, contract research organizations, contract laboratories, and collaborators to perform data collection and analysis and others to carry out our clinical trials. Our development activities or clinical trials conducted in reliance on third parties may be delayed, suspended, or terminated if:

•

the third parties do not successfully carry out their contractual duties or fail to meet regulatory obligations or expected deadlines;

•

we replace a third party; or

•

the quality or accuracy of the data obtained by third parties is compromised due to their failure to adhere to clinical protocols, regulatory requirements, or for other reasons.

Third party performance failures may increase our development costs, delay our ability to obtain regulatory approval, and delay or prevent the commercialization of our product candidates. While we believe that there are numerous alternative sources to provide these services, in the event that we seek such alternative sources, we may not be able to enter into replacement arrangements without incurring delays or additional costs.

In addition, for Zertane, we are currently using, and relying on, single suppliers and single manufacturers for drug supply for our planned Phase 3 clinical trials and our commercial products. Although there are potential alternative suppliers and manufacturers for Zertane if need be, we have not qualified these vendors to date. If we were required to change vendors, it could result in a failure to meet regulatory requirements or projected timelines and necessary quality standards for successful manufacturing of the various required lots of material for our development and commercialization efforts.

Even if collaborators with which we contract in the future successfully complete clinical trials of our product candidates, those candidates may not be commercialized successfully for other reasons.

Even if we contract with collaborators that successfully complete clinical trials for one or more of our product candidates, those candidates may not be commercialized for other reasons, including:

•

failure to receive regulatory clearances required to market them as drugs;

•

being subject to proprietary rights held by others;

•

being difficult or expensive to manufacture on a commercial scale;

•

having adverse side effects that make their use less desirable; or

•

failing to compete effectively with products or treatments commercialized by competitors.

Relying on third-party manufacturers may result in delays in our clinical trials and product introductions.

Developing and commercializing new medicines entails significant risks and expenses. Our clinical trials may be delayed if third-party manufacturers are unable to assure a sufficient quantity of the drug product to meet our study needs. If our clinical trials are delayed, our commercialization efforts may be impeded, or our costs may increase.

Once regulatory approval is obtained, a marketed product and its manufacturer are subject to continual review. The discovery of previously unknown problems with a product or manufacturer may result in restrictions on the product, manufacturer or manufacturing facility, including withdrawal of the product from the market. Any manufacturers with which we contract are required to operate in accordance with FDA-mandated current good manufacturing practices, or cGMPs. A failure of any of our contract manufacturers to establish and follow cGMPs and to document their adherence to such practices may lead to significant delays in the launch of products based on our product candidates into the market. Failure by third-party manufacturers to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, revocation or suspension of marketing approval for any products granted pre-market approvals, seizures or recalls of products, operating restrictions, and criminal prosecutions.

We intend to enter into agreements with third parties to sell and market any products we develop and for which we obtain regulatory approvals, which may affect the sales of our products and our ability to generate revenues.

We do not currently maintain an organization for the sale, marketing and distribution of pharmaceutical products and may contract with, or license, third parties to market any products we develop that receive regulatory approvals. Outsourcing sales and marketing in this manner may subject us to a variety of risks, including:

•

our inability to exercise control over sales and marketing activities and personnel;

•

failure or inability of contracted sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe our products;

•

disputes with third parties concerning sales and marketing expenses, calculation of royalties, and sales and marketing strategies; and

•

unforeseen costs and expenses associated with sales and marketing.

If we are unable to partner with a third party that has adequate sales, marketing, and distribution capabilities, we may have difficulty commercializing our product candidates, which would adversely affect our business, financial condition, and ability to generate product revenues.

We face substantial competition from companies with considerably more resources and experience than we have, which may result in others discovering, developing, receiving approval for, or commercializing products before or more successfully than us.

Many of our potential competitors have substantially greater financial, technical, personnel and marketing resources than we do. In addition, many of these competitors have significantly greater resources devoted to product development and pre-clinical research. Our ability to compete successfully will depend largely on our ability to:

•

discover and develop product candidates that are superior to other products in the market;

•

attract and retain qualified personnel;

•

obtain patent and/or other proprietary protection for our product candidates;

•

obtain required regulatory approvals; and

•

obtain collaboration arrangements to commercialize our product candidates.

Established pharmaceutical companies devote significant financial resources to discovering, developing or licensing novel compounds that could make our product candidates obsolete. Our competitors may obtain patent protection, receive FDA approval, and commercialize medicines before us. Other companies are engaged in the discovery of compounds that may compete with the product candidates we are developing.

Any new product that competes with a currently-approved treatment or medicine must demonstrate compelling advantages in efficacy, convenience, tolerability and/or safety in order to address price competition and be commercially successful. If we are not able to compete effectively against our current and future competitors, our business will not grow and our financial condition and operations will suffer.

Even if any of our product candidates are commercialized, they may not be accepted by physicians, patients, or the medical community in general. Even if we, or our collaborators, are able to commercialize our product candidates, the products may become subject to market conditions that could harm our business.

Even if the medical community accepts a product as safe and efficacious for its indicated use, physicians may choose to restrict the use of the product if we or any collaborator is unable to demonstrate that, based on experience, clinical data, side-effect profiles and other factors, our product is preferable to any existing medicines or treatments. We cannot predict the degree of market acceptance of any product candidate that receives marketing approval, which will depend on a number of factors, including, but not limited to:

•

the demonstration of the clinical efficacy and safety of the product;

•

the approved labeling for the product and any required warnings;

•

the advantages and disadvantages of the product compared to alternative treatments;

•

our and any collaborator’s ability to educate the medical community about the safety and effectiveness of the product;

•

the reimbursement policies of government and third-party payors pertaining to the product; and

•

the market price of our product relative to competing treatments.

In the case of Zertane, tramadol hydrochloride is a well-established centrally acting synthetic analgesic that has been used for more than 30 years as a treatment for moderate to severe pain. As an opioid, tramadol hydrochloride has been associated with certain adverse effects including dizziness, nausea, constipation, vertigo, headache, vomiting and drowsiness. As a result, physicians may be reluctant to prescribe Zertane to treat premature ejaculation.

Generic tramadol hydrochloride is available in the United States and abroad for treatment of pain. Although the generic drug is not available in the same dosage as Zertane for treatment of PE, it is possible that physicians could prescribe the generic version of the drug “off label” for the treatment of PE instead of Zertane, which would adversely affect our business.

Although Zertane is a specifically formulated tramadol hydrochloride, generic tramadol hydrochloride is commercially available in the United States and abroad for treatment of pain. Although the generic drug is not available in the same dosage as Zertane for treatment of PE, it is possible that physicians could prescribe the generic version of the drug “off label” for the treatment of PE instead of Zertane, which would adversely affect our business. Patients could use generic tramadol hydrochloride dosages that are either higher or lower than what will be approved for Zertane or they could attempt to split dosages to arrive at the dosages approved for Zertane. While any such “off label” use of generic tramadol hydrochloride for treatment of PE may constitute infringement of our patent portfolio, liability in that circumstance would be at the level of the physician or the patient making enforcement difficult or impractical.

Government restrictions on pricing and reimbursement, as well as other healthcare payor cost-containment initiatives, may negatively impact our ability to generate revenues if we obtain regulatory approval to market a product.

The continuing efforts of the government, insurance companies, managed care organizations and other payors of health care costs to contain or reduce costs of health care may adversely affect one or more of the following:

•

our or our collaborators’ ability to set a price we believes is fair for our products, if approved;

•

our ability to generate revenues and achieve profitability; and

•

the availability of capital.

The 2010 enactments of the Patient Protection and Affordable Care Act, or PPACA, and the Health Care and Education Reconciliation Act are expected to significantly impact the provision of, and payment for, health care in the United States. Various provisions of these laws take effect over the next several years, and are designed to expand Medicaid eligibility, subsidize insurance premiums, provide incentives for businesses to provide health care benefits, prohibit denials of coverage due to pre-existing conditions, establish health insurance exchanges, and provide additional support for medical research. Additional legislative proposals to reform healthcare and government insurance programs, along with the trend toward managed healthcare in the United States, could influence the purchase of medicines and reduce demand and prices for our products, if approved. This could harm our or our collaborators’ ability to market any products and generate revenues. Although we do not expect to receive significant revenues from reimbursement of our products by commercial third-party payors and government payors, cost containment measures that health care payors and providers are instituting and the effect of further health care reform could significantly reduce potential revenues from the sale of any of our product candidates approved in the future, and could cause an increase in our compliance, manufacturing, or other operating expenses. In addition, in certain foreign markets, the pricing of prescription drugs is subject to government control and reimbursement may in some cases be unavailable. We believe that pricing pressures at the federal and state level, as well as internationally, will continue and may increase, which may make it difficult for us to sell our potential products that may be approved in the future at a price acceptable to us or any of our future collaborators.

In addition, in some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug pricing vary widely from country to country. For example, the European Union provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. A member state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. In the case of Zertane, a member state may require that physicians prescribe the generic drug tramadol hydrochloride instead of our branded drug Zertane, if our product candidate is approved for marketing. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products. Historically, pharmaceutical products launched in the European Union do not follow price structures of the United States and generally tend to have significantly lower prices.

Our product candidates may cause undesirable side effects that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.

To date six clinical trials of Zertane have been conducted outside of the United States to evaluate the safety and efficacy of the product candidate for the treatment of PE. Adverse events observed in these clinical trials have primarily involved gastrointestinal disorders, such as nausea, and central nervous system disorders, such as vertigo, dizziness, drowsiness and headaches. These events have not been reported to be severe and were observed to be reversible after stopping or delaying treatment. Formulation development, stability studies and analytical work has been completed for Zertane-ED, but no clinical trials for the product candidate have been conducted to date. We expect that undesirable side effects of Zertane-ED will include those observed for Zertane as well as those commonly observed for PDE-5 inhibitors, such as headaches, dizziness, flushing, dyspepsia and nasal congestion.

Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other regulatory authorities. Further, if Zertane receives marketing approval and we or others identify undesirable side effects caused by the product (or any other similar product) after the approval, or if drug abuse is determined to be a significant problem with an approved product, a number of potentially significant negative consequences could result, including:

•

regulatory authorities may withdraw or limit their approval of the product;

•

regulatory authorities may require the addition of labeling statements, such as a “boxed” warning or a contraindication;

•

we may be required to change the way the product is distributed or administered, conduct additional clinical trials or change the labeling of the product;

•

we may decide to remove the products from the marketplace;

•

we could be sued and held liable for injury caused to individuals exposed to or taking our product candidates; and

•

our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of the affected product candidate and could substantially increase the costs of commercializing our product candidates and significantly impact our ability to successfully commercialize our product candidates and generate revenues.

Our future growth depends, in part, on our ability to penetrate foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties.

Our future profitability will depend, in part, on our ability to commercialize Zertane in foreign markets for which we intend to rely on collaboration with third parties. If we commercialize Zertane in foreign markets, we would be subject to additional risks and uncertainties, including:

•

our inability to directly control commercial activities because we are relying on third parties

•

the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements;

•

different medical practices and customs in foreign countries affecting acceptance in the marketplace;

•

import or export licensing requirements;

•

longer accounts receivable collection times;

•

longer lead times for shipping;

•

language barriers for technical training;

•

reduced protection of intellectual property rights in some foreign countries, and related prevalence of generic alternatives to therapeutics;

•

foreign currency exchange rate fluctuations;

•

our customers’ ability to obtain reimbursement for Zertane in foreign markets; and

•

the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.

Foreign sales of Zertane could also be adversely affected by the imposition of governmental controls, political and economic instability, trade restrictions and changes in tariffs.

We may use hazardous chemicals and biological materials in our business. Any claims relating to improper handling, storage or disposal of these materials could be time consuming and costly.

Our research and development processes may involve the controlled use of hazardous materials, including chemicals and biological materials. We cannot eliminate the risk of accidental contamination or discharge and any resultant injury from these materials. We may be sued for any injury or contamination that results from our use or the use by third parties of these materials, and our liability may exceed any insurance coverage and our total assets. Federal, state and local laws and regulations govern the use, manufacture, storage, handling and disposal of these hazardous materials and specified waste products, as well as the discharge of pollutants into the environment and human health and safety matters. Compliance with environmental laws and regulations may be expensive and may impair our research and development efforts. If we fail to comply with these requirements, we could incur substantial costs, including civil or criminal fines and penalties, clean-up costs or capital expenditures for control equipment or operational changes necessary to achieve and maintain compliance. In addition, we cannot predict the impact on our business of new or amended environmental laws or regulations or any changes in the way existing and future laws and regulations are interpreted and enforced.

Our product development programs for candidates other than Zertane may require substantial financial resources and may ultimately be unsuccessful.

The success of our business depends primarily upon our ability to identify, develop and commercialize products to treat PE and/or ED. In addition to the development of Zertane, we may pursue development of our other development programs, including Zertane-ED. None of our other potential product candidates has commenced any clinical trials, and there are a number of FDA requirements that we must satisfy before we can commence clinical trials. Satisfaction of these requirements will entail substantial time, effort and financial resources. We may never satisfy these requirements. Any time, effort and financial resources we expend on our other development programs may adversely affect our ability to continue development and commercialization of Zertane, and we may never commence clinical trials of such development programs despite expending significant resources in pursuit of their development. If we do commence clinical trials of our other potential product candidates, such product candidates may never be approved by the FDA. If any of these events occur, we may be forced to abandon our development efforts for a program or programs, which would have a material adverse effect on our business and could potentially cause us to cease operations.

We may fail to receive favorable clinical results related to the RedoxSYS System, and even if we were to receive favorable clinical results, we may still fail to receive the necessary clearances or approvals to market the RedoxSYS System.

We are investing in the research and development of the RedoxSYS System. To commercialize, we are required to undertake time-consuming and costly development activities, including clinical trials for which the outcome is uncertain. Full clinical trials have not been completed for the RedoxSYS System as it is currently configured. Product candidates that appear promising during early development and preclinical studies may, nonetheless, fail to demonstrate the results needed to support regulatory approval or commercial viability. As such, clinical trials involve inherent risks including the possibility of demonstrating lack of effectiveness, safety concerns, or inability to demonstrate a clinical benefit with available company and partner resources. Even if we were to receive favorable clinical results, we may still fail to obtain the necessary FDA clearance and approvals. Any such failure, or any material delay in obtaining the necessary clearance or approvals, could materially adversely affect our business, financial condition and results of operations.

The regulatory clearance or approval process is expensive, time consuming and uncertain, and the failure to obtain and maintain required clearances or approvals could prevent us from commercializing the RedoxSYS System.

The RedoxSYS System is subject to 510(k) clearance or pre-market approval by the FDA prior to its marketing for commercial use in the United States, and to any approvals required by foreign governmental entities prior to its marketing outside the United States. In addition, any changes or modifications to a device that has received regulatory clearance or approval that could significantly affect its safety or effectiveness, or would constitute a major change in its intended use, may require the submission of a new application for 510(k) clearance, pre-market approval, or foreign regulatory approvals. The 510(k) clearance and pre-market approval processes, as well as the process of obtaining foreign approvals, can be expensive, time consuming and uncertain. It generally takes from four to twelve months from submission to obtain 510(k) clearance, and from one to three years from submission to obtain pre-market approval; however, it may take longer, and 510(k) clearance or pre-market approval may never be obtained. We have limited experience in filing FDA applications for 510(k) clearance and pre-market approval. In addition, we are required to continue to comply with applicable FDA and other regulatory requirements even after obtaining clearance or approval. There can be no assurance that we will obtain or maintain any required clearance or approval on a timely basis, or at all. Any failure to obtain or any material delay in obtaining FDA clearance or any failure to maintain compliance with FDA regulatory requirements could harm our business, financial condition and results of operations.

Our financial results will depend on the acceptance among hospitals, third-party payors and the medical community of the RedoxSYS System.

Our future success depends on the acceptance by our target customers, third-party payors and the medical community that the RedoxSYS System is a reliable, accurate and cost-effective solution. Our business success depends on our ability to convince our target customers to replace their current testing method with the RedoxSYS System. Many factors may affect the market acceptance and commercial success of the RedoxSYS System, including:

•

our ability convince our potential customers of the advantages and economic value of the RedoxSYS System over existing technologies and products;

•

the relative convenience and ease of testing of the RedoxSYS System over existing technologies and products;

•

the introduction of new technologies and competing products that may make the RedoxSYS System a less attractive solution for our target customers;

•

our success in training medical personnel on the proper use of the RedoxSYS System;

•

the willingness of third-party payors to reimburse our target customers that adopt the

•

RedoxSYS System;

•

the acceptance in the medical community of the RedoxSYS System;

•

the extent and success of our marketing and sales efforts; and

•

general economic conditions

If third-party payors do not reimburse our customers for the use of the RedoxSYS System or if reimbursement levels are set too low for us to sell the RedoxSYS System at a profit, our ability to sell the RedoxSYS System and our results of operations will be harmed.

Even if a diagnostic product candidate is approved and reaches the market, the product may not achieve physician, hospital, or laboratory acceptance, or it may not obtain adequate reimbursement from third party payors. We expect to sell the RedoxSYS System to target customers substantially all of whom receive reimbursement for the health care services they provide to their patients from third-party payors, such as Medicare, Medicaid, other domestic and foreign government programs, private insurance plans and managed care programs. Reimbursement decisions by particular third-party payors depend upon a number of factors, including each third-party payor’s determination that use of a product is:

•

a covered benefit under its health plan;

•

appropriate and medically necessary for the specific indication;

•

cost effective; and

•

neither experimental nor investigational.

Third-party payors may deny reimbursement for covered products if they determine that a medical product was not used in accordance with cost-effective diagnosis methods, as determined by the third-party payor, or was used for an unapproved indication. Third-party payors also may refuse to reimburse for procedures and devices deemed to be experimental.

Obtaining coverage and reimbursement approval for a product from each government or third- party payor is a time consuming and costly process that could require us to provide supporting scientific, clinical and cost-effectiveness data for the use of our potential product to each government or third-party payor. We may not be able to provide data sufficient to gain acceptance with respect to coverage and reimbursement. In addition, eligibility for coverage does not imply that any product will be covered and reimbursed in all cases or reimbursed at a rate that allows our potential customers to make a profit or even cover their costs.

Third-party payors are increasingly attempting to contain health care costs by limiting both coverage and the level of reimbursement for medical products and services. Increasingly, Medicare, Medicaid and other third-party payors are challenging the prices charged for medical services, including clinical diagnostic tests. Levels of reimbursement may decrease in the future, and future legislation, regulation or reimbursement policies of third-party payors may adversely affect the demand for and reimbursement available for the RedoxSYS System, which in turn, could negatively impact pricing. If our customers are not adequately reimbursed for the RedoxSYS System, they may reduce or discontinue purchases of the RedoxSYS System, which would result in a significant shortfall in achieving revenue expectations for the RedoxSYS System.

Manufacturing risks and inefficiencies may adversely affect our ability to produce the RedoxSYS System.

We expect to engage third parties to manufacture components of the RedoxSYS System in sufficient quantities and on a timely basis, while maintaining product quality, acceptable manufacturing costs and complying with regulatory requirements, such as quality system regulations. In determining the required quantities of the RedoxSYS System and the manufacturing schedule, we must make significant judgments and estimates based on inventory levels, current market trends and other related factors. Because of the inherent nature of estimates and our limited experience in marketing the RedoxSYS System, there could be significant differences between our estimates and the actual amounts of product we require. If we do not secure collaborations with manufacturing and development partners to enable to production scale of the RedoxSYS System, we may not be successful in commercializing the RedoxSYS System in the event we receive regulatory approval.

Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured these components ourselves, including:

•

reliance on third parties for regulatory compliance and quality assurance;

•

possible breaches of manufacturing agreements by the third parties because of factors beyond our control;

•

possible regulatory violations or manufacturing problems experienced by our suppliers; and

•

possible termination or non-renewal of agreements by third parties, based on their own business priorities, at times that are costly or inconvenient for us.

We may not be able to meet the demand for the RedoxSYS System if one or more of these third-party manufacturers is not able to supply us with the necessary components that meet our specifications. It may be difficult to find alternate suppliers in a timely manner and on terms acceptable to us.

Third-party manufacturers we engage and our potential customers are subject to various governmental regulations, and we may incur significant expenses to comply with, and experience delays in our product commercialization as a result of these regulations.

The manufacturing processes and facilities of third-party manufacturers we engage are required to comply with the federal Quality System Regulation, or QSR, which covers procedures and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage and shipping of devices. The FDA enforces the QSR through periodic unannounced inspections of manufacturing facilities. Any inspection by the FDA could lead to additional compliance requests that could cause delays in our product commercialization. Failure to comply with applicable FDA requirements, or later discovery of previously unknown problems with the manufacturing processes and facilities of third-party manufacturers we engage, including the failure to take satisfactory corrective actions in response to an adverse QSR inspection, can result in, among other things:

•

administrative or judicially imposed sanctions;

•

injunctions or the imposition of civil penalties;

•

recall or seizure of the product in question;

•

total or partial suspension of production or distribution;

•

the FDA’s refusal to grant pending future clearance or pre-market approval;

•

withdrawal or suspension of marketing clearances or approvals;

•

clinical holds;

•

warning letters;

•

refusal to permit the export of the product in question; and

•

criminal prosecution.

Any of these actions, in combination or alone, could prevent us from marketing, distributing or selling the RedoxSYS System and would likely harm our business.

In addition, a product defect or regulatory violation could lead to a government-mandated or voluntary recall by us. We believe the FDA would request that we initiate a voluntary recall if a product was defective or presented a risk of injury or gross deception. Regulatory agencies in other countries have similar authority to recall devices because of material deficiencies or defects in design or manufacture that could endanger health. Any recall would divert our management attention and financial resources, expose us to product liability or other claims, and harm our reputation with customers.

We have limited experience in sales and marketing and may be unable to successfully commercialize the RedoxSYS System

We have limited marketing, sales and distribution experience and capabilities. Our ability to achieve profitability depends on attracting customers for the RedoxSYS System and building brand loyalty. To successfully perform sales, marketing, distribution and customer support functions, we will face a number of risks, including:

•

our ability to attract and retain skilled support team, marketing staff and sales force necessary to commercialize and gain market acceptance for the RedoxSYS System;

•

the ability of our sales and marketing team to identify and penetrate the potential customer base; and

•

the difficulty of establishing brand recognition and loyalty for the RedoxSYS System.

In addition, we may seek to enlist one or more third parties to assist with sales, distribution and customer support globally or in certain regions of the world. If we do seek to enter into these arrangements, we may not be successful in attracting desirable sales and distribution partners, or we may not be able to enter into these arrangements on favorable terms, or at all. If our sales and marketing efforts, or those of any third-party sales and distribution partners, are not successful, the RedoxSYS System may not gain market acceptance, which would materially impact our business and operations.

We will be subject to various federal and state laws pertaining to health care fraud and abuse, including anti-kickback, self-referral, false claims and fraud laws, and any violations by us of such laws could result in fines or other penalties.

Our anticipated relationship with healthcare providers and institutions are subject to various federal and state laws intended to prevent health care fraud and abuse. The federal anti-kickback statute prohibits the knowing offer, receipt or payment of remuneration in exchange for or to induce the referral of patients or the use of products or services that would be paid for in whole or in part by Medicare, Medicaid or other federal health care programs. Remuneration has been broadly defined to include anything of value, including cash, improper discounts, and free or reduced price items and services. Many states have similar laws that apply their state health care programs as well as private payors. Violations of the anti-kickback laws can result in exclusion from federal health care programs and substantial civil and criminal penalties.

The federal False Claims Act, or FCA, imposes liability on persons who, among other things, present or cause to be presented false or fraudulent claims for payment by a federal health care program. The FCA has been used to prosecute persons submitting claims for payment that are inaccurate or fraudulent, that are for services not provided as claimed, or for services that are not medically necessary. The FCA includes a whistleblower provision that allows individuals to bring actions on behalf of the federal government and share a portion of the recovery of successful claims. If our marketing or other arrangements were determine to violate anti-kickback or related laws, including the FCA, then our anticipated revenues could be adversely affected, which would likely have a material adverse effect on our business, financial conditions and results of operations.

If the RedoxSYS System does not perform as expected or the reliability of the technology on which the RedoxSYS System is based is questioned, our operating results and business will suffer.

Our success depends on the market’s confidence that we can provide reliable, high-quality diagnostics product. We believe that customers in our target markets are likely to be particularly sensitive to product defects and errors. As a result, our reputation and the public image of our product or technologies will be impaired if the RedoxSYS System fails to perform as expected. Although the RedoxSYS System is designed to be user-friendly, the functions it performs are quite complex, and the RedoxSYS System may develop or contain undetected defects or errors. If we experience a sustained material defect or error, this could result in loss or delay of anticipated revenues, delayed market acceptance, damaged reputation, diversion of development and management resources, legal claims, increased insurance costs or increased service and warranty costs, any of which could materially harm our business.

The development, manufacture and sale of diagnostic products involve inherent risks of adverse side effects or reactions that can cause bodily injury or even death. Any product we succeed in commercializing could adversely affect consumers even after obtaining regulatory approval and, if so, we could be required to withdraw from the market or be subject to administrative or other proceedings. As we are not now manufacturing, marketing or distributing diagnostics, we have elected not to obtain product liability insurance at the current time. We expect to obtain clinical trial liability coverage for any human clinical trials, and appropriate product liability insurance coverage for any product that receives regulatory approval and is licensed to collaborators, if any. The amount, nature and pricing of such insurance coverage will likely vary due to a number of factors. We may not be able to obtain sufficient insurance coverage to address our exposure to product recall or liability actions, or the cost of that coverage may be such that we will be limited in the types or amount of coverage we can obtain.

We face intense competition from established and new companies in the in-vitro diagnostics field.

We compete with companies that design, manufacture and market already-existing and new in-vitro diagnostics systems and tests. We anticipate that we will face increased competition in the future as new companies enter the market with new technologies and our competitors improve their current products. One or more of our competitors may offer technology superior to ours and render our technology obsolete or uneconomical. Most of our current competitors, as well as many of our potential competitors, have greater name recognition, more substantial intellectual property portfolios, longer operating histories, significantly greater resources to invest in new technologies, more substantial experience in new product development, greater regulatory expertise, more extensive manufacturing capabilities and the distribution channels to deliver products to customers. If we are not able to compete successfully, we may not generate sufficient revenue to become profitable.

We may be unsuccessful in our long-term goal of expanding sales of the RedoxSYS System outside the United States.

Assuming we receive the applicable regulatory approvals, we intend to market the RedoxSYS System outside the United States through third-party distributors. These distributors may not commit the necessary resources to market and sell the RedoxSYS System to the level of our expectations. If distributors do not perform adequately or in compliance with applicable laws and regulations in particular geographic areas, or we are unable to locate distributors in particular geographic areas, our ability to realize long-term international revenue potential would be materially adversely affected.

In order to market the RedoxSYS System in the European Union and many other foreign jurisdictions, we, or our distributors or partners, must obtain separate regulatory approvals and comply with numerous and varying regulatory requirements of other countries regarding safety and efficacy and governing, among other things, clinical studies and commercial sales and distribution of the RedoxSYS System. The approval procedure varies among countries and can involve additional testing. The regulatory approval process outside the United States may include all of the risks associated with obtaining FDA approval, as well as additional risks. In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can be approved for sale in that country. We may not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all.

Intellectual Property Risks Related to Our Business

Our ability to compete may decline if we do not adequately protect our proprietary rights.

Our commercial success depends on obtaining and maintaining proprietary rights to our product candidates and compounds for the treatment of sexual dysfunctions and devices and methods for measurement of ORP, as well as successfully defending these rights against third-party challenges. We will only be able to protect our product candidates, compounds, devices, and their uses from unauthorized use by third parties to the extent that valid and enforceable patents, or effectively protected trade secrets, cover them. Our ability to obtain patent protection for our product candidates, compounds, and devices is uncertain due to a number of factors, including:

•

we may not have been the first to make the inventions covered by pending patent applications or issued patents;

•

we may not have been the first to file patent applications for our product candidates, the compositions, or the devices we developed or for their uses;

•

others may independently develop identical, similar or alternative products, compositions or devices and uses thereof;

•

our disclosures in patent applications may not be sufficient to meet the statutory requirements for patentability;

•

any or all of our pending patent applications may not result in issued patents;

•

we may not seek or obtain patent protection in countries that may eventually provide us a significant business opportunity;

•

any patents issued to us may not provide a basis for commercially viable products, may not provide any competitive advantages, or may be successfully challenged by third parties;

•

our compositions, devices and methods may not be patentable;

•

others may design around our patent claims to produce competitive products which fall outside of the scope of our patents; or

•

others may identify prior art or other bases which could invalidate our patents.

Even if we have or obtain patents covering our product candidates, compositions, or devices, we may still be barred from making, using and selling our product candidates, devices, or technologies because of the patent rights of others. Others may have filed, and in the future may file, patent applications covering compositions, devices, or products that are similar or identical to ours. There are many issued U.S. and foreign patents relating to chemical compounds, therapeutic products, diagnostic devices, and some of these relate to products we intend to commercialize. Numerous U.S. and foreign issued patents and pending patent applications owned by others exist in the sexual dysfunction treatment field and in the diagnostic field in which we are developing products. These could materially affect our ability to develop our product candidates or sell our products if approved. Because patent applications can take many years to issue, there may be currently pending applications unknown to us that may later result in issued patents that our product candidates, compositions, or devices may infringe. These patent applications may have priority over patent applications filed by us.

Obtaining and maintaining a patent portfolio entails significant expense and resources. Part of the expense includes periodic maintenance fees, renewal fees, annuity fees, various other governmental fees on patents and/or applications due in several stages over the lifetime of patents and/or applications, as well as the cost associated with complying with numerous procedural provisions during the patent application process. We may or may not choose to pursue or maintain protection for particular inventions. In addition, there are situations in which failure to make certain payments or noncompliance with certain requirements in the patent process can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. If we choose to forgo patent protection or allow a patent application or patent to lapse purposefully or inadvertently, our competitive position could suffer.

Legal actions to enforce our patent rights can be expensive and may involve the diversion of significant management time. In addition, these legal actions could be unsuccessful and could also result in the invalidation of our patents or a finding that they are unenforceable. We may or may not choose to pursue litigation or other actions against those that have infringed on our patents, or used them without authorization, due to the associated expense and time commitment of monitoring these activities. If we fail to protect or to enforce our intellectual property rights successfully, our competitive position could suffer, which could harm our results of operations.

Pharmaceutical and medical device patents and patent applications involve highly complex legal and factual questions, which, if determined adversely to us, could negatively impact our patent position.

The patent positions of pharmaceutical and medical device companies can be highly uncertain and involve complex legal and factual questions. The interpretation and breadth of claims allowed in some patents covering pharmaceutical compositions may be uncertain and difficult to determine, and are often affected materially by the facts and circumstances that pertain to the patented compositions and the related patent claims. The standards of the United States Patent and Trademark Office, or USPTO, are sometimes uncertain and could change in the future. Consequently, the issuance and scope of patents cannot be predicted with certainty. Patents, if issued, may be challenged, invalidated or circumvented. U.S. patents and patent applications may also be subject to interference proceedings, and U.S. patents may be subject to reexamination proceedings, post-grant review and/or inter partes review in the USPTO. Foreign patents may be subject also to opposition or comparable proceedings in the corresponding foreign patent office, which could result in either loss of the patent or denial of the patent application or loss or reduction in the scope of one or more of the claims of the patent or patent application. In addition, such interference, reexamination, post-grant review, inter partes review and opposition proceedings may be costly. Accordingly, rights under any issued patents may not provide us with sufficient protection against competitive products or processes.

In addition, changes in or different interpretations of patent laws in the United States and foreign countries may permit others to use our discoveries or to develop and commercialize our technology and products without providing any compensation to us, or may limit the number of patents or claims we can obtain. The laws of some countries do not protect intellectual property rights to the same extent as U.S. laws and those countries may lack adequate rules and procedures for defending our intellectual property rights.

If we fail to obtain and maintain patent protection and trade secret protection of our product candidates, we could lose our competitive advantage and competition we face would increase, reducing any potential revenues and adversely affecting our ability to attain or maintain profitability.

Developments in patent law could have a negative impact on our business.

From time to time, the United States Supreme Court, or the Supreme Court, other federal courts, the United States Congress or the USPTO may change the standards of patentability and any such changes could have a negative impact on our business.

In addition, the Leahy-Smith America Invents Act, or the America Invents Act, which was signed into law in 2011, includes a number of significant changes to U.S. patent law. These changes include a transition from a “first-to-invent” system to a “first-to-file” system, changes to the way issued patents are challenged, and changes to the way patent applications are disputed during the examination process. These changes may favor larger and more established companies that have greater resources to devote to patent application filing and prosecution. The USPTO has developed new and untested regulations and procedures to govern the full implementation of the America Invents Act, and many of the substantive changes to patent law associated with the America Invents Act, and, in particular, the first-to-file provisions, became effective on March 16, 2013. Substantive changes to patent law associated with the America Invents Act may affect our ability to obtain patents, and if obtained, to enforce or defend them. Accordingly, it is not clear what, if any, impact the America Invents Act will ultimately have on the cost of prosecuting our patent applications, our ability to obtain patents based on our discoveries and our ability to enforce or defend any patents that may issue from our patent applications, all of which could have a material adverse effect on our business.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

In addition to patent protection, because we operate in the highly technical field of drug discovery, development of therapies and medical devices, we rely in part on trade secret protection in order to protect our proprietary technology and processes. However, trade secrets are difficult to protect. We expect to enter into confidentiality and intellectual property assignment agreements with our employees, consultants, outside scientific collaborators, sponsored researchers, and other advisors. These agreements generally require that the other party keep confidential and not disclose to third parties all confidential information developed by the party or made known to the party by us during the course of the party’s relationship with us. These agreements also generally provide that inventions conceived by the party in the course of rendering services to us will be our exclusive property. However, these agreements may not be honored and may not effectively assign intellectual property rights to us.

In addition to contractual measures, we try to protect the confidential nature of our proprietary information using physical and technological security measures. Such measures may not, for example, in the case of misappropriation of a trade secret by an employee or third party with authorized access, provide adequate protection for our proprietary information. Our security measures may not prevent an employee or consultant from misappropriating our trade secrets and providing them to a competitor, and recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive, and time-consuming, and the outcome is unpredictable. In addition, courts outside the United States may be less willing to protect trade secrets. Trade secrets may be independently developed by others in a manner that could prevent legal recourse by us. If any of our confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such information was independently developed by a competitor, our competitive position could be harmed.

We may not be able to enforce our intellectual property rights throughout the world.

The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. The legal systems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property protection, especially those relating to pharmaceuticals. This could make it difficult for us to stop the infringement of some of our patents, if obtained, or the misappropriation of our other intellectual property rights. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, many countries limit the enforceability of patents against third parties, including government agencies or government contractors. In these countries, patents may provide limited or no benefit. Patent protection must ultimately be sought on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes. Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries.

Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate. In addition, changes in the law and legal decisions by courts in the United States and foreign countries may affect our ability to obtain adequate protection for our technology and the enforcement of intellectual property.

Third parties may assert ownership or commercial rights to inventions we develop.

Third parties may in the future make claims challenging the inventorship or ownership of our intellectual property. We have written agreements with collaborators that provide for the ownership of intellectual property arising from our collaborations. These agreements provide that we must negotiate certain commercial rights with collaborators with respect to joint inventions or inventions made by our collaborators that arise from the results of the collaboration. In some instances, there may not be adequate written provisions to address clearly the resolution of intellectual property rights that may arise from a collaboration. If we cannot successfully negotiate sufficient ownership and commercial rights to the inventions that result from our use of a third-party collaborator’s materials where required, or if disputes otherwise arise with respect to the intellectual property developed with the use of a collaborator’s samples, we may be limited in our ability to capitalize on the market potential of these inventions. In addition, we may face claims by third parties that our agreements with employees, contractors, or consultants obligating them to assign intellectual property to us are ineffective, or in conflict with prior or competing contractual obligations of assignment, which could result in ownership disputes regarding intellectual property we have developed or will develop and interfere with our ability to capture the commercial value of such inventions. Litigation may be necessary to resolve an ownership dispute, and if we are not successful, we may be precluded from using certain intellectual property, or may lose our exclusive rights in that intellectual property. Either outcome could have an adverse impact on our business.

Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.

We employ individuals who were previously employed at universities or other biopharmaceutical or medical device companies, including our competitors or potential competitors. Although we try to ensure that our employees and consultants do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of a former employer or other third parties. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

A dispute concerning the infringement or misappropriation of our proprietary rights or the proprietary rights of others could be time consuming and costly, and an unfavorable outcome could harm our business.

There is significant litigation in the pharmaceutical and medical device industries regarding patent and other intellectual property rights. While we are not currently subject to any pending intellectual property litigation, and are not aware of any such threatened litigation, we may be exposed to future litigation by third parties based on

claims that our product candidates, devices, technologies or activities infringe the intellectual property rights of others. If our development activities are found to infringe any such patents, we may have to pay significant damages or seek licenses to such patents. A patentee could prevent us from using the patented drugs, compositions or devices. We may need to resort to litigation to enforce a patent issued to us, to protect our trade secrets, or to determine the scope and validity of third-party proprietary rights. From time to time, we may hire scientific personnel or consultants formerly employed by other companies involved in one or more areas similar to the activities conducted by us. Either we or these individuals may be subject to allegations of trade secret misappropriation or other similar claims as a result of prior affiliations. If we become involved in litigation, it could consume a substantial portion of our managerial and financial resources, regardless of whether we win or lose. We may not be able to afford the costs of litigation. Any adverse ruling or perception of an adverse ruling in defending ourselves against these claims could have a material adverse impact on our cash position and stock price. Any legal action against us or our collaborators could lead to:

•

payment of damages, potentially treble damages, if we are found to have willfully infringed a party’s patent rights;

•

injunctive or other equitable relief that may effectively block our ability to further develop, commercialize, and sell products; or

•

us or our collaborators having to enter into license arrangements that may not be available on commercially acceptable terms, if at all, all of which could have a material adverse impact on our cash position and business and financial condition. As a result, we could be prevented from commercializing current or future product candidates.

Risks Related to Our Organization, Structure and Operation

Ampio controls us, including having the ability to control the election of our directors, and its interests may conflict with or differ from your interests as stockholders.

Ampio owns 81.5% of our outstanding common stock as of the closing of the Merger. If Ampio were to choose so, as a result of its stock ownership, Ampio may be able to influence our management and affairs and control all matters submitted to our stockholders for approval, including the election of directors and approval of any merger, consolidation, or sale of all or substantially all of our assets. This concentration of ownership may have the effect of delaying or preventing a change in control of our company and might affect the market price of our common stock. This control may delay, deter or prevent acts that would be favored by our other stockholders, as the interests of Ampio may not always coincide with our interests or the interests of our other stockholders. For example, Ampio may seek to cause us to take courses of action that, in its judgment, could enhance its investment in us, but which might involve risks to our other stockholders or adversely affect us or our other stockholders.

We may be unable to achieve some or all of the benefits that we expect to achieve from our separation from Ampio.

As a stand-alone, independent public company, we believe that our business will benefit from, among other things, allowing our management to design and implement corporate policies and strategies that are based primarily on the characteristics of our business, allowing us to focus our financial resources wholly on our own operations and implement and maintain a capital structure designed to meet our own specific needs. However, as a result of our separation from Ampio there is a risk that we may be more susceptible to market fluctuations and other adverse events than we would have been were we still a part of Ampio. We may not be able to achieve some or all of the benefits that we expect to achieve as a stand-alone healthcare company or such benefits may be delayed or may not occur at all. For example, there can be no assurance that analysts and investors will place a greater value on our company as a stand-alone healthcare company than on our business as a part of Ampio.

Our historical financial information as a business conducted by Ampio may not be representative of our results as an independent public company.

The historical financial information included herein does not necessarily reflect what our financial position, operating results or cash flows would have been had we been an independent entity during the historical periods presented. The historical costs and expenses reflected in our financial statements include amounts for certain corporate functions historically provided by Ampio, including costs of finance and other administrative services, and income taxes. These expense allocations were developed on the basis of what we and Ampio considered to be reasonable prices for the utilization of services provided or the benefits received by us. The historical financial information in our audited financial statements may not be indicative of what our results of operations, financial position, changes in equity and cash flows would have been had we been a separate stand-alone entity during the periods presented or will be in the future. We have not made adjustments to reflect many significant changes that will occur in our cost structure, funding and operations as a result of our separation from Ampio, including changes in our employee base, changes in our tax structure, potential increased costs associated with reduced economies of scale and increased costs associated with being a publicly traded, stand-alone company, such as audit fees, directors and officers insurance costs and compliance costs, nor have we made offsetting adjustments to reflect the benefits of this offering, as these factors are presently difficult to quantify.

We may have received better terms from unaffiliated third parties than the terms we received in our agreements with Ampio.

The agreements related to our separation from Ampio, including the assignment and assumption agreement, services agreement and the other agreements, were negotiated in the context of our separation from Ampio while we were still part of Ampio and, accordingly, may not reflect terms that would have resulted from arm’s-length negotiations among unaffiliated third parties. The terms of the agreements we negotiated in the context of our separation related to, among other things, allocation of assets, liabilities, rights, indemnifications and other obligations among Ampio and us. We may have received better terms from third parties because third parties may have competed with each other to win our business. Our sole director is also a member of the Ampio board.

Our ability to operate our business effectively may suffer if we or Ampio terminate our services agreement, or if we are unable to establish on a cost-effective basis our own administrative and other support functions in order to operate as a stand-alone company after the expiration or termination of our services agreement with Ampio.

Prior to the Merger, we have relied on administrative and other resources of Ampio to operate our business. We have entered into a services agreement to retain the ability for specified periods to use certain Ampio resources. We may elect to continue this agreement for an indefinite period of time. Any decision by us to terminate this agreement would be approved by disinterested members of our management and board of directors under our procedures regarding related party transactions. After the termination of this agreement, we will need to create our own administrative and other support systems or contract with third parties to replace Ampio’s services. These services may not be provided at the same level, and we may not be able to obtain the same benefits that we received prior to the separation. These services may not be sufficient to meet our needs, and after our agreement with Ampio is terminated, we may not be able to replace these services at all or obtain these services at prices and on terms as favorable as we currently have with Ampio. Any failure or significant downtime in our own administrative systems or in Ampio’s administrative systems during the transitional period could result in unexpected costs, impact our results or prevent us from paying our suppliers or employees and performing other administrative services on a timely basis.

Third parties may seek to hold us responsible for liabilities of Ampio that we did not assume in our agreements.

In connection with our separation from Ampio, Ampio has generally agreed to retain all liabilities that did not historically arise from our business. Third parties may seek to hold us responsible for Ampio’s retained liabilities. Under our agreements with Ampio, Ampio has agreed to indemnify us for claims and losses relating to these retained liabilities. However, if those liabilities are significant and we are ultimately liable for them, we cannot assure you that we will be able to recover the full amount of our losses from Ampio.

Any disputes that arise between us and Ampio with respect to our past and ongoing relationships could harm our business operations.

Disputes may arise between Ampio and us in a number of areas relating to our past and ongoing relationships, including:

•

intellectual property, technology and business matters, including failure to make required technology transfers and failure to comply with non-compete provisions applicable to Ampio and us;

•

labor, tax, employee benefit, indemnification and other matters arising from our separation from Ampio;

•

distribution and supply obligations;

•

employee retention and recruiting;

•

business combinations involving us;

•

sales or distributions by Ampio of all or any portion of its ownership interest in us;

•

the nature, quality and pricing of transitional services Ampio has agreed to provide us; and

•

business opportunities that may be attractive to both Ampio and us.

We may not be able to resolve any potential conflicts, and even if we do, the resolution may be less favorable than if we were dealing with an unaffiliated party.

The agreements we have entered into with Ampio may be amended upon agreement between the parties. While we are controlled by Ampio, Ampio may be able to require us to agree to amendments to these agreements that may be less favorable to us than the original terms of the agreements.

Some of our directors and executive officers may have conflicts of interest because of their ownership of Ampio common stock, options to acquire Ampio common stock and positions with Ampio.

Some of our director and executive officers own Ampio common stock and options to purchase Ampio common stock. In addition, our sole director is also a director of Ampio. Ownership of Ampio common stock and options to purchase Ampio common stock by our director and officers and the presence of a director of Ampio on our board of directors could create, or appear to create, conflicts of interest with respect to matters involving both us and Ampio. For example, corporate opportunities may arise that are applicable or complementary to both of our businesses and that each business would be free to pursue, such as the potential acquisition of a particular business or technology. However, we do not believe that Ampio intends to acquire businesses that are focused on urological disorders. We have not established at this time any procedural mechanisms to address actual or perceived conflicts of interest of these directors and officers and expect that our board of directors, in the exercise of its fiduciary duties, will determine how to address any actual or perceived conflicts of interest on a case-by-case basis. If any corporate opportunity arises and if our directors and officers do not pursue it on our behalf, we may not become aware of, and may potentially lose, a significant business opportunity.

We will need to develop and expand our company, and we may encounter difficulties in managing this development and expansion, which could disrupt our operations.

As of the date of April 16, 2015, we have seven full-time employee, and in connection with becoming a public company, we expect to increase our number of employees and the scope of our operations. To manage our anticipated development and expansion, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Also, our management may need to divert a disproportionate amount of its attention away from its day-to-day activities and devote a substantial amount of time to managing these development activities. Due to our limited resources, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. This may result in weaknesses in our infrastructure, give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. The physical expansion of our operations may lead to significant costs and may divert financial resources from other projects, such as the development of our product candidates. If our management is unable to effectively manage our expected development and expansion, our expenses may increase more than expected, our ability to generate or increase our revenue could be reduced and we may not be able to implement our business strategy. Our future financial performance and our ability to commercialize our product candidates, if approved, and compete effectively will depend, in part, on our ability to effectively manage the future development and expansion of our company.

We depend on key personnel and attracting qualified management personnel and our business could be harmed if we lose personnel and cannot attract new personnel.

Our success depends to a significant degree upon the technical and management skills of our officers and key personnel, including in particular those of Josh Disbrow, our Chief Executive Officer, and Jarrett Disbrow, our Chief Operating Officer. The loss of the services of any of these individuals would likely have a material adverse effect on us. Our success also will depend upon our ability to attract and retain additional qualified management, marketing, technical, and sales executives and personnel. We do not maintain key person life insurance for any of our officers or key personnel. The loss of any of our key executives, or the failure to attract, integrate, motivate, and retain additional key personnel could have a material adverse effect on our business.

We compete for such personnel against numerous companies, including larger, more established companies with significantly greater financial resources than we possess. There can be no assurance that we will be successful in attracting or retaining such personnel, and the failure to do so could have a material adverse effect on our business, financial condition, and results of operations.

Our employees may engage in misconduct or other improper activities, including violating applicable regulatory standards and requirements or engaging in insider trading, which could significantly harm our business.

We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentional failures to comply with the regulations of the FDA and applicable non-U.S. regulators, provide accurate information to the FDA and applicable non-U.S. regulators, comply with healthcare fraud and abuse laws and regulations in the United States and abroad, report financial information or data accurately or disclose unauthorized activities to us. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee misconduct could also involve the improper use of, including trading on, information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. We have adopted a code of conduct, but it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may be ineffective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.

Product liability and other lawsuits could divert our resources, result in substantial liabilities and reduce the commercial potential of our product candidates.

The risk that we may be sued on product liability claims is inherent in the development and commercialization of pharmaceutical products. Side effects of, or manufacturing defects in, products that we develop which are commercialized by any collaborators could result in the deterioration of a patient’s condition, injury or even death. Once a product is approved for sale and commercialized, the likelihood of product liability lawsuits increases. Claims may be brought by individuals seeking relief for themselves or by individuals or groups seeking to represent a class. These lawsuits may divert our management from pursuing our business strategy and may be costly to defend. In addition, if we are held liable in any of these lawsuits, we may incur substantial liabilities and may be forced to limit or forgo further commercialization of the affected products.

We may be subject to legal or administrative proceedings and litigation other than product liability lawsuits which may be costly to defend and could materially harm our business, financial condition and operations.

Although we expect to maintain general liability and product liability insurance, this insurance may not fully cover potential liabilities. In addition, inability to obtain or maintain sufficient insurance coverage at an acceptable cost or to otherwise protect against potential product or other legal or administrative liability claims could prevent or inhibit the commercial production and sale of any of our product candidates that receive regulatory approval, which could adversely affect our business. Product liability claims could also harm our reputation, which may adversely affect our collaborators’ ability to commercialize our products successfully.

In order to satisfy our obligations as a public company, we will need to hire qualified accounting and financial personnel with appropriate public company experience.

As a public company, we will need to establish and maintain effective disclosure and financial controls and make changes in our corporate governance practices. We will need to hire additional accounting and financial personnel with appropriate public company experience and technical accounting knowledge, and it may be difficult to recruit and maintain such personnel. Even if we are able to hire appropriate personnel, our existing operating expenses and operations will be impacted by the direct costs of their employment and the indirect consequences related to the diversion of management resources from product development efforts.

Our internal computer systems, or those of our third-party contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs.

Despite the implementation of security measures, our internal computer systems and those of our third-party contractors and consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. While we do not believe that we have not experienced any such system failure, accident, or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a loss of clinical trial data for our product candidates could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach results in a loss of or damage to our data or applications or other data or applications relating to our technology or product candidates, or inappropriate disclosure of confidential or proprietary information, we could incur liabilities and the further development of our product candidates could be delayed.

We may acquire businesses or products, or form strategic alliances, in the future, and we may not realize the benefits of such acquisitions.

We may acquire additional businesses or products, form strategic alliances or create joint ventures with third parties that we believe will complement or augment our existing business. If we acquire businesses with promising markets or technologies, we may not be able to realize the benefit of acquiring such businesses if we are unable to successfully integrate them with our existing operations and company culture. We may encounter numerous difficulties in developing, manufacturing and marketing any new products resulting from a strategic alliance or acquisition that delay or prevent us from realizing their expected benefits or enhancing our business. We cannot assure you that, following any such acquisition, we will achieve the expected synergies to justify the transaction.

Risks Related to the Merger and Ownership of Our Common Stock

There is not now, and there may never be, an active, liquid and orderly trading market for our common stock, which may make it difficult for you to sell your shares of our common stock.

There is not now, nor has there been since our inception, any substantial trading activity in our common stock or a market for shares of our common stock, and an active trading market for our shares may never develop or be sustained. As a result, investors in our common stock must bear the economic risk of holding those shares for an indefinite period of time. Although our common stock is quoted on the OTCQB, an over-the-counter quotation system, trading of our common stock is extremely limited and sporadic and at very low volumes. We do not now, and may not in the future, meet the initial listing standards of any national securities exchange, and we presently anticipate that our common stock will continue to be quoted on the OTCQB or another over-the-counter quotation system in the foreseeable future. In those venues, our stockholders may find it difficult to obtain accurate quotations as to the market value of their shares of our common stock, and may find few buyers to purchase their stock and few market makers to support its price. As a result of these and other factors, you may be unable to resell your shares of our common stock at or above the price for which you purchased them, or at all. Further, an inactive market may also impair our ability to raise capital by selling additional equity in the future, and may impair our ability to enter into strategic partnerships or acquire companies or products by using shares of our common stock as consideration.

Our share price is volatile and may be influenced by numerous factors, some of which are beyond our control.

The trading price of our common stock is likely to be highly volatile, and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. In addition to the factors discussed in this “Risk Factors” section and elsewhere in this report, these factors include:

•

the product candidates we seek to pursue, and our ability to obtain rights to develop, commercialize and market those product candidates;

•

our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial;

•

actual or anticipated adverse results or delays in our clinical trials;

•

our failure to commercialize our product candidates, if approved;

•

unanticipated serious safety concerns related to the use of any of our product candidates;

•

adverse regulatory decisions;

•

additions or departures of key scientific or management personnel;

•

changes in laws or regulations applicable to our product candidates, including without limitation clinical trial requirements for approvals;

•

disputes or other developments relating to patents and other proprietary rights and our ability to obtain patent protection for our product candidates;

•

our dependence on third parties, including CROs as well as our potential partners that produce companion diagnostic products;

•

failure to meet or exceed any financial guidance or expectations regarding development milestones that we may provide to the public;

•

actual or anticipated variations in quarterly operating results;

•

failure to meet or exceed the estimates and projections of the investment community;

•

overall performance of the equity markets and other factors that may be unrelated to our operating performance or the operating performance of our competitors, including changes in market valuations of similar companies;

•

conditions or trends in the biotechnology and biopharmaceutical industries;

•

introduction of new products offered by us or our competitors;

•

announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;

•

our ability to maintain an adequate rate of growth and manage such growth;

•

issuances of debt or equity securities;

•

sales of our common stock by us or our stockholders in the future, or the perception that such sales could occur;

•

trading volume of our common stock;

•

ineffectiveness of our internal control over financial reporting or disclosure controls and procedures;

•

general political and economic conditions;

•

effects of natural or man-made catastrophic events; and

•

other events or factors, many of which are beyond our control.

In addition, the stock market in general, and the stocks of small-cap biotechnology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance. The realization of any of the above risks or any of a broad range of other risks, including those described in these “Risk Factors,” could have a dramatic and material adverse impact on the market price of our common stock.

FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.

The Financial Industry Regulatory Authority (FINRA) has adopted rules requiring that, in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative or low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA has indicated its belief that there is a high probability that speculative or low-priced securities will not be suitable for at least some customers. If these FINRA requirements are applicable to us or our securities, they may make it more difficult for broker-dealers to recommend that at least some of their customers buy our common stock, which may limit the ability of our stockholders to buy and sell our common stock and could have an adverse effect on the market for and price of our common stock.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and any trading volume could decline.

Any trading market for our common stock that may develop will depend in part on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on us or our business. If no securities or industry analysts commence coverage of our company, the trading price for our stock would be negatively affected. If securities or industry analysts initiate coverage, and one or more of those analysts downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and any trading volume to decline.

We may have material liabilities that are not discovered until after the closing of the Merger.

As a result of the Merger, the former business plan and management of Rosewind have been abandoned and replaced with the business and management team of Vyrix and Luoxis. Prior to the Merger, there were no relationships or other connections among the businesses or individuals associated with Rosewind and Vyrix and Luoxis. As a result, Rosewind may have material liabilities that are not discovered until after the Merger is completed. The Combined Company could experience losses as a result of any such undisclosed liabilities that are discovered following the Merger, which could materially harm our business and financial condition. Although the Merger Agreement contains customary representations and warranties from Rosewind concerning its assets, liabilities, financial condition and affairs, there may be limited or no recourse against Rosewind’s pre-merger stockholders or principals in the event those representations prove to be untrue. As a result, the stockholders of the Combined Company following the closing of the Merger will bear some, or all, of the risks relating to any such unknown or undisclosed liabilities.

We may be exposed to additional risks as a result of “going public” by means of a merger transaction.

We may be exposed to additional risks because the business of Vyrix and Luoxis has become a public company through a “reverse merger” transaction. There has been increased focus by government agencies on transactions such as the Merger in recent years, and we may be subject to increased scrutiny by the SEC and other government agencies and holders of our securities as a result of the completion of that transaction. Additionally, our “going public” by means of a reverse merger transaction may make it more difficult for us to obtain coverage from securities analysts of major brokerage firms following the Merger because there may be little incentive to those brokerage firms to recommend the purchase of our common stock. The occurrence of any such event could cause our business or stock price to suffer.

Because we became public by means of a “reverse merger,” it may be more difficult to list on a national exchange such as the NASDAQ, NYSE or NYSE Amex.

It may be more difficult to list on a major exchange because we have conducted a reverse merger. In 2011, the Securities and Exchange Commission approved new rules of the three major U.S. listing markets that toughen the standards that companies going public through a reverse merger must meet to become listed on those exchanges. Under the new rules, NASDAQ, NYSE and NYSE Amex will impose more stringent listing requirements for companies that become public through a reverse merger. Specifically, the new rules prohibit a reverse merger company from applying to list on either the NASDAQ, NYSE or NYSE Amex until:

•

the company has completed a one-year “seasoning period” by trading in the U.S. over the counter market or on another regulated U.S. or foreign exchange following the reverse merger, and filed all required reports with the Commission, including audited financial statements; and

•

the company maintains the requisite minimum share price for a sustained period, and for at least 30 of the 60 trading days, immediately prior to its listing application and the exchange’s decision to list.

It is possible for a reverse merger company to be exempt from these special requirements, but only if a listing is in connection with a substantial, firm commitment underwritten public offering.

Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

A certain large stockholder owns a significant percentage of our outstanding capital stock. As of the date of this report, the large stockholder owns approximately 81.5% of our outstanding voting stock. Accordingly, our large stockholder has significant influence over our affairs due to its substantial ownership and has substantial voting power to approve matters requiring the approval of our stockholders. For example, these stockholders will be able to control elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transactions. This concentration of ownership in our large stockholder may prevent or discourage unsolicited acquisition proposals or offers for our common stock that some of our stockholders may believe is in their best interest.

If we issue additional shares of our capital stock in the future, our existing stockholders will be diluted.

Our Articles of Incorporation authorize the issuance of up to 300,000,000 shares of our common stock and up to 5,000,000 shares of preferred stock with the rights, preferences and privileges that our Board of Directors may determine from time to time. Upon the closing of the Merger on April 16, 2015, we issued an aggregate of 154,161,963 shares of our common stock, which equals approximately 88.8% of our currently issued and outstanding capital stock. In addition to capital raising activities, which we expect to continue to pursue in order to raise the funding we will need in order to continue our operations, other possible business and financial uses for our authorized capital stock include, without limitation, future stock splits, acquiring other companies, businesses or

products in exchange for shares of our capital stock, issuing shares of our capital stock to partners or other collaborators in connection with strategic alliances, attracting and retaining employees by the issuance of additional securities under our equity compensation plans, or other transactions and corporate purposes that our Board of Directors deems are in the best interest of our company. Additionally, shares of our capital stock could be used for anti-takeover purposes or to delay or prevent changes in control or our management. Any future issuances of shares of our capital stock may not be made on favorable terms or at all, they may not enhance stockholder value, they may have rights, preferences and privileges that are superior to those of our common stock, and they may have an adverse effect on our business or the trading price of our common stock. The issuance of any additional shares of our common stock will reduce the book value per share and may contribute to a reduction in the market price of the outstanding shares of our common stock. Additionally, any such issuance will reduce the proportionate ownership and voting power of all of our current stockholders.

Sales of a substantial number of shares of our common stock in the public market, or the perception that such sales could occur, could cause our stock price to fall.

If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after the legal restrictions on resale discussed in this report lapse or after those shares become registered for resale pursuant to an effective registration statement, the trading price of our common stock could decline. As of the date of this report, a total of 173,597,365 shares of our common stock are outstanding. Of those shares, only approximately 1.4% are currently freely tradable, without restriction, in the public market. We have agreed to file, as soon as is reasonably practicable, one registration statement to register for resale under the Securities Act as many shares of our common stock held by persons who are not affiliates of Ampio as we determine we can reasonably include with such registration statement. Upon the effectiveness of any such registration statement, or any other registration we could elect to file with respect to any other outstanding shares of our common stock, those shares that become registered would be freely tradable without restriction, except for shares held by our affiliates, and any sales of those shares or any perception in the market that such sales may occur could cause the trading price of our common stock to decline. Additional, 158,522,319 shares subject to the lock-up agreement will become freely tradeable upon expiration of the lock-up agreements. See “Market Price and Dividends on Our Common Stock and Related Shareholder Matters” for further information regarding the lock-up agreements.

In addition, shares of common stock that are reserved for future issuance under our future equity incentive plans will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, Rule 144 and Rule 701 under the Securities Act, and any future registration of such shares under the Securities Act. If these additional shares of common stock are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.

Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our future equity incentive plans or otherwise, could result in dilution of the percentage ownership of our stockholders and could cause our stock price to fall.

We expect that significant additional capital will be needed in the future to continue our planned operations. To raise capital, we may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities or other equity securities in more than one transaction, investors in a prior transaction may be materially diluted by subsequent sales. Additionally, any such sales may result in material dilution to our existing stockholders, and new investors could gain rights, preferences and privileges senior to those of holders of our common stock. Further, any future sales of our common stock by us or resales of our common stock by our existing stockholders could cause the market price of our common stock to decline. Any future grants of options, warrants or other securities exercisable or convertible into our common stock, or the exercise or conversion of such shares, and any sales of such shares in the market, could have an adverse effect on the market price of our common stock.

Some provisions of our charter documents and Colorado law may discourage an acquisition of us by others, even if the acquisition may be beneficial to some of our stockholders.

Provisions in our Articles of Incorporation and Bylaws as in effect upon the closing of the Merger, as well as certain provisions of Colorado law, could make it more difficult for a third-party to acquire us, even if doing so may benefit some of our stockholders. These provisions include the authorization of 5,000,000 shares of “blank check” preferred stock, the rights, preferences and privileges of which may be established and shares of which may be issued by our Board of Directors at its discretion from time to time and without stockholder approval.

Any provision of our Articles of Incorporation or Bylaws or of Colorado law that is applicable to us that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock in the event that a potentially beneficial acquisition is discouraged, and could also affect the price that some investors are willing to pay for our common stock.

The elimination of personal liability against our directors and officers under Colorado law and the existence of indemnification rights held by our directors, officers and employees may result in substantial expenses.

Our Articles of Incorporation and our Bylaws eliminate the personal liability of our directors and officers to us and our stockholders for damages for breach of fiduciary duty as a director or officer to the extent permissible under Colorado law. Further, our Articles of Incorporation and our Bylaws and individual indemnification agreements we intend to enter with each of our directors and executive officers provide that we are obligated to indemnify each of our directors or officers to the fullest extent authorized by the Colorado law and, subject to certain conditions, advance the expenses incurred by any director or officer in defending any action, suit or proceeding prior to its final disposition. Those indemnification obligations could expose us to substantial expenditures to cover the cost of settlement or damage awards against our directors or officers, which we may be unable to afford. Further, those provisions and resulting costs may discourage us or our stockholders from bringing a lawsuit against any of our current or former directors or officers for breaches of their fiduciary duties, even if such actions might otherwise benefit our stockholders.

We do not intend to pay cash dividends on our capital stock in the foreseeable future.

We have never declared or paid any dividends on our common stock and do not anticipate paying any dividends in the foreseeable future. Any future payment of cash dividends in the future would depend on our financial condition, contractual restrictions, solvency tests imposed by applicable corporate laws, results of operations, anticipated cash requirements and other factors and will be at the discretion of the our Board of Directors. Our stockholders should not expect that we will ever pay cash or other dividends on our outstanding capital stock.

Our common stock is subject to the “penny stock” rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock.

The SEC has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

•

that a broker or dealer approve a person’s account for transactions in penny stocks; and

•

the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

•

obtain financial information and investment experience objectives of the person; and

•

make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form sets forth:

•

the basis on which the broker or dealer made the suitability determination; and

•

that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of common stock and cause a decline in the market value of stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our combined financial statements and the related notes and other financial information attached as exhibits to this report. Some of the information contained in this discussion and analysis or set forth elsewhere in this report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note Regarding Forward-Looking Statements” elsewhere in this report. You should review the “Risk Factors” section of this report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

All references to “we,” “us,” “our” and “the combined Vyrix and Luoxis company” in this discussion and analysis refer solely to Vyrix Pharmaceuticals, Inc., a Delaware corporation, or Vyrix, and Luoxis Diagnostics, Inc., a Delaware corporation, or Luoxis, Vyrix, on a combined basis. The Merger is accounted for as a reverse merger and recapitalization, with the combined Vyrix and Luoxis company as the acquirer and Rosewind as the acquired company for financial reporting purposes. As a result, the assets and liabilities and the operations that will be reflected in the historical financial statements prior to the Merger will be those of the combined Vyrix and Luoxis company and will be recorded at the historical cost basis of the combined Vyrix and Luoxis company, and the consolidated financial statements after completion of the Merger will include the assets and liabilities of Rosewind and the combined Vyrix and Luoxis company, the historical operations of the combined Vyrix and Luoxis company and the operations of the combined enterprise of Rosewind and the combined Vyrix and Luoxis company from and after the closing date of the Merger.

Overview

Vyrix was incorporated under the laws of the State of Delaware on November 18, 2013 and was wholly owned by Ampio, immediately prior to the completion of the Merger. Vyrix was previously a carve-out of the sexual dysfunction treatment business, including the late-stage men’s health product candidates, Zertane and Zertane-ED, from Ampio, which was announced in December 2013.

To date, we have financed operations through a combination of private and public grants and contracts, debt and equity financings including the net proceeds from the private placement of Luoxis stock. Although it is difficult to predict our liquidity requirements, based upon our current operating plan, we believe we will have sufficient cash to meet our projected operating requirements for at least the next 12 months. See “—Liquidity and Capital Resources.”

We have not received any material revenues from the commercialization of our product candidates and do not expect to receive significant revenues from the commercialization of our product candidates in the near term. We have incurred accumulated net losses since our inception, and as of December 31, 2014, we had a deficit accumulated of $10.1 million. Our net loss was $7.1 million for the year ended December 31, 2014, $3.9 million for the year ended December 31, 2013.

Significant Accounting Policies and Estimates

Principles of Combination

Luoxis and Vyrix are governed by a common board of directors and they are both majority owned by Ampio Pharmaceuticals, Inc., or Ampio. Therefore, the accompanying combined financial statements include the accounts of Luoxis and Vyrix, collectively “the combined Vyrix and Luoxis company”. All significant intercompany transactions have been eliminated in this combination.

Cash and Cash Equivalents

The combined Vyrix and Luoxis company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents consist primarily of money market fund investments. The combined Vyrix and Luoxis company’s investment policy is to preserve principal and maintain liquidity. The combined Vyrix and Luoxis company periodically monitors its positions with, and the credit quality of the financial institutions with which it invests. Periodically, throughout the year, the combined Vyrix and Luoxis company has maintained balances in excess of federally insured limits.

Revenue Recognition

Product & Service Sales

We recognize revenue from product and service sales when there is persuasive evidence that an arrangement exists, delivery has occurred, the price is fixed or determinable and collectability is reasonably assured.

License Agreements and Royalties

Payments received upon signing of license agreements are for the right to use the license and are deferred and amortized over the lesser of the license term or patent life of the licensed drug. Milestone payments relate to obtaining regulatory approval in the territory, cumulative sales targets, and other projected milestones and are recognized at the time the milestone requirements are achieved. Royalties will be recognized as revenue when earned.

Accounts Receivable

Accounts receivable are recorded at their net realized value. We evaluate collectability of accounts receivable on a quarterly basis and record a valuation allowance accordingly.

Inventories

Inventories are recorded at the lower of cost or market, with cost determined on a first-in, first-out basis. We periodically review the composition of our inventories in order to identify obsolete, slow-moving or otherwise unsaleable items. If unsaleable items are observed and there are no alternate uses for the inventory, we will record a write-down to net realizable value in the period that the impairment is first recognized.

by the FDA, inventory used in clinical trials is expensed at the time the inventory is packaged for the clinical trial. Prior to receiving FDA approval, costs related to purchases of the active pharmaceutical ingredient and the manufacturing of the product candidate are recorded as research and development expense. Currently, our ORP product is available for sale for research purposes and our Zertane product is not currently being capitalized.

Fixed Assets

Fixed assets are recorded at cost and after being placed in service, are depreciated using the straight-line method over estimated useful lives.

In-Process Research and Development

In-process research and development, or IPRD, relates to the Zertane product and clinical trial data acquired in connection with the 2011 acquisition of BioSciences Inc. The $7,500,000 recorded was based on an independent, third party appraisal of the fair value of the assets acquired. IPRD is considered an indefinite-lived intangible asset and its fair value will be assessed annually and written down if impaired. Once the Zertane product obtains regulatory approval and commercial production begins, IPRD will be reclassified to an intangible that will be amortized over its estimated useful life. If we decided to abandon the Zertane product, the IPRD would be expensed.

Patents

Costs of establishing patents, consisting of legal and filing fees paid to third parties, are expensed as incurred. The fair value of the Zertane patents, determined by an independent, third party appraisal to be $500,000, acquired in connection with the 2011 acquisition of BioSciences is being amortized over the remaining U.S. patent lives of approximately 11 years. The fair value of the Luoxis patents was $380,000 when they were acquired in connection with the 2013 formation of Luoxis and is being amortized over the remaining U.S. patent lives of approximately 15 years.

Use of Estimates

The preparation of combined financial statements in accordance with Generally Accepted Accounting Principles in the United States of America, or GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the combined financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include the fair value of valuation allowances, stock-based compensation, useful lives of fixed assets and assumptions in evaluating impairment of indefinite lived assets. Actual results could differ from these estimates.

Income Taxes

Luoxis and Vyrix are included in the combined tax returns of Ampio. The combined Vyrix and Luoxis company’s taxes are computed and reported on a “separate return” basis for these combined financial statements. Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

as the largest amount that is more than 50% likely to be realized upon recognition of the benefit. The combined Vyrix and Luoxis company believes that it has no material uncertain tax positions. The combined Vyrix and Luoxis company’s policy is to record a liability for the difference between the benefits that are both recognized and measured pursuant to FASB ASC 740-10, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109, or ASC 740-10, and tax position taken or expected to be taken on the tax return. Then, to the extent that the assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. The combined Vyrix and Luoxis company reports tax-related interest and penalties as a component of income tax expense. During the periods reported, management of the combined Vyrix and Luoxis company has concluded that no significant tax position requires recognition under ASC 740-10.

Stock-Based Compensation

The combined Vyrix and Luoxis company accounts for share based payments by recognizing compensation expense based upon the estimated fair value of the awards on the date of grant. The combined Vyrix and Luoxis company determines the estimated grant fair value using the Black-Scholes option pricing model and recognizes compensation costs ratably over the vesting period using the graded method.

Research and Development

Research and development costs are expensed as incurred with expense recorded in the respective periods.

Fair Value of Financial Instruments

The carrying amounts of financial instruments, including cash and cash equivalents, accounts payable and other current assets and liabilities are carried at cost which approximates fair value due to the short maturity of these instruments.

Impairment of Long-Lived Assets

Ampio routinely performs an annual evaluation of the recoverability of the carrying value of its long-lived assets to determine if facts and circumstances indicate that the carrying value of assets or intangible assets may be impaired and if any adjustment is warranted. Based on Ampio’s evaluation as of December 31, 2014, no impairment existed for long-lived assets.

Newly Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board or FASB, issued Accounting Standards Update or ASU, 2014-09 regarding Accounting Standards Codification, or ASC, Topic 606, “Revenue from Contracts with Customers”. The standard provides principles for recognizing revenue for the transfer of promised goods or services to customers with the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance will be effective for reporting periods beginning after December 15, 2016. Early adoption is not permitted. We are currently evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption.

In June 2014, the FASB issued ASU 2014-10, “Development Stage Entities (Topic 915)”. The guidance eliminates the definition of a development stage entity thereby removing the incremental financial reporting requirements from GAAP for development stage entities, primarily presentation of inception to date financial statements. The provisions of the amendments are effective for calendar year 2015; however, early adoption is permitted and, accordingly, we elected to implement the guidance for our financial statements.

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”, or ASU 2014-15. ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, with early adoption permitted. Management is currently assessing the impact the adoption of ASU 2014-15 will have on our financial statements.

In January 2015, the FASB issued ASU 2015-01, “Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items.” The purpose of this amendment is to eliminate the concept of extraordinary items. As a result, an entity will no longer be required to separately classify, present and disclose extraordinary events and transactions. The amendment is effective for annual reporting periods beginning after December 15, 2015 and subsequent interim periods with early application permitted. Management is currently assessing the impact the adoption of ASU 2015-01 will have on our financial statements.

Results of Operations—Year Ended December 31, 2014 and 2013 See Notes to Combined Financial Statements

Results of operations for the years ended December 31, 2014 and 2013 reflected losses of $7.1 million and $3.9 million, respectively. These losses include non-cash charges related to stock-based compensation, depreciation and amortization expense, amortization of prepaid research and development-related party.

Revenue

We have not generated material revenue in our operating history. The total revenue recognized during 2014 and 2013 was $90,000 and $50,000, respectively. Included in the revenues are $77,000 and $50,000 license revenue recognized during 2014 and 2013, respectively, which represents the amortization of the upfront payments received on our license agreements. From an agreement entered into in 2012, the initial payment of $500,000 from the license agreement of Zertane with a Korean pharmaceutical company was deferred and is being recognized over 10 years. As well as from an agreement entered into in 2014 with a Canadian-based supplier, the initial payment of $250,000 from the license agreement of Zertane was deferred and is being recognized over seven years. We also recognized $13,000 related to Luoxis product and service revenue in fiscal year 2014.

Expenses

Research and Development

Research and development costs consist of labor, stock-based compensation, clinical trials and sponsored research, consultants and sponsored research – related party. These costs relate solely to research and development without an allocation of general and administrative expenses and are summarized as follows:


	Year Ended December 31,
	2014		2013
Clinical trials and sponsored research	$	3,534,000	$	2,432,000
Labor		300,000		90,000
Stock-based compensation		348,000		306,000
Sponsored Research—related party		191,000		46,000
Consultants and other		73,000		129,000

	$	4,446,000	$	3,003,000

Comparison of Years Ended December 31, 2014 and 2013

Research and development expenses increased $1,443,000, or 48%, in 2014 over 2013. This was due primarily to labor and clinical trial and sponsored research costs associated with the Luoxis’ development of its RedoxSYS system. We expect research and development expenses to at least maintain the 2014 level or possible increase in 2015.

During fiscal year 2014, we spent $2,984,000 on Luoxis’ development of its RedoxSYS system and $1,462,000 on Vyrix’s Zertane drug. During fiscal year 2013, we spent $1,780,000 on Luoxis’ development of its RedoxSYS system and $1,223,000 on Vyrix’s Zertane drug.

General and Administrative

General and administrative expenses consist of personnel costs for employees in executive, business development and operational functions and director fees; stock-based compensation; patents and intellectual property; professional fees include legal, auditing and accounting; occupancy, travel and other includes rent, governmental and regulatory compliance, insurance, investor/public relations and professional subscriptions. These costs are summarized as follows:


	Year Ended December 31,
	2014		2013
Labor	$	715,000	$	191,000
Stock-based compensation		531,000		313,000
Patent costs		328,000		549,000
Professional fees		610,000		82,000
Occupancy, travel and other		1,083,000		490,000

	$	3,267,000	$	1,625,000

Comparison of Years Ended December 31, 2014 and 2013

General and administrative costs increased $1,642,000, or 101%, in 2014 over 2013. The increase in labor costs and stock-based compensation primarily relates to increased professional staffing, bonuses earned and stock options granted in Luoxis and Vyrix as well as the continuing vesting of stock option awards granted in previous years. The increase in professional fees relates to the expensed legal costs associated with Vyrix trying to complete an initial public offering during 2014. We expect general and administrative expenses to increase in 2015.

Net Cash Used in Operating Activities

During 2014, our operating activities used $7.2 million in cash. The use of cash was approximately $106,000 higher than the net loss due primarily to non-cash charges for stock-based compensation, depreciation and amortization. Cash provided in operating activities also included a $630,000 decrease in deferred tax liability and a $615,000 increase in research and development related party.

During 2013, our operating activities used approximately $4.0 million in cash. The use of cash was $39,000 higher than the net loss due primarily to non-cash charges for stock-based compensation, depreciation and amortization. Net cash provided in operating activities also included a $227,000 decrease in accounts payable and a $620,000 decrease in deferred tax liability which were partially offset by an increase of $206,000 in related party payable.

Net Cash Used in Investing Activities

During 2013, cash was used to acquire ORP patents on behalf of Luoxis and the purchase of a Luoxis ORP manufacturing device.

Net Cash from Financing Activities

Net cash provided by financing activities in 2014 was $5.4 million which reflects proceeds from the convertible notes to Ampio.

Net cash provided by financing activities in 2013 was $6.4 million which reflects proceeds and costs from the Luoxis’ private financing of $4.7 million and $672,000, respectively. Net cash provided by financing activities in 2013 also included $300,000 in proceeds from a convertible note to Ampio and $2.0 million contribution by Ampio.

Contractual Obligations and Commitments

Commitments and contingencies are described below and summarized by the following table for the years ending December 31:


	Total		2015		2016		2017		2018		2019		Thereafter
Manufacturing	$	91,000	$	91,000	$	—	$	—	$	—	$	—	$	—
Clinical research and trial obligations		331,000		331,000		—		—		—		—		—
Sponsored research agreement with related party		350,000		70,000		70,000		70,000		70,000		70,000		—
Management fee		1,334,000		278,000		264,000		264,000		264,000		264,000		—

	$	2,106,000	$	770,000	$	334,000	$	334,000	$	334,000	$	334,000	$	—

Manufacturing

Luoxis has entered into an agreement with a local manufacturing company to build its RedoxSYS system, the current remaining commitment is $91,000.

Clinical Research and Trial Obligations

In connection with upcoming clinical trials, Vyrix has a remaining commitment of $193,000 on contracts related to the Zertane drug and Luoxis has entered into research agreements with a remaining commitment of $138,000 related to the RedoxSYS system.

Sponsored Research Agreement with Related Party

Luoxis entered into a Sponsored Research Agreement with TRLLC, a related party, in June 2013. Under the terms of the Sponsored Research Agreement, TRLLC agreed to work collaboratively in advancing the ORP diagnostic platform through research and development efforts. The Sponsored Research Agreement may be terminated without cause by either party on 30 days’ notice (see Note 8—Related Party Transactions).

Management Fee

In January of 2013, Luoxis entered into an agreement with Ampio whereby Luoxis agreed to pay Ampio $15,000 per month for shared overhead which includes costs related to the shared facility, corporate staff, and other miscellaneous overhead expenses. Vyrix entered into a similar agreement with Ampio in January of 2014, at a rate of $7,000 per month. These agreements will be in effect until they have been terminated in writing by both parties.

Liquidity and Capital Resources

We have not generated significant revenue as our primary activities are focused on research and development, advancing our primary product candidates, and raising capital. As of December 31, 2014, we had cash and cash equivalents totaling $161,000 available to fund our operations and $445,000 in accounts payable and accrued compensation. Based upon the $6.3 million of cash received from January 2015 to April 2015 from Ampio to the combined Vyrix and Luoxis company plus the Ampio commitment to fund the combined Vyrix and Luoxis company operation with another $10.0 million, we believe we have adequate capital to continue operations into the second half of 2016. This projection is based on a number of assumptions that may prove to be wrong, and we could exhaust our available cash and cash equivalents earlier than presently anticipated. We intend to seek additional capital within the next 12 months to expand our clinical development activities for Zertane and RedoxSYS. In addition, we intend to evaluate the capital markets from time to time to determine when to raise additional capital in the form of equity, convertible debt or otherwise, depending on market conditions relative to our need for funds at such time, and we will seek to raise additional capital during the next 12 months at such time as we conclude that such capital is available on terms that we consider to be in the best interests of us and our stockholders.

We have prepared a budget for 2015 which reflects cash requirements for fixed, on-going expenses such as payroll, legal and accounting, patents and overhead at an average cash burn rate of approximately $0.4 million per month. Additional funds are planned for regulatory approvals, clinical trials, outsourced research and development and commercialization consulting. Accordingly, 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 Ampio’s contributions to us and 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 three years, volatility in the financial markets has adversely affected the market capitalizations of many bioscience 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.

Quantitative and Qualitative Disclosures about Market Risk

We are not currently exposed to material market risk arising from financial instruments, changes in interest rates or commodity prices, or fluctuations in foreign currencies. We have no need to hedge against any of the foregoing risks and therefore currently engage in no hedging activities.

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.”

MANAGEMENT

Current Directors and Executive Officers

The following table sets forth the names and ages of all of our directors and executive officers following consummation of the Merger. Our Board of Directors is currently comprised of one member, who is elected annually to serve for one year or until his successor is duly elected and qualified, or until his earlier resignation or removal. Executive officers serve at the discretion of the Board of Directors and are appointed by the Board of Directors. Each of the director and executive officers listed below joined us upon the closing of the Merger on April 16, 2015. Also provided herein are brief descriptions of the business experience of each of the directors and executive officers during the past five years, and an indication of directorships held by the director in other companies subject to the reporting requirements under the federal securities law. As of the date of this Form 8-K, the member of our Board of Directors and our executive officers are as follows:

Name

Age

Position

Principal Occupation and Areas of

Relevant Experience For Directors

Joshua R. Disbrow (1)

Chief Executive Officer

Joshua R. Disbrow has been employed by us since April 16, 2015. Prior to the closing of the Merger, Mr. Disbrow was the Chief Executive Officer of Luoxis since January 2013. Mr. Disbrow was also the Chief Operating Officer of Ampio since December 2012. Prior to joining Ampio, he served as the Vice President of Commercial Operations at Arbor Pharmaceuticals, a specialty pharmaceutical company, from May 2007 through October 2012. He joined Arbor as that company’s second full-time employee. Mr. Disbrow led the company’s commercial efforts from inception to the company’s acquisition in 2010 and growth to over $127 million in net sales in 2011. By the time Mr. Disbrow departed Arbor in late 2012, he had led the growth of the commercial organization to comprise over 150 people in sales, marketing sales training, managed care, national accounts, and other commercial functions. Mr. Disbrow has spent over 17 years in the pharmaceutical, diagnostic and medical device industries and has held positions of increasing responsibility in sales, marketing, sales management, commercial operations and commercial strategy. Prior to joining Arbor, Mr. Disbrow served as Regional Sales Manager with Cyberonics, Inc., a medical device company focused on neuromodulation therapies from June 2005 through April 2007. Prior to joining Cyberonics he was the Director of Marketing at LipoScience, an in vitro diagnostics company. Mr. Disbrow holds an MBA from Wake Forest University and BS in Management from North Carolina State University.

(1)	Joshua R. Disbrow was appointed the Chief Executive Officer of Luoxis in January 2013. In connection with the Merger, he resigned from Luoxis and was appointed the Chief Executive Officer of the Combined Company upon the closing of the Merger on April 16, 2015.

(2)	Jarrett T. Disbrow was appointed the Chief Executive Officer of Vyrix in November 2013. In connection with the Merger, he resigned from Vyrix and was appointed the Chief Operating Officer, Secretary and Treasurer of the Combined Company upon the closing of the Merger on April 16, 2015.

(3)	Gregory A. Gould was appointed the Chief Financial Officer of Luoxis and Vyrix in June 2014. In connection with the Merger, he resigned from Luoxis and Vyrix and was appointed the Chief Financial Officer of the Combined Company upon the closing of the Merger on April 16, 2015.

(4)	Michael Macaluso was appointed a Director of Luoxis in January 2013 and a Director of Vyrix in November 2013. In connection with the Merger, he resigned from the boards of Luoxis and Vyrix and was appointed a Director of the Combined Company upon the closing of the Merger on April 16, 2015.

Former Directors and Executive Officers

Name

Age

Former Positions with the

Company

Date Assumed
Positions

Date Resigned
Positions

James B. Wiegand (1)

Former President, Chief Financial Officer, Secretary and Director

9-Aug-02

24-Mar-15

Gary V. Cantrell (2)

Director

1-Feb-14

24-Mar-15

John A. Donofrio Jr (3)

Director

1-Feb-14

24-Mar-15

Nicholas J. Leb (4)

Director

1-Feb-14

24-Mar-15

Dr. Vaughan Clift (5)

Chief Medical Officer

11-May-14

13-May-15

(1)	Mr. Wiegand was appointed President, Chief Executive Officer and Secretary and a director on August 9, 2002. In connection with the Merger, he resigned from all of his positions with us on April 16, 2015.

(2)	Mr. Cantrell was appointed a director of Vyrix in February 2014. In connection with the Merger, he resigned from this position on April 16, 2015 as we continue to assess the appropriate corporate governance structure.

(3)	Mr. Donofrio was appointed a director of Vyrix in February 2014. In connection with the Merger, he resigned from this position on April 16, 2015 as we continue to assess the appropriate corporate governance structure.

(4)	Mr. Leb was appointed a director of Vyrix in February 2014. In connection with the Merger, he resigned from this position on April 16, 2015 as we continue to assess the appropriate corporate governance structure.

(5)	Dr. Clift was appointed Chief Medical Officer of Vyrix in May 2014. In connection with the Merger, he resigned from this position on March 13, 2015 as we continue to assess the appropriate management structure.

Family Relationships and Other Matters

Jarrett T. Disbrow, our Chief Operating Officer, is the brother of Joshua R. Disbrow, our Chief Executive Officer. There are no other family relationships among or between any of our current or former executive officers and directors.

Involvement in Certain Legal Proceedings

None of our directors, executive officers, significant employees, promoters or control persons has been involved in any legal proceeding in the past 10 years that would require disclosure under Item 401(f) of Regulation S-K promulgated under the Securities Act.

Board Composition and Director Independence

Our Board of Directors is currently comprised of a sole director, Michael Macaluso, who is an executive officer and director of Ampio and is not an independent director. We look to our director to guide us through our next phase as a public company and continue and manage our growth. Our director brings leadership experience from a variety of corporate, technology and professional backgrounds which we require to continue to grow and to add stockholder value. Our director also has worked with startup through public companies and bring depth of knowledge in building stockholder value, growing a company from inception, developing leading edge products, and navigating mergers and acquisitions and the public company process.

Board Committees

Our Board of Directors has not established a separate standing audit committee within the meaning of Section 3(a)(58)(A) of the Exchange Act or separate standing nominating or compensation committees, or committees performing similar functions, nor has it adopted charters for any such committee. Due to the present and prior size of our Board of Directors, our Board of Directors believes that it is not necessary to have separate standing audit, nominating or compensation committees at this time because the functions of each such committee are adequately performed by our full Board of Directors. However, it is anticipated that our Board of Directors will form separate standing audit, nominating and compensation committees, with the audit committee including an audit committee financial expert and the audit and compensation committees consisting solely of independent directors, if and when our Board of Directors determines that the establishment of such committees is advisable as we seek to further develop our business and operations and potentially expand the size of our Board of Directors.

Nominations to the Board of Directors

Director candidates are considered based upon various criteria, including without limitation their broad-based business and professional skills and experiences, knowledge of the industry in which we operate and ability to add perspectives relating to that industry, expertise in the healthcare field, concern for the long-term interests of our stockholders, diversity, and personal integrity and judgment. Our Board of Directors has a critical role in guiding our strategic direction and overseeing the management of our business, and accordingly, we seek to attract and retain highly qualified directors who have sufficient time to engage in the activities of our Board of Directors and to understand and enhance their knowledge of our industry and business plans.

Stockholder Communications

Although we do not have a formal policy regarding stockholder communications with our Board of Directors, stockholders may communicate with our Board of Directors, or any individual director on our Board of Directors, by writing to us at the address of our principal executive offices, addressing the communication to the attention of our Chief Executive Officer, and specifying the Board of Directors or, if applicable, the individual member thereof as the intended recipient of the communication.

Board Leadership Structure and Board’s Role in Risk Oversight

The positions of our Chairman of the Board of Directors and Chief Executive Officer are presently separated at our company. Separating these positions allows our Chief Executive Officer to focus on our day-to-day business, while allowing the Chairman to lead the Board of Directors in its fundamental role of providing advice to and oversight of management. Our Board of Directors recognizes the time, effort and energy that the Chief Executive Officer must devote to his position in the current business environment, as well as the commitment required to serve as our Chairman, particularly as the Board of Directors’ oversight responsibilities continue to grow. Our Board of Directors believes its administration of its risk oversight function has not affected its leadership structure. Our Board of Directors believes that having separate positions is the appropriate leadership structure for us at this time and demonstrates our commitment to good corporate governance.

The role of our Board of Directors is to oversee our risk management function. Members of our management team report to our Board of Directors on areas of material risk to us, including operational, financial, legal and regulatory, and strategic and other risks, and provide it with all information necessary to enable our directors to develop a fulsome understanding of the applicable risk and conduct an evaluation of the risk and management’s manner of addressing it. If an identified area of risk poses an actual or potential conflict with management, our non-employee directors may conduct the evaluation. It is anticipated that our Board of Directors will in the future establish more formal procedures regarding the scope and administration of its risk oversight role.

Compensation Committee Interlocks and Insider Participation

Our Board of Directors has not established a separate standing compensation committee. None of our current or former executive officers serves, or during our last completed fiscal year has served, as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any other entity that has one or more of its executive officers serving as a member of our Board of Directors.

Code of Ethics

We currently have not adopted a written code of ethics that applies to our officers, directors and employees, including our principal executive officer and principal accounting officer. Our Board of Directors intends to adopt such a formal code of ethics when it deems appropriate based on the size of our operations and personnel.

Compensation of Directors

In establishing director compensation, our Board of Directors is guided by the following goals:

•

compensation should consist of a combination of cash and equity awards that are designed to fairly pay the directors for work required for a company of our size and scope;

•

compensation should align the directors’ interests with the long-term interests of stockholders; and

•

compensation should assist with attracting and retaining qualified directors.

We intend to pay our non-employee directors $1,500 per meeting for each in-person Board meeting attended and $1,000 per meeting for each telephonic meeting attended. We will reimburse them for expenses incurred in connection with their service as director.

Jarrett T. Disbrow, who served as a member of Vyrix’s board of directors during 2014, did not receive any compensation, equity awards or non-equity awards for his service as a director, although Mr. Disbrow did receive compensation in 2014 from and with respect to his employment with Vyrix. James B. Wiegand, who served as the sole director of Rosewind in 2014, did not receive any compensation, equity awards or non-equity awards for his service as a director. Mr. Wiegand was appointed President, Chief Executive Officer and Secretary and a director of Rosewind on August 9, 2002. He resigned from all of his positions with us on April 16, 2015.

The following table provides information regarding all compensation paid to non-employee directors of Vyrix and Luoxis during the fiscal year ended December 31, 2014:


Name	Fees Earned or Paid in Cash		Stock Option Awards (1)		All Other Compensation		Total
Micael Macaluso (2)	$	—	$	279,417	$	—	$	279,417
Gary V. Cantrell (3)	$	—	$	—	$	—	$	—
John A. Donofrio Jr (4)	$	—	$	—	$	—	$	—
Nicholas J. Leb (5)	$	—	$	—	$	—	$	—

(1)	This column reflects the aggregate grant date fair value computed in accordance with FASB ASC Topic 718.

(2)	Michael Macaluso was appointed a Director of Luoxis in January 2013 and a Director of Vyrix in November 2013. In connection with the Merger, he resigned from the boards of Luoxis and Vyrix and was appointed a Director of the Combined Company upon the closing of the Merger on April 16, 2015.

(3)	Gary V. Cantrell was appointed a director of Vyrix in February 2014. In connection with the Merger, he resigned from this position on April 16, 2015 as we continue to assess the appropriate corporate governance structure.

(4)	John A. Donofrio Jr. was appointed a director of Vyrix in February 2014. In connection with the Merger, he resigned from this position on April 16, 2015 as we continue to assess the appropriate corporate governance structure.

(5)	Nicholas J. Leb was appointed a director of Vyrix in February 2014. In connection with the Merger, he resigned from this position on April 16, 2015 as we continue to assess the appropriate corporate governance structure.

EXECUTIVE COMPENSATION

From fiscal year 2012 to the completion of the Merger on April 16, 2015, no compensation was earned by or paid to James B. Wiegand, the former President, Chief Financial Officer and Secretary of Rosewind.

Compensation Discussion and Analysis

Compensation Philosophy and Objectives . Vyrix’ and Luoxis’ executive compensation program is designed to retain the executive officers and to motivate them to increase stockholder value on both an annual and longer term basis. These objectives are to be accomplished primarily by positioning Vyrix and Luoxis to maximize their product development efforts and to transform, over time, those efforts into collaboration revenues and income. To that end, compensation packages include significant incentive forms of stock-based compensation to ensure that each executive officer’s interest is aligned with the interests of the stockholders.

Executive Compensation Components. Vyrix’ and Luoxis’ respective compensation program for their named executive officers, consists of three components: (i) a base salary, (ii) discretionary bonuses based on performance, and (iii) equity compensation. Each of these components is reflected in the Summary Compensation Table below.

Why Each Element of Compensation is Paid; How the Amount of Each Element is Determined . Vyrix and Luoxis intend to pay each of these elements in order to ensure that a desirable overall mix is established between base compensation and incentive compensation, cash and non-cash compensation, and annual and long-term compensation. Vyrix and Luoxis also intend to evaluate on a periodic basis the overall competitiveness of the executive compensation packages as compared to packages offered in the marketplace for which they compete with executive talent. Overall, Vyrix and Luoxis believe that the executive compensation packages are currently appropriately balanced and structured to retain and motivate the named executive officers, while necessarily taking into account our presently limited financial resources.

Risk Assessment . Vyrix and Luoxis have reviewed the compensation program and believe that the program, including the cash incentive compensation and equity incentive compensation, does not encourage the named executive officers to engage in any unnecessary or excessive risk-taking. As a result, Vyrix and Luoxis have to date not implemented a provision for recovery by them of cash or incentive compensation bonuses paid to the named executive officers.

The following table summarizes the compensation earned in each of Vyrix’ and Luoxis’ fiscal years ended December 31, 2014, 2013 and 2012 by its named executive officers.

Summary Compensation Table


Name and Principal Position (a)	Year (b)		Salary ($) (c)		Bonus ($) (d)		Stock Award ($) (e)		Option Award ($)(1) (f)		Non-Equity Incentive Plan Compensation ($) (g)		Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (h)		All Other Compensation ($) (i)		Total ($) (j)
Named Exective Officers
Joshua R. Disbrow (2)
Chief Executive Officer		2014		245,000		180,000		—		197,918		—		—		—		622,918
since December 2012		2013		228,958		127,500		—		353,435		—		—		—		709,893
		2012		11,375		—		—		—		—		—		—		11,375
Jarrett T. Disbrow (3)
Chief Operating Officer, Secretary and Treasurer since November 2013		2014		210,000		5,000		—		—		—		—		—		215,000
		2013		8,750		5,000		—		222,584		—		—		—		236,334
		2012		—		—		—		—		—		—		—		—
Gregory A. Gould (4)
Chief Financial Officer since June 2014		2014		—		—		—		65,973		—		—		—		65,973
		2013		—		—		—		—		—		—		—		—
		2012		—		—		—		—		—		—		—		—
Vaughan Clift, M.D. (5)
Former Chief Medical Officer		2014		—		—		—		64,595		—		—		—		64,595
		2013		—		—		—		—		—		—		—		—
		2012		—		—		—		—		—		—		—		—

(1)	This column reflects the grant date fair value of option awards as determined in accordance with FASB ASC Topic 718, excluding the effect of any estimated forfeitures.

(2)	Joshua R. Disbrow was appointed the Chief Executive Officer of Luoxis in January 2013. In connection with the Merger, he resigned from Luoxis and was appointed the Chief Executive Officer of the Combined Company upon the closing of the Merger on April 16, 2015.

(3)	Jarrett T. Disbrow was appointed the Chief Executive Officer of Vyrix in November 2013. In connection with the Merger, he resigned from Vyrix and was appointed the Chief Operating Officer, Secretary and Treasurer of the Combined Company upon the closing of the Merger on April 16, 2015.

(4)	Gregory A. Gould was appointed the Chief Financial Officer of Luoxis and Vyrix in June 2014. In connection with the Merger, he resigned from Luoxis and Vyrix was appointed the Chief Financial Officer of the Combined Company upon the closing of the Merger on April 16, 2015.

(5)	Dr. Vaughan Clift was appointed the Chief Medical Officer of Vyrix in May 2014. In connection with the Merger, he resigned from this position on March 13, 2015 as we continue to assess the appropriate management structure.

2014 Grants of Plan-Based Awards Table

During fiscal year 2014, stock options were granted to our named executive officers as follows:


Name	Grant Date		All Other Option Awards: Number of Securities Underlying Options (#)			Exercise Price of Option Awards ($/Share)		Grant Date Fair Value of Option Awards ($)(1)
Named Exective Officers
Vaughan Clift M.D.		3/11/2014		150,000	(2)	$	0.70	$	64,595
Joshua Disbrow		8/11/2014		150,000	(3)	$	1.60	$	197,918
Gregory A. Gould		8/11/2014		50,000	(3)	$	1.60	$	65,973

(1)	The amounts reported in this column represent the aggregate grant date fair value computed in accordance with FASB ASC 718, excluding the effect of any estimated forfeitures and may not correspond to the actual value that will be realized by the named executive officer.

(2)	These Vyrix options were accelerated and cancelled in connection with the merger. Because the consideration paid to holders of common stock of Vyrix was less than the exercise price of such options, no amount was paid to the option holder in connection with the cancellation.

(3)	These Luoxis options were accelerated and cancelled in connection with the merger. Because the consideration paid to holders of common stock of Luoxis was less than the exercise price of such options, no amount was paid to the option holder in connection with the cancellation.

Outstanding Equity Awards at 2014 Fiscal Year-End

The following table provides information regarding the current holdings of equity awards by our named executive officers on December 31, 2014.


Name			Number of Securities Underlying Unexercised Options Exercisable (#)		Number of Securities Underlying Unexercised Options Unexercisable (#)		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($)		Equity Incentie Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
(a)			(b)		(c)		(d)		(e)		(f)		(g)		(h)		(i)		(j)
Named Exective Officers
Joshua R. Disbrow	(1	)		250,000		250,000		—		1.00		6/15/2023		—		—		—		—
Joshua R. Disbrow	(2	)		—		150,000		—		1.60		8/11/2024		—		—		—		—
Jarrett T. Disbrow	(3	)		250,000		250,000		—		0.70		11/18/2023		—		—		—		—
Gregory A. Gould	(4	)		—		50,000		—		1.60		8/11/2024		—		—		—		—
Vaughan Clift, M.D.	(5	)		37,500		112,500		—		0.70		3/11/2024		—		—		—		—
James B. Wiegand				—		—		—		—		—		—		—		—		—

(1)

Unexercisable options vest annually and become fully vested on June 14, 2016. These Luoxis options were accelerated and cancelled in connection with the merger, and option holders received a cash payment per option share equal to the difference between the consideration payable per share of common stock of Luoxis pursuant to the merger and the exercise price of the option.

(2)

Unexercisable options vest monthly and become fully vested on August 11, 2018. These Luoxis options were accelerated and cancelled in connection with the merger. Because the consideration paid to holders of common stock of Luoxis was less than the exercise price of such options, no amount was paid to the option holder in connection with the cancellation.

(3)

Unexercisable options vest annually and become fully vested on November 18, 2016. These Vyrix options were accelerated and cancelled in connection with the merger. Because the consideration paid to holders of common stock of Vyrix was less than the exercise price of such options, no amount was paid to the option holder in connection with the cancellation.

(4)

(5)

Unexercisable options vest annually and become fully vested on March 11, 2017. These Vyrix options were accelerated and cancelled in connection with the merger. Because the consideration paid to holders of common stock of Vyrix was less than the exercise price of such options, no amount was paid to the option holder in connection with the cancellation.

Option Exercises and Stock Vested in 2014

During the fiscal year 2014, none of our named executive officers exercised any options.

Employment and Consulting Agreements

Employment Agreements

We entered into an employment agreement with Joshua Disbrow in connection with his employment as our Chief Executive Officer. The agreement is for a term of 24 months beginning on April 16, 2015, subject to termination by us with or without Cause or as a result of officer’s disability, or by the officer with or without Good Reason (as discussed below). Mr. Disbrow is entitled to receive $250,000 in annual salary, plus a discretionary performance bonus with a target of 125% of his base salary and 600,000 stock options with 50% vesting upon grant and the remainder vesting on the following two anniversaries of the grant date. Mr. Disbrow is also eligible to participate in the benefit plans maintained by us from time to time, subject to the terms and conditions of such plans.

We entered into an employment agreement with Jarrett Disbrow, our Chief Operating Officer, in connection with his employment with us. The agreement is for a term of 24 months beginning on April 16, 2015, subject to termination by us with or without Cause or as a result of the officer’s disability, or by the officer with or without Good Reason (as discussed below). Mr. Disbrow is entitled to receive $250,000 in annual salary, plus a discretionary performance bonus with a target of 125% of his base salary and 600,000 stock options with 50% vesting upon grant and the remainder vesting on the following two anniversaries of the grant date. Mr. Disbrow is also eligible to participate in the benefit plans maintained by us from time to time, subject to the terms and conditions of such plans.

Payments Provided Upon Termination for Good Reason or Without Cause

Pursuant to the employment agreements, in the event Mr. Joshua Disbrow’s or Mr. Jarrett Disbrow’s employment is terminated without Cause by us or either officer terminates his employment with Good Reason, we will be obligated to pay him any accrued compensation and a lump sum payment equal to two times his base salary in effect at the date of termination, as well as continued participation in the health and welfare plans for up to two years. All vested stock options shall remain exercisable from the date of termination until the expiration date of the applicable award. So long as a Change in Control is not in effect, then all options which are unvested at the date of termination Without Cause or for Good Reason shall be accelerated as of the date of termination such that the number of option shares equal to 1/24th the number of option shares multiplied by the number of full months of such officer’s employment shall be deemed vested and immediately exercisable by the officer. Any unvested options over and above the foregoing shall be cancelled and of no further force or effect, and shall not be exercisable by such officer.

“Good Reason” means, without the officer’s written consent, there is:

•

a material reduction in the officer’s overall responsibilities or authority, or scope of duties (it being understood that the occurrence of a Change in Control shall not, by itself, necessarily constitute a reduction in the officer’s responsibilities or authority);

•

a material reduction of the level of the officer’s compensation (excluding any bonuses) (except where there is a general reduction applicable to the management team generally, provided, however, that in no case may the base salary be reduced below certain specified amounts); or

•

a material change in the principal geographic location at which the officer must perform his services.

“Cause” means:

•

conviction of, or entry of a plea of guilty to, or entry of a plea of nolo contendere with respect to, any crime, other than a traffic violation which is a misdemeanor;

•

willful malfeasance or willful misconduct by the officer in connection with his employment;

•

gross negligence in performing any of his duties;

•

willful and deliberate violation of any of our policies;

•

unintended but material breach of any written policy applicable to all employees adopted by us which is not cured to the reasonable satisfaction of the board;

•

unauthorized use or disclosure of any proprietary information or trade secrets of us or any other party as to which the officer owes an obligation of nondisclosure as a result of the officer’s relationship with us;

•

willful and deliberate breach of his obligations under the employment agreement; or

•

any other material breach by officer of any of his obligations which is not cured to the reasonable satisfaction of the board.

The severance benefits described above are contingent on each officer executing a general release of claims.

Payments Provided Upon a Change in Control

Pursuant to the employment agreements, in the event of a Change in Control of us, all stock options, restricted stock and other stock-based grants granted or may be granted in the future by us to the officers will immediately vest and become exercisable.

“Change in Control” means: the occurrence of any of the following events:

•

the acquisition by any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (the “Acquiring Person”), other than us, or any of our Subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3- promulgated under the Exchange Act) of 50% or more of the combined voting power or economic interests of the then outstanding voting securities of us entitled to vote generally in the election of directors (excluding any issuance of securities by us in a transaction or series of transactions made principally for bona fide equity financing purposes); or;

•

the acquisition of us by another entity by means of any transaction or series of related transactions to which we are party (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any issuance of securities by us in a transaction or series of transactions made principally for bona fide equity financing purposes ) other than a transaction or series of related transactions in which the holders of the voting securities of us outstanding immediately prior to such transaction or series of related transactions retain, immediately after such transaction or series of related transactions, as a result of shares in us held by such holders prior to such transaction or series of related transactions, at least a majority of the total voting power represented by the outstanding voting securities of us or such other surviving or resulting entity (or if we or such other surviving or resulting entity is a wholly-owned subsidiary immediately following such acquisition, its parent); or

•

the sale or other disposition of all or substantially all of the assets of us in one transaction or series of related transactions.

100

Payments Provided Upon Termination for Cause or Without Good Reason, Death or Disability

Pursuant to the employment agreements, in the event we end the officer’s employment for Cause, if such officer resigns as an employee for reasons other than an event of Good Reason, such officer dies or disability occurs , then we shall pay to the officer the accrued compensation but shall have no obligation to pay the officer any amount, whether for salary, benefits, bonuses, or other compensation or expense reimbursements of any kind, accruing after the end of the employment, and such rights shall, except as otherwise required by law or pursuant to the applicable award agreement or plan, be forfeited immediately upon the end of the employment. For the sake of clarity, any stock options, restricted stock or other equity compensation shall, to the extent vested on the date of resignation without Good Reason, the date we end the employment for Cause, or the date of the officer’s death or disability, remain outstanding and exercisable to the extent provided in the applicable award agreement or plan, by the officer or his personal representative or executor.


Recipient and Benefit	Cause; Without good reason;		Without Cause; Good reason		Death; Disability		Change in Control
Joshua Disbrow
Salary		—	$	500,000		—		—
Stock Options		—		—		—		—
Value of health benefits provided after termination (1)		—		56,510		—		—

Total		—	$	556,510		—		—
Jarrett Disbrow
Salary		—	$	500,000		—		—
Stock Options		—		—		—		—
Value of health benefits provided after termination (1)		—		56,510		—		—

Total		—	$	556,510		—		—

(1)	The value of such benefits is determined based on the estimated cost of providing health benefits to the named executive officer for a period of two years.

101

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information with respect to the beneficial ownership of our common stock as of April 16, 2015 for:

•

each beneficial owner of more than 5% of our outstanding common stock;

•

each of our director and named executive officers; and

•

all of our directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and include common stock that can be acquired within 60 days of April 16, 2015. The percentage ownership information shown in the table is based upon 173,597,365 shares of common stock outstanding as of April 16, 2015.

Except as otherwise indicated, all of the shares reflected in the table are shares of common stock and all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community property laws. The information is not necessarily indicative of beneficial ownership for any other purpose.

In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed outstanding shares of common stock subject to options and warrants held by that person that are immediately exercisable or exercisable within 60 days of April 16, 2015. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Beneficial ownership representing less than 1% is denoted with an asterisk (*). The information in the table below is based on information known to us or ascertained by us from public filings made by the stockholders. Except as otherwise indicated in the table below, addresses of the director, executive officers and named beneficial owners are in care of Rosewind Corporation, 373 Inverness Parkway, Suite 200, Englewood, Colorado 80112.


	Shares Beneficially Owned
	Number		Percentage
5% Stockholders:
Ampio Pharmaceuticals, Inc. ⁽¹⁾		141,535,750		81.53	%
Directors and Named Executive Officers:
Joshua R. Disbrow ⁽²⁾		—		—
Jarrett T. Disbrow ⁽³⁾		—		—
Gregory A. Gould		—		—
Michael Macaluso		—		—
James B. Wiegand ⁽⁴⁾		2,340,569		1.35
All directors and executive officers as a group (five persons)		2,340,569		1.35	%

(1)	The address of Ampio Pharmaceuticals, Inc. is 373 Inverness Parkway, Suite 200, Englewood, CO 80112.

(2)

6,800,000 shares were purchased and held by an irrevocable trust for estate planning in which Mr. Disbrow is a beneficiary. Mr. Disbrow does not have or share investment control over the shares held by the trust, Mr. Disbrow is not the trustee of the trust (nor is any member of Mr. Disbrow’s immediate family) and Mr. Disbrow does not have or share the power to revoke the trust. As such, under Rule 16a-8(b) and related rules, Mr. Disbrow does not have beneficial ownership over the shares purchased and held by the trust.

102

(3)

(4)	Mr. Wiegand was appointed President, Chief Executive Officer and Secretary and a director on August 9, 2002. In connection with the closing of the Merger, he resigned from all of his positions on April 16, 2015.

103

RELATED PARTY TRANSACTIONS

We describe below all transactions and series of similar transactions, other than compensation arrangements, during the last three fiscal years, to which we were a party or will be a party, in which:

•

the amounts involved exceeded or will exceed $120,000; and

•

any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest.

Compensation arrangements for our directors and named executive officers are described elsewhere in this Form 8-K.

Merger

On April 16, 2015, pursuant to the Merger Agreement entered into among Rosewind, Luoxis, Vyrix and two subsidiaries of Rosewind created solely for the purposes of the Merger, and which did not survive the Merger, the Merger occurred in two stages.

Concurrently with the Merger:

•

James Wiegand entered into a consulting agreement with the Combined Company with a one year duration, providing for compensation of $50,000 to him.

•

Each of James Wiegand and Michael Wiegand executed a release in favor of the Combined Company.

•

Each of Ampio, James Wiegand, Michael Wiegand, a trust affiliated with Joshua Disbrow and a trust affiliated with Jarrett Disbrow entered into a lock-up agreement with the Combined Company agreeing not to sell its shares of the Combined Company for two years (except for the one with Ampio, more than three years). The lock-up agreements other than the one with Ampio release 25% of the shares subject to it on or prior to June 30, 2015. The Ampio lock-up agreement terminates upon a change-in-control event of either the Combined Company or Ampio. Each other lock-up agreement terminates upon a change-of-control event of the Combined Company.

104

•

Joshua Disbrow entered into an employment agreement with the Combined Company.

•

Jarrett Disbrow entered into an employment agreement with the Combined Company.

•

The sailing boat owned by Rosewind was transferred to James Wiegand upon the closing of the Merger in exchange for cancellation of indebtedness owing to James Wiegand in the amount of approximately $30,000 (being the approximate value of the sailing boat).

Rosewind

As of August 31, 2014, Rosewind has a secured promissory note to the sole officer and director for $30,985 for working capital. The loan carries a 6% interest rate, matures on demand and is secured by the sailing vessel. Accrued interest payable on the loan totaled $17,607 as of August 31, 2014.

For the years ended August 31, 2014 and 2013 the sole officer of Rosewind contributed services valued at $3,690 and $4,980, respectively. This amount has been booked to additional paid in capital.

On March 3, 2015, Rosewind accepted a cash investment from two irrevocable trusts for estate planning of which Joshua Disbrow and Jarrett Disbrow are beneficiaries. None of such persons have or share investment control over our shares held by such trusts. None of such persons, nor members of their respective immediate families, are trustees of such trusts. None of such persons have or share power to revoke such trusts. Accordingly, under Rule 16a-8(b) and related rules, none of such persons has beneficial ownership over our shares purchased and held by such trusts.

Luoxis and Vyrix

Sales and Purchases of Securities

In November 2013, pursuant to a subscription agreement, Ampio purchased 20,000,000 shares of Vyrix common stock at a purchase price of $0.0001 per share plus the transfer of certain intellectual property described below.

Ampio Loan Agreements

In November 2013, Vyrix entered into a loan agreement with Ampio. Pursuant to the loan agreement, Ampio agrees to lend Vyrix up to an aggregate amount of $3,000,000 through cash advances of up to $500,000 each. Unpaid principal amounts under the loan agreement bear simple interest at the “Applicable Federal Rate” for long-term obligations prescribed under Section 1274(d) of the Internal Revenue Code of 1986, as amended (or any successor provision with similar applicability). The initial term of this loan agreement is for one year, subject to automatic extension of successive one-year terms. Vyrix may repay any outstanding balance at any time without penalty. Ampio has an option of converting any balance outstanding under the loan agreement into shares of Vyrix common stock at the fair market value per share of Vyrix common stock, as determined by the board of directors, as of such conversion date. As of December 31, 2014 the amount advanced was $2,700,000 with interest rates from 2.17%—3.32%. On April 16, 2015, in connection with the closing of the Merger, Ampio released Vyrix from its obligation in the amount of $4,000,000 under the loan agreement as consideration of its share purchase, and the loan agreement was terminated.

In March 2014, Luoxis entered into a loan agreement with Ampio. Pursuant to the loan agreement, Ampio agreed to lend Luoxis $3,000,000. Unpaid principal amounts under the loan agreement bear simple interest at the “Applicable Federal Rate” for long-term obligations prescribed under Section 1274(d) of the Internal Revenue Code of 1986, as

105

amended (or any successor provision with similar applicability). The initial term of this loan agreement is for one year, subject to automatic extension of successive one-year terms. Luoxis may repay any outstanding balance at any time without penalty. Ampio has an option of converting any balance outstanding under the loan agreement into shares of Luoxis common stock at the fair market value per share of Luoxis common stock, as determined by the board of directors, as of such conversion date. As of December 31, 2014 the amount outstanding remained $3,000,000 with interest rates from 2.17% - 3.32%. On April 16, 2015, in connection with the closing of the Merger, Ampio released Luoxis from its obligation in the amount of $8,000,000 under the loan agreement as consideration of its share purchase, and the loan agreement was terminated.

Assignment and Assumption Agreement

Transfer of Intellectual Property

Services Agreements

Sponsored Research Agreement

In June 2013, Luoxis entered into a sponsored research agreement with TRLLC, an entity controlled by Ampio’s director and Chief Scientific Officer, Dr. Bar-Or. The agreement, which was amended in September 2013 and provides for Luoxis to pay $6,000 per month to TRLLC in consideration for services related to research and development of Luoxis’ RedoxSYS system. In March 2014, Luoxis also agreed to pay a sum of $615,000 which is being amortized over the contractual term of 60.5 months and is divided between current and long-term on the balance sheet; this amount has been paid in full. This agreement is set to expire March 2019 and cannot be terminated prior to March 2017.

Review, Approval or Ratification of Transactions with Related Persons

Due to the small size of our company, we do not at this time have a formal written policy regarding the review of related party transactions, and rely on our full Board of Directors to review, approve or ratify such transactions and identify and prevent conflicts of interest. Our Board of Directors reviews any such transaction in light of the particular affiliation and interest of any involved director, officer or other employee or stockholder and, if applicable, any such person’s affiliates or immediate family members. Management aims to present transactions to our Board of Directors for approval before they are entered into or, if that is not possible, for ratification after the transaction has occurred. If our Board of Directors finds that a conflict of interest exists, then it will determine the appropriate action or remedial action, if any. Our Board of Directors approves or ratifies a transaction if it determines that the transaction is consistent with our best interests and the best interest of our stockholders.

106

DESCRIPTION OF OUR SECURITIES

General

We are authorized to issue up to 300,000,000 shares of common stock, no par value per share, and 5,000,000 shares of non-voting preferred stock, no par value per share.

As of April 16, 2015, a total of 173,597,365 shares of our common stock were issued and outstanding and no shares of our preferred stock were issued and outstanding. All of the outstanding and issued capital stock is, and will be, fully paid and non-assessable.

Common Stock

The holders of common stock are entitled to one vote per share. Our Articles of Incorporation does not provide for cumulative voting. The holders of our common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of legally available funds. Upon liquidation, dissolution or winding-up, the holders of our common stock are entitled to share ratably in all assets that are legally available for distribution. The holders of our common stock have no preemptive, subscription, redemption or conversion rights.

The rights, preferences and privileges of holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of any series of preferred stock, which may be designated solely by action of the Board of Directors and issued in the future.

Preferred Stock

Our Articles of Incorporation vests our Board of Directors with authority to divide the preferred stock into series and to fix and determine the relative rights and preferences of the shares of any such series so established to the full extent permitted by the laws of the State of Colorado and the Articles of Incorporation.

Holders of the preferred stock are not entitled to any voting rights.

Warrants

As of April 16, 2015, we have 465,250 outstanding warrants. Such warrants were originally issued by Luoxis in 2013 and were cancelled and exchanged for warrants to purchase shares of common stock of the Combined Company in connection with the Merger.

Options

Prior to the closing of the Merger, each of Vyrix and Luoxis had an option plan and had made equity grants thereunder. On April 16, 2015, upon the closing of the Merger, all equity compensation plans of Vyrix and Luoxis were terminated and all the awards granted thereunder were cancelled. See the section titled “Market Price of and Dividends on Our Common Stock and Related Stockholder Matters – Securities Authorized for Issuance under Equity Compensation Plans” for further information.

Registration rights

In connection with the Merger, we have agreed to file, as soon as is reasonably practicable, one registration statement to register for resale under the Securities Act as many shares of our common stock held by persons who are not affiliates of Ampio as we determine we can reasonably include with such registration statement.

Transfer Agent

The transfer agent of our common stock is Standard Registrar and Transfer Agency. Their business address is 673 Bluebird Lane Northeast, Albuquerque, NM 87122 and their telephone number is (505) 828-2839.

107

MARKET PRICE OF AND DIVIDENDS ON OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Market Information

Our common stock is quoted on the OTCQB under the symbol “RSWN.” The OTCQB is a regulated quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter equity securities. The OTCQB is a quotation medium for subscribing members, not an issuer listing service, and should not be confused with the NASDAQ, NYSE or any other national exchange.

As of April 16, 2015, immediately prior to the closing of the Merger, there were 19,435,402 shares of our common stock outstanding and held by 131 stockholders of record. We have no shares of preferred stock issued and outstanding.

Currently, there is only a very limited public market for our common stock on the OTCQB. You should also note that the OTCQB is not a listing service or exchange, but is instead a dealer quotation service for subscribing members. If our common stock is not quoted on the OTCQB or if a public market for our common stock does not develop, then investors may not be able to resell the shares of our common stock that they have purchased and may lose all of their investment. If we do establish a trading market for our common stock, the market price of our common stock may be significantly affected by factors such as actual or anticipated fluctuations in our operation results, general market conditions and other factors. In addition, the stock market has from time to time experienced significant price and volume fluctuations that have particularly affected the market prices for the shares of developmental stage companies, which may materially adversely affect the market price of our common stock. Accordingly, investors may find that the price for our securities may be highly volatile and may bear no relationship to our actual financial condition or results of operation.

The following table sets forth the range of high and low closing bid quotations for our common stock during our most recent two fiscal years on the OTCQB. The quotations represent inter-dealer prices without retail markup, markdown or commission, and may not necessarily represent actual transactions.


Fiscal Year ended August 31, 2014	High		Low
First Quarter	$	0.35	$	0.35
Second Quarter	$	0.50	$	0.35
Third Quarter	$	0.51	$	0.20
Fourth Quarter	$	0.20	$	0.17

Fiscal Year ended August 31, 2013	High		Low
First Quarter	$	0.70	$	0.70
Second Quarter	$	0.70	$	0.60
Third Quarter	$	0.35	$	0.25
Fourth Quarter	$	0.20	$	0.20

Dividend Policy

We have not paid any cash dividends on our common stock and our Board of Directors presently intends to continue a policy of retaining earnings, if any, for use in our operations. The declaration and payment of dividends in the future, of which there can be no assurance, will be determined by the Board of Directors in light of conditions then existing, including earnings, financial condition, capital requirements and other factors. The Colorado law prohibits us from declaring dividends where, if after giving effect to the distribution of the dividend:

108

•

we would not be able to pay our debts as they become due in the usual course of business; or

•

our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution.

Except as set forth above, there are no restrictions that currently materially limit our ability to pay dividends or which we reasonably believe are likely to limit materially the future payment of dividends on common stock.

Our Board of Directors has the right to authorize the issuance of preferred stock, without further stockholder approval, the holders of which may have preferences over the holders of our common stock as to payment of dividends.

Shares Eligible for Future Sale

As of April 16, 2015, there are 173,597,365 shares of our common stock outstanding, of which the former named executive officer of Rosewind beneficially own an aggregate of 2,340,569 shares. Of the outstanding shares of our common stock, only 201,152 shares are freely tradeable, without restriction, as of April 16, 2015.

Rule 144

In general, persons who have beneficially owned restricted ordinary shares for at least six months, and any affiliate of the company who owns either restricted or unrestricted ordinary shares, are entitled to sell their securities without registration with the SEC under an exemption from registration provided by Rule 144 under the Securities Act. A non-affiliated person who has beneficially owned restricted securities within the meaning of Rule 144 for at least one year would be entitled to sell those shares without regard to the provisions of Rule 144.

In general, a person who has beneficially owned restricted ordinary shares for at least six months would be entitled to sell their securities pursuant to Rule 144 under the Securities Act provided that (1) such person is not deemed to have been one of our affiliates at the time of, or at any time during the 90 days preceding, a sale and (2) we have been subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale. Such sale by non-affiliates must also comply with the current public information provision of Rule 144. Persons who have beneficially owned restricted ordinary shares for at least six months, but who are our affiliates at the time of, or at any time during the 90 days preceding a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of either of the following:

•

1.0% of the number of ordinary shares then outstanding, in the form of ADSs or otherwise, which will equal approximately ordinary shares immediately after the completion of the global offering based on the number of ordinary shares outstanding as of , 2015; and

•

the average weekly trading volume of the ADSs on NASDAQ during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale,

provided, in each case, that we have been subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale. Such sales by affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144.

Lock-Up Agreements

Ampio entered into a lock-up agreement with the Combined Company agreeing not to sell its shares in the Combined Company until they are released. Ampio’s lock-up agreement releases Ampio’s shares on the following schedule:

•

25% on April 16, 2017;

109

•

25% on October 16, 2017;

•

25% on April 16, 2018; and

•

all remaining shares are released on October 16, 2018.

Ampio’s lock-up agreement terminates upon a change-of-control event of either the Combined Company or Ampio.

Each of James Wiegand, a trust affiliated with Joshua Disbrow and a trust affiliated with Jarrett Disbrow entered into a lock-up agreement with the Combined Company agreeing not to sell its shares in the Combined Company until they are released. Each of their lock-up agreements releases its shares on the following schedule:

•

25% on June 30, 2015; and

•

all remaining shares are released on April 16, 2017.

Michael Wiegand entered into a lock-up agreement with the Combined Company agreeing not to sell his shares in the Combined Company agreeing not to sell his shares in the Combined Company until they are released. His lock-up agreement releases his shares on the following schedule:

•

25% as soon as Michael Wiegand may sell his shares without restriction under all applicable laws; and

•

all remaining shares on April 16, 2017.

Under his lock-up agreement Michael Wiegand has agreed that he is solely responsible for determining whether his shares are freely tradable and that the Combined Company makes no representations to him in that regard.

Each of the lock-up agreements for James Wiegand, the trust affiliated with Joshua Disbrow, the trust affiliated with Jarrett Disbrow and Michael Wiegand terminates upon a change-of-control event of the Combined Company.

Penny Stock

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. Our stock is currently a “penny stock.” The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the SEC, which: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form as the SEC shall require by rule or regulation. The broker-dealer also must provide to the customer, prior to effecting any transaction in a penny stock, (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement.

110

These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock as it is subject to these penny stock rules.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table sets forth certain information regarding the common stock that may be issued upon the exercise of options, warrants and other rights that have been or may be granted to employees, directors or consultants under our existing equity compensation plans, as of April 15, 2015. On April 16, 2015, upon the closing of the Merger, all equity compensation plans of Vyrix and Luoxis were terminated and all the awards granted thereunder were cancelled.


Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)		(b)		(c)
Equity compensation plans approved by security holders for Luoxis		2,835,000	$	1.19		2,165,000
Equity compensation plans approved by security holders for Vyrix		950,000	$	0.70		4,050,000
Equity compensation plans not approved by security holders		—	$	—		—
Total		3,785,000		1.07		6,215,000

111

RECENT SALES OF UNREGISTERED SECURITIES

Rosewind

On April 17, 2012, Rosewind issued Craig K. Olson 20,000 shares of our common stock in consideration of $3,000.

On May 6, 2012, Rosewind issued Ruth Harrison Revocable Trust 11,500 shares of our common stock in consideration of $1,725.

On October 23, 2012, Rosewind issued Katherine Gould 33,334 shares of our common stock in consideration for $5,000.

On June 24, 2013, Rosewind issued Sonja Gouak 8,000 shares of our common stock in exchange for services valued at $2,000.

On September 3, 2013, Rosewind issued Craig K. Olson 20,000 shares of our common stock in consideration for $3,000.

On March 17, 2014, Rosewind issued Ruth Harrison Revocable Trust 18,000 shares of our common stock in consideration for $2,700.

On March 19, 2014, Rosewind issued James B. Wiegand 600,000 shares of our common stock in consideration of cancelation of notes totaling $90,000.

On March 20, 2014, Rosewind issued Michael Wiegand 100,000 shares of our common stock in consideration of services valued at $15,000.

On May 8, 2014, Rosewind issued Larry Willis 100,000 shares of our common stock in consideration for $15,000.

On September 25, 2014, Rosewind issued Craig K. Olson 100,000 shares of our common stock in consideration of $15,000.

None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. The offers, sales and issuances of the securities described in this section were exempt from registration either (a) under Section 4(2) of the Securities Act in that the transactions were between an issuer and sophisticated investors and did not involve any public offering within the meaning of Section 4(2), (b) Rule 701 promulgated under the Securities Act in that the transactions were under compensatory benefit plans or contracts relating to compensation or (c) under Regulation S promulgated under the Securities Act in that offers, sales and issuances were not made to persons in the United States and no directed selling efforts were made in the United States. All recipients had adequate access, through their relationships with Rosewind to information about Rosewind. The sales of these securities were made without any general solicitation or advertising.

Reference is made to the disclosure set forth under Item 3.02 of this Current Report on Form 8-K regarding the issuance of shares of Rosewind’s common stock to former stockholders of Vyrix and Luoxis upon the closing of the Merger, which disclosure is incorporated herein by reference.

112

Vyrix

In November 2013, Vyrix issued 20,000,000 shares of its common stock to Ampio at a purchase price of $0.0001 per share, and in consideration of the transfer of certain intellectual property assets of Ampio.

Since inception, Vyrix has granted stock options to purchase 950,000 shares of its common stock at an exercise price of $0.70 per share to its officers and directors.

None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. The offers, sales and issuances of the securities described in this section were exempt from registration either (a) under Section 4(2) of the Securities Act in that the transactions were between an issuer and sophisticated investors and did not involve any public offering within the meaning of Section 4(2), (b) Rule 701 promulgated under the Securities Act in that the transactions were under compensatory benefit plans or contracts relating to compensation or (c) under Regulation S promulgated under the Securities Act in that offers, sales and issuances were not made to persons in the United States and no directed selling efforts were made in the United States. All recipients had adequate access, through their relationships with Vyrix, to information about Vyrix. The sales of these securities were made without any general solicitation or advertising.

Luoxis

In 2013, a total of 4,652,500 shares of Luoxis common stock were issued at $1.00 per share resulting in $4,653,000 of gross proceeds. Net proceeds were $3,980,000 after placement agent and legal fees. The placement agent also received 465,250 warrants to purchase Luoxis common stock valued at $313,000 in connection with the closing.

Since inception, Luoxis has granted stock options to purchase 2,835,000 shares of its common stock at an exercise price of $1.00—$1.60 per share to its officers and directors.

None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. The offers, sales and issuances of the securities described in this section were exempt from registration either (a) under Section 4(2) of the Securities Act in that the transactions were between an issuer and sophisticated investors and did not involve any public offering within the meaning of Section 4(2), (b) Rule 701 promulgated under the Securities Act in that the transactions were under compensatory benefit plans or contracts relating to compensation or (c) under Regulation S promulgated under the Securities Act in that offers, sales and issuances were not made to persons in the United States and no directed selling efforts were made in the United States. All recipients had adequate access, through their relationships with Luoxis, to information about Luoxis. The sales of these securities were made without any general solicitation or advertising.

113

INDEMNIFICATION OF OFFICERS AND DIRECTORS

Our Articles of Incorporation limit the liability of directors to the maximum extent permitted by Colorado law. Colorado law provides that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except liability for:

•

any breach of their duty of loyalty to the corporation or its stockholders;

•

acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

•

unlawful payments of dividends or unlawful stock repurchases or redemptions; or

•

any transaction from which the director derived an improper personal benefit.

Our Bylaws provide that we will indemnify our directors, officers, employees and other agents to the fullest extent permitted by law. We believe that indemnification under our Bylaws covers at least negligence and gross negligence on the part of indemnified parties. Our Bylaws also permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in connection with their services to us, regardless of whether our Bylaws permit such indemnification. We currently do not have directors’ and officers’ liability insurance, but we expect to have it in place within 60 days following this filing.

We intend to enter into separate indemnification agreements with each of our directors and executive officers.

There is no pending litigation or proceeding involving any of our directors or officers as to which indemnification is required or permitted, and we are not aware of any threatened litigation or proceedings that may result in a claim for indemnification.

Insofar as an indemnification for liabilities arising under the Securities Act may be permitted for directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC each indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Our directors and officers are indemnified by our Bylaws against amounts actually and necessarily incurred by them in connection with the defense of any action, suit or proceeding in which they are a party by reason of being or having been our directors or officers or of our subsidiaries. Our Articles of Incorporation provide that none of our directors or officers shall be personally liable for damages for breach of any fiduciary duty as a director or officer involving any act or omission of any such director or officer. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to such directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by such director, officer or controlling person in the successful defense of any action, suit or proceeding, is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

114

FINANCIAL STATEMENTS

Reference is made to the financial statements and pro forma financial information contained in Item 9.01 of this Current Report on Form 8-K, which is incorporated herein by reference.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL DISCLOSURE

Reference is made to the disclosure set forth in Item 4.01 of this Current Report on Form 8-K, which disclosure is incorporated herein by reference.

115

Item 3.02. Unregistered Sales of Equity Securities.

Reference is made to the disclosure set forth under Item 2.01 of this Current Report on Form 8-K, which disclosure is incorporated herein by reference. Upon the closing of the Merger, we issued 154,161,963 shares of our common stock to approximately 50 former stockholders of Vyrix and Luoxis in exchange for all of the outstanding shares of capital stock of Vyrix and Luoxis. The issuance and sale of such securities was not registered under the Securities Act, and such securities were issued in reliance upon an exemption from registration afforded by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder or under Regulation S promulgated under the Securities Act. In determining that the issuance of such securities qualified for an exemption under Section 4(a)(2) of the Securities Act, we relied on the following facts: the securities were issued to recipients that each represented that it was an “accredited investor” as defined in Rule 501 promulgated under the Securities Act, it was acquiring the securities for investment purposes and without a view toward disposition thereof, and it had sufficient investment experience to evaluate the risks of the investment; we used no advertising or general solicitation in connection with the issuance and sale of the securities; and the securities were issued as restricted securities.

Item 4.01. Changes in Registrant’s Certifying Accountant.

(a) Effective on April 16, 2015 and with the approval of our Board of Directors, we dismissed HJ & Associates, LLC, or HJ, as our independent registered public accounting firm engaged to audit our financial statements.

The report issued by HJ dated November 26, 2014 relating to its audits of our balance sheets as of August 31, 2014 and 2013, and the related statements of operations, changes in stockholders’ equity (deficit) and cash flows for each of the fiscal years then ended, contained an explanatory paragraph stating that there was substantial doubt about our ability to continue as a going concern. Other than as disclosed above, such reports did not contain an adverse opinion or disclaimer of opinion and were not qualified as to uncertainty, audit scope or accounting principles.

Our decision to dismiss HJ is not the result of any disagreement between us and HJ on matters of accounting principles or practices, financial statement disclosure or auditing scope or procedures. During our two most recent fiscal years, there were no disagreements with HJ on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of HJ, would have caused HJ to make a reference to the subject matter of the disagreement in connection with its reports. Pursuant to the rules of the SEC applicable to smaller reporting companies, HJ was not required to provide an attestation as to the effectiveness of our internal control over financial reporting for any period since our inception.

Other than as disclosed above, there were no reportable events (as that term is defined in Item 304(a)(1)(v) of Regulation S-K) during our two most recent fiscal years. Our Board of Directors discussed the subject matter referred to above with HJ. We authorized HJ to respond fully and without limitation to all requests of our successor accountant concerning all matters related to the annual and interim periods audited and reviewed by HJ, including with respect to the subject matter of any reportable event.

We provided HJ with a copy of the above disclosures it is making in response to Item 4.01 of this Current Report on Form 8-K and requested that HJ furnish a letter addressed to the SEC stating whether or not it agrees with the above statements, and, if not, stating the respects in which it does not agree. A copy of the letter dated April 22, 2015, is filed as Exhibit 16.1 to this Current Report on Form 8-K.

(b) Effective on April 16, 2015 and with the approval of our Board of Directors, we have engaged EKS&H LLLP, or EKS&H, as our new independent registered public accounting firm. EKS&H was engaged by Vyrix and Luoxis prior to the Merger to audit their financial statements for the years ended December 31, 2014 and 2013 and the related statements of operations, changes in stockholders’ deficit and cash flows for each of the years then ended and for the period through December 31, 2014, which are filed as Exhibit 99.1 to this Current Report on Form 8-K.

During our two most recent fiscal years and through the date of our engagement of EKS&H, neither we nor anyone on our behalf consulted with EKS&H regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered with respect to our financial statements, and no written report or oral advice was provided to us by EKS&H that was an important factor

116

considered by us in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a disagreement (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K promulgated under the Securities Act and the related instructions) or a reportable event (as that term is defined in Item 304(a)(1)(v) of Regulation S-K) relating to our company.

Item 5.01. Changes in Control of Registrant.

Reference is made to the disclosure set forth under Item 2.01 of this Current Report on Form 8-K, which disclosure is incorporated herein by reference.

Item 5.02. Departure of Directors or Certain Officer; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.

Effective upon the closing of the Merger on April 16, 2015, James B. Wiegand resigned from all his executive positions and the Board of Directors of our company. Following such resignation, the member of our Board of Directors that was elected in connection with the closing of the Merger, as described below, the individuals appointed as the executive officers of our company set forth under the heading “Management—Directors and Executive Officers” in Item 2.01 of this Current Report on Form 8-K.

For information regarding compensation of our director and executive officers, see the disclosure under the heading “Management” and “Related Party Transactions” in Item 2.01 of this Current Report on Form 8-K, which disclosure is incorporated herein by reference.

For information regarding our equity incentive plans, see the disclosure under the heading “Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters” in Item 2.01 of this Current Report on Form 8-K, which disclosure is incorporated herein by reference.

For certain biographical, related party and other information regarding our newly appointed executive officers, see the disclosure under the heading “Management” and “Related Party Transactions” in Item 2.01 of this Current Report on Form 8-K, which disclosure is incorporated herein by reference.

Effective upon the closing of the Merger, Michael Macaluso was elected to the Board of Directors of our company to serve until the next annual stockholder meeting or his earlier resignation or removal.

For information regarding compensation of our directors, see the disclosure under the heading “Management.”

See the disclosure under the heading “Security Ownership of Certain Beneficial Owners and Management” for information about the current beneficial ownership in our common stock of our director and executive officers.

No standing committees of our Board of Directors have been established and, as a result, no director is a member of any such committee. Because of Ampio’s substantial equity ownership interest, we have agreed to appoint additional Ampio designees to our Board of Directors.

For certain biographical, related party and other information regarding our newly appointed director, see the disclosure under the heading “Management” and “Related Party Transactions” in Item 2.01 of this Current Report on Form 8-K, which disclosure is incorporated herein by reference.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

Pursuant to the approval of our Board of Directors, our fiscal year end has been changed from August 31 to June 30. The Merger is being accounted for as a reverse acquisition, with Vyrix and Luoxis, collectively, regarded as the accounting acquirer. As a result, we filed with the this Form 8-K the financial statements of Vyrix and Luoxis as of the years ended December 31, 2014 and 2013, and commencing with the first periodic report we are to file under the Exchange Act, we intend to file annual and quarterly reports based on the June 30 fiscal year end. Such financial statements will depict the operating results of Vyrix and Luoxis.

117

Item 8.01. Other Events.

On April 16, 2015, the Combined Company issued a press release announcing that it had completed the Merger and the new management will host an investor conference call on Friday, April 24th, at 11:00am Mountain Time.

A copy of the press release is being furnished as Exhibit 99.3 to this Form 8-K and is incorporated by reference herein.

The information under this Item 8.01 and Exhibit 99.3 attached hereto is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired . In accordance with Item 9.01(a), the following are filed as exhibits to this Current Report on Form 8-K:

•

Audited financial statements of Vyrix and Luoxis for the years ended December 31, 2014 and 2013 are filed as Exhibit 99.1.

(b) Pro Forma Financial Information . In accordance with Item 9.01(b), the unaudited pro forma financial information of Rosewind and Vyrix and Luoxis, as of and for the fiscal year ended December 31, 2014 are filed as Exhibit 99.2 to this Current Report on Form 8-K.

(d) Exhibits . Reference is made to the Exhibit Index following the signature page of this Current Report on Form 8-K, which is incorporated herein by reference.

118

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX


E XHIBIT N O .		D ESCRIPTION OF E XHIBIT

2.1		Agreement and Plan of Merger among Rosewind, Luoxis, Vyrix, two major stockholders of Rosewind and two subsidiaries of Rosewind, dated as of April 16, 2015

2.2		Certificate of Merger

3.1		Articles of Incorporation, as amended

3.2		Bylaws (incorporated by reference to Exhibit 3.2 to the Registrant’s Form SB-2/A filed March 7, 2007; File No. 333-139933)

10.1†		Form of Indemnification Agreement, to be entered into between the Registrant and its directors and officers

10.2†		Employment Agreement between the Registrant and Joshua R. Disbrow, dated as of April 16, 2015

10.3†		Employment Agreement between the Registrant and Jarrett Disbrow, dated as of April 16, 2015

10.4#		Asset Purchase Agreement between the Registrant (as assigned to it by Ampio/Vyrix) and Valeant International (Barbados) SRL, effective as of December 2, 2011 (incorporated by reference to Exhibit 10.24 to Ampio’s Form 10-K filed February 9, 2012; File No. 001-35182)

10.5#		Manufacturing and Supply Agreement between the Registrant (as assigned to it by Ampio/Vyrix) and Ethypharm S.A., dated September 10, 2012 (incorporated by reference to Exhibit 10.2 to Ampio’s Form 10-Q filed November 2, 2012; File No. 001-35182)

10.6		License, Development and Commercialization Agreement between the Registrant (as assigned to it by Ampio/Vyrix) and Daewoong Pharmaceuticals Co., Ltd., effective as of August 23, 2011 (incorporated by reference to Exhibit 10.1 to Ampio’s Form 8-K/A filed October 5, 2011; File No. 001-35182)

10.7#		Distribution Agreement between the Registrant (as assigned to it by Ampio/Vyrix) and FBM Industria Farmaceutica, Ltda., dated as of March 1, 2012

10.8#		Distribution and License Agreement between the Registrant (as assigned to it by Ampio/Vyrix) and Endo Ventures Limited, dated April 9, 2014

10.9#		Sponsored Research Agreement between the Registrant (as assigned to it by Ampio/Luoxis) and Trauma Research LLC, dated September 1, 2009 (incorporated by reference to Exhibit 10.5 to Ampio Pharmaceuticals, Inc.’s Form 8-K/A filed March 17, 2010; File No. 333-146542)

10.10#		Addendum No. 4 to Sponsor Research Agreement between the Registrant (as assigned to it by Ampio/Luoxis) and Trauma Research LLC, dated March 17, 2014 (incorporated by reference to Exhibit 10.2 to Ampio Pharmaceuticals, Inc.’s Form 10-Q filed May 7, 2014; File No. 001-35182)

10.11		Promissory Note issued by Ampio to the Registrant on April 16, 2015

10.12		Subscription Agreement between the Registrant and Ampio, dated April 16, 2015



10.13		Voting Agreement between the Registrant and Ampio, dated April 21, 2015 (incorporated by reference to Exhibit 10.1 to Ampio’s Form 8-K filed April 22, 2015; File No. 001-35182)

16.1		Letter from HJ & Associates, LLC, dated April 22, 2015

99.1		Audited Combined Financial Statements of Vyrix and Luoxis, for the fiscal years ended December 31, 2014 and 2013

99.2		Pro Forma Financial Information giving effect to the acquisition of Vyrix and Luoxis

99.3		Press Release issued by the Registrant on April 16, 2015, furnished herewith

#	Application has been made to the Securities and Exchange Commission for confidential treatment of certain provisions. Omitted material for which confidential treatment has been requested has been filed separately with the Securities and Exchange Commission.

†	Indicates a management contract or any compensatory plan, contract or arrangement.

Exhibit 2.1

This Agreement and Plan of Merger (the “Agreement”) contains representations, warranties and covenants that: were made only for purposes of the Agreement and as of specific dates; were solely for the benefit of the parties to the Agreement; may be subject to limitations agreed upon by the parties to the Agreement, including being qualified by confidential disclosures made for the purposes of allocating contractual risk among the parties to the Agreement instead of establishing those matters as facts; and may be subject to standards of materiality applicable to the parties to the Agreement that differ from those applicable to investors. Rosewind’s shareholders and other investors are not third-party beneficiaries under the Agreement and should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of Rosewind or any of its subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Agreement, which subsequent information may or may not be fully reflected in public disclosures by Rosewind.

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this “ Agreement ”), dated as of April 16, 2015 is made by and among James B. Wiegand and Michael B. Wiegand (each, a “ Parent Major Stockholder ” and collectively, the “ Parent Major Stockholders ”), Rosewind Corporation, a Colorado corporation (“ Parent ”), Rosewind Merger Sub V, Inc., a Delaware corporation (“ Vyrix Merger Sub ”), Vyrix Pharmaceuticals, Inc., a Delaware corporation (“ Vyrix ”), Rosewind Merger Sub L, Inc., a Delaware corporation (“ Luoxis Merger Sub ” and, collectively with Vyrix Merger Sub, the “ Merger Subs ” and each, a “ Merger Sub ”), and Luoxis Diagnostics, Inc., a Delaware corporation (“ Luoxis ” and, collectively with Vyrix, the “ Companies ” and each, a “ Company ”).

WHEREAS , Parent has approved, and the respective Boards of Directors of Vyrix Merger Sub and Vyrix have adopted, approved and declared advisable, this Agreement and the merger of Vyrix Merger Sub with and into Vyrix with Vyrix surviving (the “ Vyrix Merger ”), on the terms and subject to the conditions provided for in this Agreement;

WHEREAS, Parent has approved, and the respective Boards of Directors of Luoxis Merger Sub and Luoxis have adopted, approved and declared advisable, this Agreement and the merger of Luoxis Merger Sub with and into Luoxis with Luoxis surviving (the “ Luoxis Merger ” and, collectively with the Vyrix Merger, the “ Mergers ” and each, a “ Merger ”), on the terms and subject to the conditions provided for in this Agreement;

WHEREAS , immediately following approval and adoption of this Agreement by the Board of Directors of Vyrix (the “ Vyrix Board ”), the holders of the outstanding voting securities of Vyrix will unanimously adopt and approve this Agreement and the Vyrix Merger as required under the General Corporation Law of the State of Delaware (the “ DGCL ”) and will execute and deliver an action by written consent evidencing the same (the “ Vyrix Stockholder Consent ”);

WHEREAS , immediately following approval and adoption of this Agreement by the Board of Directors of Luoxis (the “ Luoxis Board ”), the holders of a sufficient number of the outstanding voting securities of Luoxis will adopt and approve this Agreement and the Luoxis Merger as required under the DGCL and will execute and deliver an action by written consent evidencing the same (the “ Luoxis Stockholder Consent ” and, collectively with the Vyrix Stockholder Consent, the “ Company Stockholder Consents ” and each, a “ Company Stockholder Consent ”); and

WHEREAS , the Parent Major Stockholders, Parent, the Merger Subs and the Companies desire that each of the Mergers, taken together with the merger of the Surviving Corporations (as defined in Section 2.1(ii) ) with and into Parent, with Parent surviving (as described in Section 2.5(c) ), qualify as a tax-free reorganization under Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the “ Code ”).

NOW, THEREFORE , for and in consideration of the foregoing and the representations, warranties, covenants and agreements set forth in this Agreement, the Parties agree as follows:

ARTICLE 1

DEFINITIONS AND USAGE

Section 1.1 Defined Terms . For the purposes of this Agreement, the following terms have the meanings set forth below:

“ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person. For purposes of this definition, a Person is deemed to “control” an Entity if such Person, directly or indirectly: (i) has the power to direct the management or policies of such Entity; or (ii) owns, beneficially or of record (a) an amount of voting securities or other interests in such Entity that is sufficient to enable such Person to elect at least a majority of the members of such Entity’s Board of Directors or other governing body, or (b) at least fifty percent (50%) of the outstanding equity or financial interests of such Entity. The Parent Major Stockholders are deemed to be Affiliates of Parent.

“ Agreement ” has the meaning ascribed thereto in the Preamble.

“ Applicable Law ” means, with respect to any Person, any international, federal, state, local or foreign statute, code, ordinance, rule, regulation, consent, approval, judgment, Order, writ, decree, injunction or other authorization, treaty, convention, or governmental requirement of any Governmental Authority that is binding upon, or applicable to, such Person.

“ Assignment and Assumption Agreement ” means the Assignment and Assumption Agreement to be entered into on the Closing Date among the Companies and Parent, and to be consented to by Company Parent, in substantially the form of Exhibit F .

“ Business Day ” means any day other than a Saturday, Sunday or any day on which banks in the State of New York are authorized or required by federal law to be closed.

“ Claim ” means claims, demands, charges, complaints, actions, causes of action, suits, proceedings, hearings or administrative proceedings.

“ Code ” has the meaning ascribed thereto in the Recitals.

“ Companies Balance Sheet ” means the balance sheet of the Companies included in the Companies Financial Statements.

“ Company ” and “ Companies ” have the meaning ascribed to them in the Preamble.

“ Company Acquisition Proposal ” means any proposal for a merger or other business combination involving either of the Companies or for the acquisition of a substantial equity interest in either of them or any material part of the assets of either of them.

“ Company Board ” and “ Company Boards ” mean the Vyrix Board and the Luoxis Board, or either or both of them, as the context may require.

“ Companies Financial Statements ” means the unaudited, combined financial statements as at December 31, 2014 of the Companies.

“ Company Material Adverse Effect ” means a Material Adverse Effect with respect to either of the Companies.

“ Company Parent ” means Ampio Pharmaceuticals, Inc., a Delaware corporation.

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

“ Company Parent Stock Purchase ” means the purchase by Company Parent of Parent Common Stock from Parent at the Closing for (i) issuance to Parent by Company Parent of a promissory note in the principal amount of $10,000,000, (ii) Company Parent cancellation of indebtedness of Luoxis to Company Parent in the amount of $8,000,000 and (iii) Company Parent cancellation of indebtedness of Vyrix to Company Parent in the amount of $4,000,000, all on terms, and subject to conditions and documentation, satisfactory to each of Company Parent and Parent.

“ Company Stock ” means Vyrix Stock and Luoxis Stock, or either or both of them, as the context may require.

“ Company Stockholder Consent ” and “ Company Stockholder Consents ” have the meaning ascribed to them in the Recitals.

“ Consulting Agreement ” means the Consulting Agreement to be entered into at the Closing between Parent and James B. Wiegand substantially in the form of Exhibit D .

“ Contract ” means any agreement, arrangement, commitment or instrument, written or oral, including, any loan or credit agreement or other agreement evidencing Indebtedness, promissory note, bond, mortgage, indenture, guarantee, permit, lease, sublease, license, agreement to render services, or other agreement, arrangement, commitment or instrument evidencing rights or obligations of any kind or nature, including all amendments, modifications, supplements and options relating thereto.

“ DGCL ” has the meaning ascribed thereto in the Recitals.

“ Disclosure Letter ” and “ Disclosure Letters ” mean the Parent Disclosure Letter and the Company Disclosure Letter, or either or both of them, as the context may require.

“ Employment Agreement ” and “ Employment Agreements ” mean the employment agreements to be entered into at the Closing between Parent and each of Joshua Disbrow and Jarrett Disbrow, in substantially the form of Exhibit E , or either or both of them, as the context may require.

“ Entity ” means any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, limited liability company, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization or entity.

“ Environmental, Health and Safety Laws ” means any present or future Applicable Laws relating to (a) emissions, discharges, releases or threatened releases of Hazardous Materials into the environment, including into ambient air, soil, sediments, land surface or subsurface, buildings or facilities, surface water, groundwater, publicly-owned treatment works, or septic systems, (b) the generation, treatment, storage, disposal, use, handling, manufacturing, recycling, transportation or shipment of Hazardous Materials, (c) occupational health and safety, or (d) the pollution of the environment, solid waste handling, treatment or disposal, reclamation or remediation activities, or protection of environmentally sensitive areas.

“ Equity Interests ” means (a) with respect to a corporation, any and all shares, equity securities, interests, profit participations, stock appreciation rights, phantom stock plans or other equivalents (however designated) of corporate stock, including all common stock, preferred stock and other equity and voting interests, and warrants, options, calls, subscriptions or other convertible securities or other rights to acquire any of the foregoing, and (b) with respect to a partnership, limited liability company or similar Person, any and all units, membership or other interests, including rights to purchase, warrants, options, calls, subscriptions or other equivalents of, or other interests convertible into, any beneficial or legal ownership interest in such Person.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ GAAP ” means generally accepted accounting principles, as recognized by the U.S. Financial Accounting Standards Board (or any generally recognized successor).

“ Governmental Authority ” means (a) the United States of America, (b) any state, county, municipality, or other governmental subdivision within the U.S., (c) any court or any governmental department, commission, board, bureau, agency, or other instrumentality of the U.S. or of any state, county, municipality, water rights, taxing, or zoning authority, or other governmental subdivision within the U.S. and (d) any foreign government or agency having jurisdiction over any Party.

“ Hazardous Material ” means any chemical, pollutant, contaminant, material, waste or substance regulated by any Governmental Authority under Environmental, Health and Safety Law, including, but not limited to, any hazardous waste, hazardous substance, toxic substance,

radioactive material (including any naturally occurring radioactive material), asbestos-containing materials in any form or condition, polychlorinated biphenyls in any form or condition, or petroleum, petroleum hydrocarbons, petroleum products or any fraction or byproducts thereof.

“ Indebtedness ” of any Person means and includes any obligations consisting of (a) the outstanding principal amount of and accrued and unpaid interest on, and other payment obligations for, borrowed money, or payment obligations issued or incurred in substitution or exchange for payment obligations for borrowed money, (b) amounts owing as deferred purchase price for property or services, including “earn out” payments, (c) payment obligations evidenced by any promissory note, bond, debenture, mortgage or other debt instrument or debt security, (d) commitments or obligations by which such Person assures a creditor against loss, including contingent reimbursement obligations with respect to letters of credit, (e) payment obligations secured by a Lien, other than a Permitted Lien, on assets or properties of such Person, (f) obligations to repay deposits or other amounts advanced by and owing to third parties, (g) obligations under capitalized leases, (h) obligations under any interest rate, currency or other hedging agreement or derivatives transaction, (i) guarantees or other contingent liabilities with respect to any amounts of a type described in clauses (a) through (h) above, and (j) any change of control payments or prepayment premiums, penalties, charges or equivalents thereof with respect to any indebtedness, obligation or liability of a type described in clauses (a) through (i) above that are required to be paid at the time of, or the payment of which would become due and payable solely as a result of, the execution of this Agreement or the consummation of the transactions contemplated by this Agreement at such time, in each case determined in accordance with GAAP; provided, however , that Indebtedness shall not include accounts payable to trade creditors and accrued expenses arising in the ordinary course of business consistent with past practices and shall not include the endorsement of negotiable instruments for collection in the ordinary course of business.

“ Intellectual Property ” means all U.S. and foreign (a) patents and patent applications and all reissues, renewals, divisions, extensions, provisional patents, continuations and continuations in part thereof, (b) inventions (regardless of whether patentable), invention disclosures, trade secrets, proprietary information, industrial designs and registrations and applications, mask works and applications and registrations therefor, (c) copyrights and copyright applications and corresponding rights, (d) trade dress, trade names, logos, URLs, common law trademarks and service marks, registered trademarks and trademark applications, registered service marks and service mark applications, (e) domain name rights and registrations, (f) databases, customer lists, data collections and rights therein, and (g) confidentiality rights or other intellectual property rights of any nature, in each case throughout the world.

“ Knowledge ” means, with respect to any Person, the actual (but not constructive) knowledge of such Person or such Person’s officers after reasonable inquiry. With respect to Parent, “Knowledge” also includes the Knowledge of the Parent Major Stockholders and of the Merger Subs. With respect to each of the Companies, “Knowledge” includes the Knowledge of the other Company.

“ Lien ” means any lien, mortgage, security interest, indenture, deed of trust, pledge, deposit, restriction, burden, encumbrance, license, lease, sublease, right of first refusal, right of first offer, charge, privilege, easement, right of way, reservation, option, preferential purchase right, preemptive right, right of a vendor under any title retention or conditional sale agreement, or other arrangement substantially equivalent thereto, in each case regardless of whether relating to the extension of credit or the borrowing of money.

“ Lock-up Agreement ” and “ Lock-up Agreements ” mean (i) with respect to the Parent Major Stockholders, Lock-up Agreements substantially in the form of Exhibit B-1 , and (ii) with respect to Company Parent, a Lock-up Agreement substantially in the form of Exhibit B-2 , or any or all of them, as the context may require.

“ Luoxis ” has the meaning ascribed thereto in the Preamble.

“ Luoxis Board ” has the meaning ascribed thereto in the Recitals.

“ Luoxis Common Stock ” means common stock, $0.0001 par value per share, of Luoxis.

“ Luoxis Merger ” has the meaning ascribed thereto in the Recitals.

“ Luoxis Merger Sub ” has the meaning ascribed thereto in the Recitals.

“ Luoxis Merger Sub Board ” means the Board of Directors of Luoxis Merger Sub.

“ Luoxis Merger Sub Common Stock ” means the common stock of Luoxis Merger Sub, $0.001 par value per share.

“ Luoxis Preferred Stock ” means preferred stock, $0.0001 par value per share, of Luoxis.

“ Luoxis Stock ” means Luoxis Common Stock and Luoxis Preferred Stock, or either or both of them, as the context may require.

“ Luoxis Stockholder Consent ” has the meaning ascribed thereto in the Recitals.

“ Material Adverse Effect ” means, with respect to any of the Parties, any change, event, circumstance or effect whether or not such change, event, circumstance or effect is caused by or arises in connection with a breach of a representation, warranty, covenant or agreement of such Party or Parties in this Agreement or any of the Transaction Documents that is or is reasonably likely to be materially adverse to the business, assets (including intangible assets), capitalization, financial condition, operations or results of operations of such Party or Parties, except to the extent that any such change, event, circumstance or effect results from (i) changes in general economic conditions that do not have a disproportionate effect on such Party or (ii) changes affecting the industry generally in which such Party or Parties operate that do not have a disproportionate effect on such Party.

“ Merger ” and “ Mergers ” has the meaning ascribed to them in the Recitals.

“ Merger Sub ” and “ Merger Subs ” have the meaning ascribed to them in the Preamble.

“ Merger Sub Common Stock ” means Luoxis Merger Sub Common Stock and Vyrix Merger Sub Common Stock, or either or both of them, as the context may require.

“ Order ” means any order, writ, fine, injunction, decree, judgment, award or enforceable determination of any Governmental Authority.

“ Parent ” has the meaning ascribed thereto in the Preamble.

“ Parent Acquisition Proposal ” means any proposal for a merger or other business combination involving Parent or either of the Merger Subs or for the acquisition of a substantial equity interest in any of them or any material part of the assets of any of them.

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

“ Parent Common Stock ” means common stock, no par value per share, of Parent.

“ Parent Major Stockholder ” and “ Parent Major Stockholders ” have the meaning ascribed to them in the Preamble.

“ Parent Major Stockholder Indebtedness ” means all Indebtedness of Parent to James B. Wiegand.

“ Parent Major Stockholder Release ” and “ Parent Major Stockholder Releases ” mean, with respect to each of the Parent Major Stockholders, the release executed by such Parent Major Stockholder in substantially the form of Exhibit C , or either of both of them, as the context may require.

“ Parent Material Adverse Effect ” means a Material Adverse Effect with respect to any of Parent, the Merger Subs and the Parent Major Stockholders.

“ Parent Permitted Payables ” means all of the following, up to the aggregate amount of $25,000 and in each case as of the Closing Date: (i) accrued expenses of Parent, (ii) accounts payable of Parent not representing any out-of-pocket expenses, travel expenses or payments to Parent Major Stockholders or other holders of Parent Stock, (iii) Parent Major Stockholder Indebtedness and (iv) other Indebtedness of Parent.

“ Parent Preferred Stock ” means preferred stock, no par value per share, of Parent.

“ Parent Quarterly Report ” means the Quarterly Report on Form 10-Q of Parent for Parent’s fiscal quarter ended February 28, 2015.

“ Parent Stock ” means Parent Common Stock and Parent Preferred Stock, or either or both of them, as the context may require.

“ Party ” or “ Parties ” means, the Parent Major Stockholders, Parent, the Merger Subs and the Companies, or any or all of them, as the context may require.

“ Permitted Liens ” means (a) Liens for Taxes, assessments or other governmental charges or levies that are not yet due and payable or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established and described in the applicable Disclosure Letter, (b) Liens in connection with workmen’s compensation, unemployment insurance or other social security, old age pension or public liability obligations not yet due or which are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP have been established and described in the applicable Disclosure Letter, (c) operators’, vendors’, suppliers’, carriers’, warehousemen’s, repairmen’s, mechanics’, workmen’s, materialmen’s, or construction Liens (during repair or upgrade periods) or other like Liens arising by operation of Applicable Law in the ordinary course of business or statutory landlord’s Liens, each of which is in respect of obligations that have not been outstanding more than 90 days (so long as no action has been taken to file or enforce such Liens within said 90-day period) or which are being contested in good faith, or (d) any other Lien, encumbrance or other imperfection of title that does not materially affect the value or use of the property subject thereto or has been incurred in the ordinary course of business.

“ Person ” means any natural person or Entity.

“ Preamble ” means the preamble to this Agreement.

“ Recitals ” means the recitals to this Agreement.

“ SEC ” means the U.S. Securities and Exchange Commission.

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Securities Laws ” means the Securities Act, the Exchange Act, SOX, the Investment Company Act of 1940, the Investment Advisors Act of 1940, the Trust Indenture Act of 1939, each as amended, and the rules and regulations of any Governmental Authority promulgated thereunder.

“ SOX ” means the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated thereunder.

“ Subsidiary ” means, with respect to any Person, (a) any corporation of which such Person owns, either directly or through its Subsidiaries, more than 50% of the total combined voting power of all classes of voting securities of such corporation, or (b) any partnership, association, joint venture, limited liability company or other business organization, regardless of whether such business organization constitutes a legal entity, in which such Person directly or indirectly owns more than 50% of the total Equity Interests.

“ Tax ” or “ Taxes ” (including with correlative meaning, “ Taxable ”) means any federal, foreign, state or local tax, including any income, gross income, gross receipts, ad valorem, excise, sales, use, value added, admissions, business, occupation, license, franchise, margin, capital, net worth, customs, premium, real property, personal property, intangibles, capital stock, transfer, profits, windfall profits, severance, fuel, utility, payroll, social security, employment, withholding, disability, stamp, rent, recording, registration, alternative minimum, add-on

minimum, or other tax, assessment, duty, fee, levy or other governmental charge of any kind whatsoever imposed by a Governmental Authority (a “ Tax Authority ”), together with and including any and all interest, fines, penalties, assessments and additions to tax resulting from, relating to, or incurred in connection with any such tax or any contest or dispute thereof.

“ Tax Return ” means any report, return, document, declaration or other information (including any attached schedules and any amendments to such report, return, document, declaration or other information) required to be supplied to or filed with any Tax Authority with respect to any Tax, including an information return and any document with respect to or accompanying payments, deposits or estimated Taxes, or with respect to or accompanying requests for the extension of time in which to file any such report, return, document, declaration or other information.

“ Third Party ” means any Person other than any of the Parties and their respective Affiliates.

“ Transaction Documents ” means this Agreement, the Parent Disclosure Letter, the Company Disclosure Letter, the Employment Agreements, the Lock-up Agreements, the Parent Major Stockholder Releases, the Consulting Agreement, the Assignment and Assumption Agreement and any and all other documents and agreements entered into by any of the Parties in connection with the Merger and the other transactions contemplated hereunder.

“ Transfer Agent ” means Standard Registrar and Transfer Agency or any other transfer agent or trust company designated by the Companies prior to the Effective Time.

“ Vessel ” means the vessel “Six String” registered in the United States with official number 1092464.

“ Vessel Mortgage ” means the undocumented mortgage in favor of James B. Wiegand constituting a Lien against the Vessel as security for payment of the Parent Major Stockholder Indebtedness.

“ Vyrix ” has the meaning ascribed thereto in the Preamble.

“ Vyrix Board ” has the meaning ascribed thereto in the Recitals.

“ Vyrix Common Stock ” means common stock, $0.0001 par value per share, of Vyrix.

“ Vyrix Merger ” has the meaning ascribed thereto in the Recitals.

“ Vyrix Merger Sub ” has the meaning ascribed thereto in the Recitals.

“ Vyrix Merger Sub Board ” means the board of directors of Vyrix Merger Sub.

“ Vyrix Merger Sub Common Stock ” means the common stock of Vyrix Merger Sub, $0.001 par value per share.

“ Vyrix Preferred Stock ” means preferred stock, $0.0001 par value per share, of Vyrix.

“ Vyrix Stock ” means Vyrix Common Stock and Vyrix Preferred Stock, or either of both of them, as the context may require.

“ Vyrix Stockholder Consent ” has the meaning ascribed thereto in the Recitals.

Section 1.2 References and Titles .

(a) All references in this Agreement to Exhibits, Schedules, Articles, Sections, subsections and other subdivisions refer to the corresponding Exhibits, Schedules, Articles, Sections, subsections and other subdivisions of or to this Agreement, unless expressly provided otherwise. Titles appearing at the beginning of any Articles, Sections, subsections or other subdivisions of this Agreement are for convenience only, do not constitute any part of this Agreement, and shall be disregarded in construing the language hereof. The words “this Agreement,” “herein,” “hereby,” “hereunder” and “hereof,” and words of similar import, refer to this Agreement as a whole and not to any particular Article, Section, subsection or subdivision unless expressly so limited. The words “this Article” and “this Section,” and words of similar import, refer only to the Article, Section or subsection hereof in which such words occur.

(b) The word “or” is not exclusive, and the word “including” (in its various forms) means including without limitation. Pronouns in masculine, feminine or neuter genders shall be construed to state and include any other gender, and words, terms and titles (including terms defined herein) in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires.

(c) A reference in this Agreement to any statute shall be to such statute as amended from time to time, and the rules and regulations promulgated thereunder.

ARTICLE 2

THE MERGERS

Section 2.1 The Mergers .

(i) Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL, at the Effective Time Luoxis Merger Sub shall be merged with and into Luoxis, the separate corporate existence of Luoxis Merger Sub shall thereupon cease and Luoxis shall continue as the corporation surviving the Luoxis Merger (the “ Luoxis Surviving Corporation ”).

(ii) Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL, at the Effective Time Vyrix Merger Sub shall be merged with and into Vyrix, the separate corporate existence of Vyrix Merger Sub shall thereupon cease and Vyrix shall continue as the corporation surviving the Vyrix Merger (the “ Vyrix Surviving Corporation ” and, collectively with the Luoxis Surviving Corporation, the “ Surviving Corporations ” and each, a “ Surviving Corporation ”).

Section 2.2 Effective Time .

(i) Subject to the terms and conditions of this Agreement, the Luoxis Merger shall become effective upon the filing of a Certificate of Merger in respect thereof with the Secretary of State of the State of Delaware in substantially the form of Exhibit A-1 (the “ Luoxis Certificate of Merger ”) in accordance with Section 252 of the DGCL. Such time of filing the Luoxis Certificate of Merger is referred to in this Agreement as the “ Luoxis Effective Time .”

(ii) Subject to the terms and conditions of this Agreement, the Vyrix Merger shall become effective upon the filing of a Certificate of Merger in respect thereof with the Secretary of State of the State of Delaware in substantially the form of Exhibit A-2 (the “ Vyrix Certificate of Merger ” and, collectively with the Luoxis Certificate of Merger, the “ Certificates of Merger ” and each, a “ Certificate of Merger ”) in accordance with Section 252 of the DGCL. Such time of filing the Vyrix Certificate of Merger is referred to in this Agreement as the “ Vyrix Effective Time .”

(iii) The Parties agree that neither of the Certificates of Merger will be filed unless both of them will be filed. Subject to the terms and conditions of this Agreement, the Parties intend to file the Certificates of Merger simultaneously. Accordingly, the Luoxis Effective Time and the Vyrix Effective Time are referred to in this Agreement collectively as the “ Effective Time .”

Section 2.3 Closing . The closing of the Mergers (the “ Closing ”) shall occur at the Effective Time. The date of the Closing is referred to in this Agreement as the “ Closing Date .” The Closing shall occur at the offices of Goodwin Procter LLP, 620 Eighth Avenue, New York, New York 10018. At the Closing, all of the documents, certificates, agreements and instruments referenced in Article 7 will be executed and delivered as described in this Agreement. At the Effective Time, all actions taken at the Closing shall be deemed to be taken simultaneously.

Section 2.4 Effects of the Mergers .

(i) The Luoxis Merger shall have the effects set forth in this Agreement and the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all of the respective properties, rights, privileges, powers and franchises of Luoxis and Luoxis Merger Sub shall vest in the Luoxis Surviving Corporation, and all of the respective debts, liabilities and duties of Luoxis and Luoxis Merger Sub shall become the debts, liabilities and duties of the Luoxis Surviving Corporation.

(ii) The Vyrix Merger shall have the effects set forth in this Agreement and the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all of the respective properties, rights, privileges, powers and franchises of Vyrix and Vyrix Merger Sub shall vest in the Vyrix Surviving Corporation, and all of the respective debts, liabilities and duties of Vyrix and Vyrix Merger Sub shall become the debts, liabilities and duties of the Vyrix Surviving Corporation.

Section 2.5 Post-Closing Actions . The Parties intend that, as soon as is reasonably practicable after the Effective Time:

(a) Parent Board will increase the size of Parent Board by one (1) member and appoint the individual listed on Schedule 2.5(a) to fill the vacancy created by such increase, after which the Parent Major Stockholder member of Parent Board will resign from Parent Board;

(b) Parent will adopt a stock option plan approved by the Parent Board and Parent shall reserve up to 10,000,000 shares of Parent Common Stock for allocation among management and former holders of Luoxis Options and Vyrix Options pursuant to such stock option plan;

(d) Parent will conduct a reverse stock split of all outstanding shares of Parent Common Stock at a ratio, and on other terms, determined by the Parent Board;

(e) Parent will re-domicile as a Delaware corporation;

(f) Parent will adopt as its Certificate of Incorporation an amended and restated Certificate of Incorporation approved by the Parent Board and renaming Parent as Aytu Bioscience, Inc.;

(g) Parent will adopt as its Bylaws amended and restated Bylaws approved by the Parent Board; and

(h) the Parent Board will appoint as officers of Parent the individuals listed on Schedule 2.5(h) and will remove from office all other officers of Parent.

ARTICLE 3

MERGER CONSIDERATION AND

EFFECT OF THE MERGERS ON CAPITAL STOCK

Section 3.1 Effect on Capital Stock of Luoxis . At the Effective Time, by virtue of the Luoxis Merger and without any action on the part of the holder of any shares of capital stock of Luoxis or Luoxis Merger Sub:

(a) Conversion of the Luoxis Stock .

(i) Each share of Luoxis Merger Sub Common Stock outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into the right to receive one (1) share of common stock, $0.001 par value per share, of the Luoxis Surviving Corporation, so that at the Effective Time, Parent shall be the holder of all of the outstanding shares of the Luoxis Surviving Corporation; and

(ii) Each outstanding share, other than Dissenting Shares, of Luoxis Stock shall be converted into and represent the right to receive 2.685 (the “ Luoxis Exchange Factor ”) validly issued, fully paid and nonassessable shares of Parent Common Stock (the “ Luoxis Merger Consideration ”). No fractional shares of Parent Common Stock will be issued. All Luoxis Stock, including any treasury shares, shall no longer be outstanding and shall be automatically canceled and retired and shall cease to exist, and each holder of a certificate representing any shares of outstanding Luoxis Stock (the “ Luoxis Share Certificates ”) shall cease to have any rights with respect thereto, except (i) for all shares of outstanding Luoxis Stock other than Dissenting Shares, the right to receive the Luoxis Merger Consideration, without interest, and (ii) for Dissenting Shares, rights pursuant to Section 3.1(e) .

(b) Luoxis Treasury Shares . Each share of Luoxis Stock held in the treasury of Luoxis shall be cancelled in the Luoxis Merger and cease to exist. No Luoxis Merger Consideration shall be paid or payable in respect of any shares of Luoxis Stock held in the treasury of Luoxis.

(c) Luoxis Options. All options to purchase shares of Luoxis Stock, whether vested or unvested (the “ Luoxis Options ”), shall be cancelled without further action by the holder thereof. Prior to the Closing, Luoxis shall make cash payments to holders of Luoxis Options, the exercise price of which exceeds the per share value of Luoxis Common Stock (as determined by Luoxis), in consideration of the cancellation of such Luoxis Options, provided, that the aggregate of such cash payments, combined with the aggregate of cash payments in respect of Vyrix Options made pursuant to Section 3.2(c) , shall not exceed $30,000.

(d) Luoxis Warrants . All warrants to purchase shares of Luoxis Stock (the “ Luoxis Warrants ”), shall be cancelled and exchanged for warrants to purchase shares of Parent Common Stock (“ Parent Warrants ”) without further action by the holder thereof. Each Parent Warrant exchanged for a Luoxis Warrant shall constitute a warrant to acquire such number of shares of Parent Common Stock as is equal to the number of shares of Luoxis Stock subject to the unexercised portion of such Luoxis Warrant multiplied by the Luoxis Exchange Factor (with any fraction resulting from such multiplication to be rounded to the nearest whole number, and with 0.5 shares rounded upward to the nearest whole number). The exercise price per share of each such Parent Warrant shall be equal to the exercise price of such Luoxis Warrant prior to conversion divided by the Luoxis Exchange Factor.

(e) Shares of Dissenting Stockholders . Notwithstanding anything in this Agreement to the contrary, shares of Luoxis Stock that are outstanding immediately prior to the Effective Time and which are held by a stockholder who did not vote in favor of the Luoxis Merger (or consent thereto in writing) and who is entitled to demand and properly demands appraisal of such shares pursuant to, and who, in all respects, complies with the provisions of, Section 262 of the DGCL (“ Dissenting Shares ”), shall not be converted into or be exchangeable for the right to receive the Luoxis Merger Consideration, but instead each holder of Dissenting Shares (the “ Dissenting Stockholders ”), shall be entitled to payment of the fair value of such Dissenting Stockholder’s Dissenting Shares in accordance with the provisions of Section 262 of the DGCL (and at the Effective Time, such Dissenting Shares shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and such Dissenting Stockholder shall

cease to have any rights with respect thereto, except the right to receive the fair value of such Dissenting Shares in accordance with the provisions of Section 262 of the DGCL), unless and until such Dissenting Stockholder shall have failed to perfect or shall have effectively waived, withdrawn or lost rights to appraisal under the DGCL (or a court of competent jurisdiction shall determine that such Dissenting Stockholder is not entitled to the relief provided by Section 262 of the DGCL). If any Dissenting Stockholder shall have failed to perfect or shall have effectively waived, withdrawn or lost such right (or a court of competent jurisdiction shall determine that such Dissenting Stockholder is not entitled to the relief provided by Section 262 of the DGCL), such Dissenting Stockholder’s shares of Luoxis Stock shall thereupon be treated as if they had been converted into and become exchangeable for the right to receive, as of the Effective Time, the Luoxis Merger Consideration for each such share of Luoxis Stock, as provided herein, without any interest thereon.

Section 3.2 Effect on Capital Stock of Vyrix . At the Effective Time, by virtue of the Vyrix Merger and without any action on the part of the holder of any shares of capital stock of Vyrix or Vyrix Merger Sub:

(a) Conversion of the Vyrix Stock .

(i) Each share of Vyrix Merger Sub Common Stock outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into the right to receive one (1) share of common stock, $0.001 par value per share, of the Vyrix Surviving Corporation, so that at the Effective Time, Parent shall be the holder of all of the outstanding shares of the Vyrix Surviving Corporation; and

(ii) Each outstanding share of Vyrix Stock shall be converted into and represent the right to receive 1.5 (the “ Vyrix Exchange Factor ”) validly issued, fully paid and nonassessable shares of Parent Common Stock (the “ Vyrix Merger Consideration ” and, collectively with the Luoxis Merger Consideration the “ Merger Consideration ”). No fractional shares of Parent Common Stock will be issued. All Vyrix Stock, including any treasury shares, shall no longer be outstanding and shall be automatically canceled and retired and shall cease to exist, and each holder of a certificate representing any shares of outstanding Vyrix Stock (the “ Vyrix Share Certificates ” and, collectively with the Luoxis Share Certificates the “ Company Share Certificates ” and each, a “ Company Share Certificate ”) shall cease to have any rights with respect thereto, except for the right to receive the Merger Consideration, without interest.

(b) Vyrix Treasury Shares . Each share of Vyrix Stock held in the treasury of Vyrix shall be cancelled in the Vyrix Merger and cease to exist. No Vyrix Merger Consideration shall be paid or payable in respect of any shares of Vyrix Stock held in the treasury of Vyrix.

(c) Vyrix Options . All options to purchase shares of Vyrix Stock, whether vested or unvested (the “ Vyrix Options ”), shall be canceled without further action by the holder thereof. Prior to the Closing, Vyrix shall make cash payments to holders of Vyrix Options, the exercise price of which exceeds the per share value of Vyrix Common Stock (as determined by Vyrix), in consideration of the cancellation of such Vyrix Options, provided, that the aggregate of such cash payments, combined with the aggregate of cash payments in respect of Luoxis Options made pursuant to Section 3.1(c) , shall not exceed $30,000.

Section 3.3 Exchange of Company Share Certificates .

(a) Exchange Agent . Prior to the Effective Time, Parent shall designate the Transfer Agent to act as agent for the holders of Company Stock (the “ Exchange Agent ”) to receive in trust the Merger Consideration to which such holders become entitled hereunder. From time to time, Parent shall make available, or cause the applicable Surviving Corporation to make available, to the Exchange Agent certificates (or evidence of book-entry shares of Parent Common Stock) representing the aggregate number of shares of Parent Common Stock to be issued as Merger Consideration in exchange for Company Stock in amounts and at times necessary for the prompt payment of the Merger Consideration upon surrender of Company Share Certificates as provided herein.

(b) Exchange Procedure . As soon as is reasonably practicable after the Effective Time, the Exchange Agent (with respect to Company Stock) and Parent (with respect to Luoxis Warrants) shall mail to each holder of record of a Company Share Certificate or Luoxis Warrant a letter of transmittal in form satisfactory to the Companies specifying that delivery shall be effected, and risk of loss and title to Company Share Certificates or Luoxis Warrants, as applicable, shall pass, only upon delivery of Company Share Certificates or Luoxis Warrants, as applicable, to the Exchange Agent including instructions for surrendering of Company Share Certificates or Luoxis Warrants, as applicable, in exchange for the Merger Consideration or Parent Warrants, as applicable. Upon surrender of a Company Share Certificate or Luoxis Warrant, as applicable, to the Exchange Agent, together with such letter of transmittal, duly executed, and such other documents as may reasonably be required by the Exchange Agent, the holder of such Company Share Certificate or Luoxis Warrant, as applicable, shall be entitled to receive the Merger Consideration or Parent Warrants, as applicable, as provided herein and such Company Share Certificate or Luoxis Warrant, as applicable, shall be deemed canceled. In the event of a transfer of ownership of shares of Company Stock that is not registered in the transfer records of the applicable Company, payment may be made to a Person other than the Person in whose name the surrendered Company Share Certificate or Luoxis Warrant, as applicable, is registered, if such Company Share Certificate or Luoxis Warrant, as applicable, is properly endorsed or otherwise in proper form for transfer and the Person requesting such payment shall pay any transfer or other taxes required by reason of the payment of Merger Consideration or Parent Warrants, as applicable, to a Person other than the registered holder of such Company Share Certificate or Luoxis Warrant, as applicable, or establish to the satisfaction of the Surviving Corporation that such tax has been paid or is not applicable. Until surrendered as contemplated by this Section 3.3 , each Company Share Certificate or Luoxis Warrant, as applicable, shall be deemed at any time after the Effective Time to represent only the right to receive upon surrender the Merger Consideration or Parent Warrants, as applicable, without interest, which the shares of Company Stock or Luoxis Warrants, as applicable, theretofore represented by such Company Share Certificate or Luoxis Warrant, as applicable, shall have been entitled to receive pursuant to Section 3.1 or Section 3.2 , as applicable.

(c) No Further Ownership Rights; Transfer Books . The Merger Consideration or Parent Warrants, as applicable, paid upon surrender of Company Share Certificates or Luoxis Warrants, as applicable, in accordance with this Article 3 shall be deemed to have been paid in full satisfaction of all rights pertaining to the Company Stock theretofore represented by such Company Share Certificates or Luoxis Warrants, as applicable. At the Effective Time, the stock transfer books of each of the Companies shall be closed, and there shall be no further transfers of Company Stock or Luoxis Warrants. If, after the Effective Time, Company Share Certificates or Luoxis Warrants, as applicable, representing shares of Company Stock or Luoxis Warrants, as applicable, outstanding prior to the Effective Time, other than Dissenting Shares, are presented to Parent or the Surviving Corporation, such Company Share Certificates or Luoxis Warrants, as applicable, shall be canceled and exchanged for Merger Consideration or Parent Warrants, as applicable, in respect thereof pursuant to this Agreement in accordance with the procedures set forth herein.

(d) Lost, Stolen or Destroyed Certificates . In the event any Company Share Certificates representing shares of Company Stock outstanding prior to the Effective Time, other than Dissenting Shares, or Luoxis Warrants, have been lost, stolen or destroyed, the Exchange Agent shall pay to the holder thereof the Merger Consideration or Parent Warrants, as applicable, required pursuant to Section 3.1 or Section 3.2 , as applicable in exchange for such lost, stolen or destroyed Company Share Certificates or Luoxis Warrants, as applicable, upon the making of an affidavit of that fact by such holder with such assurances as the Exchange Agent in its discretion and as a condition precedent to the payment of the Merger Consideration or Parent Warrants, as applicable, may reasonably require of such holder.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

As an inducement for the Companies to enter into this Agreement, Parent, the Merger Subs and the Parent Major Stockholders hereby jointly and severally make the following representations and warranties to the Companies; provided, however , that such representations and warranties are subject to and qualified by the disclosure letter delivered by Parent to the Companies on the date hereof, each section of which qualifies the correspondingly numbered representation and warranty to the extent specified therein (the “ Parent Disclosure Letter ”), it being understood that (i) the disclosure of any fact or item in any Section of the Parent Disclosure Letter shall, should the existence of such fact or item be relevant to any other section, be deemed to be disclosed with respect to that other Section to the extent that such disclosure is made in a manner that makes its relevance to the other Section reasonably apparent and (ii) the disclosure of any matter or item in the Parent Disclosure Letter shall not be deemed to constitute an acknowledgement that such matter or item is required to be disclosed therein or is material to a representation or warranty set forth in this Agreement and shall not be used as a basis for interpreting the terms “material,” “materially,” “materiality,” “Parent Material Adverse Effect” or any word or phrase of similar import and does not mean that such matter or item, alone or together with any other matter or item, would constitute a Parent Material Adverse Effect.

Section 4.1 Corporate Existence; Good Standing; Corporate Authority .

(a) Parent .

(i) Parent is a corporation duly incorporated, validly existing and in good standing under the Applicable Laws of the State of Colorado. Parent is duly qualified to conduct business and is in good standing in each jurisdiction in which the ownership, operation or lease of its property or the nature of its business requires such qualification, except for jurisdictions in which any failures to be so qualified or to be in good standing, individually or in the aggregate, have not had or caused and could not reasonably be expected to have or cause a Parent Material Adverse Effect. Parent has all requisite corporate power and authority to own or lease and operate its properties and assets and to carry on its business as it is currently being conducted. Each of the Articles of Incorporation and Bylaws of Parent (the “ Parent Charter Documents ”) is in full force and effect, has not been amended or modified and has not been terminated, superseded or revoked. Parent is not in violation of the Parent Charter Documents.

(ii) The minute books of Parent provided to the Companies each contain true, correct and complete minutes and records of all meetings, proceedings and other actions of the stockholders of Parent, the Parent Board and committees of the Parent Board.

(b) Luoxis Merger Sub .

(i) Luoxis Merger Sub is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. Luoxis Merger Sub does not carry on any business or other operations. Each of the Certificate of Incorporation and Bylaws of Luoxis Merger Sub (the “Luoxis Merger Sub Charter Documents”) is in full force and effect, has not been amended or modified and has not been terminated, superseded or revoked. Luoxis Merger Sub is not in violation of the Luoxis Merger Sub Charter Documents.

(ii) The minute books of Luoxis Merger Sub provided to the Companies prior to the date of this Agreement each contain true, correct and complete minutes and records of all meetings, proceedings and other actions of the stockholders of Luoxis Merger Sub, the Luoxis Merger Sub Board and committees of the Luoxis Merger Sub Board.

(i) Vyrix Merger Sub is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. Vyrix Merger Sub does not carry on any business or other operations. Each of the Certificate of Incorporation and Bylaws of Vyrix Merger Sub (the “ Vyrix Merger Sub Charter Documents ” and, collectively with the Luoxis Merger Sub Charter Documents, the “ Merger Sub Charter Documents ”) is in full force and effect, has not been amended or modified and has not been terminated, superseded or revoked. Vyrix Merger Sub is not in violation of the Vyrix Merger Sub Charter Documents.

(ii) The minute books of Vyrix Merger Sub provided to the Companies prior to the date of this Agreement each contain true, correct and complete minutes and records of all meetings, proceedings and other actions of the stockholders of Vyrix Merger Sub, the Vyrix Merger Sub Board and committees of the Vyrix Merger Sub Board.

Section 4.2 Authorization, Validity and Effect of Agreement .

(a) Authority . Each of Parent and the Merger Subs has the requisite corporate power and authority to execute and deliver this Agreement and all other Transaction Documents to which it is, or is contemplated to become, a party, to perform its obligations hereunder and thereunder and to consummate the Mergers and all other transactions contemplated hereunder and thereunder. The execution, delivery and performance of this Agreement and the Transaction Documents and the consummation of the Mergers and the other transactions contemplated hereunder and thereunder have been duly authorized by all requisite corporate and stockholder action on behalf of Parent and the Merger Subs, and require no other corporate proceedings by Parent or the Merger Subs or action or approval by stockholders of Parent, except for the filing of the Certificates of Merger pursuant to the DGCL. Each of the Parent Board and the Merger Sub Boards, by unanimous written consents, (i) determined that this Agreement, the Transaction Documents to which Parent, or such Merger Sub, as applicable, is, or is contemplated to become, a party, the Mergers and the other transactions contemplated hereby and thereby are advisable, fair to and in the best interests of Parent and Parent’s stockholders, and each of the Merger Subs and Parent (as the sole stockholder of each of the Merger Subs), and (ii) approved this Agreement, such Transaction Documents, the Merger and the other transactions contemplated hereby and thereby.

(b) Binding Obligations . This Agreement and each of the Transaction Documents to which any of Parent and the Merger Subs is, or is contemplated to become, a party, have been or will at or before the Closing be duly executed by it and, assuming the due authorization, execution and delivery hereof and thereof by the Companies to the extent a party hereof and thereof, constitute its valid and legally binding obligations, enforceable against it in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other Applicable Laws relating to or affecting the rights and remedies of creditors generally and to general principles of equity (regardless of whether considered in a proceeding in equity or at law).

Section 4.3 Capitalization .

(a) Of Parent .

(i) Authorized and Outstanding Shares . The authorized capital stock of Parent consists of 300,000,000 shares of Parent Common Stock and 5,000,000 shares of Parent Preferred Stock. There are 19,435,402 shares of Parent Common Stock outstanding. The offer, issuance and sale of such outstanding shares of Parent Common Stock were (A) either made pursuant to a registration statement effective under the Securities Laws or exempt from the registration and prospectus delivery requirements of the Securities Act, (B) registered or qualified (or were exempt from registration or qualification) under the registration or qualification requirements of all applicable state securities laws and (C) accomplished in conformity with all other applicable Securities

Laws. None of such outstanding shares of Parent Common Stock are subject to a right of withdrawal or a right of rescission under any federal or state securities or “Blue Sky” law. The Parent Common Stock is eligible for registration under the Exchange Act. There are no shares of Parent Stock held in Parent’s treasury. There are no outstanding shares of Parent Preferred Stock. There are no outstanding options, warrants, convertible securities or similar rights to acquire Parent Stock (“ Parent Equity Rights ”) and no shares of Parent Stock are reserved for issuance in respect of Parent Equity Rights. There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to Parent Stock. All outstanding shares of Parent Common Stock are duly authorized, validly issued, fully paid and nonassessable, and free and clear of all Liens.

(ii) Other Equity Interests . Other than the outstanding shares of Parent Common Stock referenced in Section 4.3(a)(i) , Parent has not issued, sold, granted or delivered, and has no outstanding, Equity Interests, bonds, debentures, promissory notes or other Indebtedness, the holders of which have the right to vote with the stockholders of Parent on any matter, or which are convertible or exercisable for Equity Interests having the right to vote. Parent is not obligated to issue, sell, grant or deliver (or to cause to be issued, sold, granted or delivered), and is not party to any Contract or other obligation to issue, sell, grant or deliver, any Equity Interest (including, any securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind pursuant to which a Person is entitled to acquire an Equity Interest) of any nature or any additional shares of capital stock or any other Equity Interest in Parent.

(iii) Parent Equity Rights . There are no outstanding or authorized (i) contractual or other obligations of Parent to repurchase, redeem or otherwise acquire any Equity Interest of Parent or any Parent Equity Rights, or (ii) voting trusts or similar agreements to which Parent or any Parent Major Stockholder is a party with respect to voting of the capital stock of Parent.

(iv) Share Quotation . The shares of Parent Common Stock are quoted on the OTCQB Market under the symbol “RSWN”. Parent is in compliance in all material respects with all of the respective rules and regulations of OTC Markets, Inc. applicable to it and to the Parent Common Stock.

(v) No Orders, Proceedings or Investigations . No order suspending the effectiveness of any registration statement in respect of Parent Common Stock has been issued by the SEC and, to Parent’s Knowledge, no proceedings for that purpose have been initiated by the SEC. Parent is not, and has not ever been, and none of Parent’s past or present directors, officers, employees or Affiliates are, or have ever been, the subject of any civil, criminal or administrative proceeding or investigation by any Governmental Authority, including any such proceeding or investigation with respect to any alleged violation of any of the Securities Laws. None of Parent, the Merger Subs and the Parent Major Stockholders has any reason to believe that Parent or any of its officers, directors, employees or Affiliates will be the subject of any such proceeding or investigation.

(vi) Parent Stockholders . Section 4.3(a)(vi) of the Parent Disclosure Letter contains a true and complete list of the names of the record owners of all of the outstanding shares of Parent Common Stock and other Equity Interests of Parent, together with the number of securities held or to which such Person has rights to acquire. To Parent’s Knowledge, there is no voting trust, agreement or arrangement among any of the beneficial holders of Parent Common Stock affecting the nomination or election of directors or the exercise of the voting rights of Parent Common Stock.

(b) Of Luoxis Merger Sub.

(i) Authorized and Outstanding Shares . The authorized capital stock of Luoxis Merger Sub consists of 1,000 shares of Luoxis Merger Sub Common Stock. There are 100 shares of Luoxis Merger Sub Common Stock outstanding and no shares of Luoxis Merger Sub Common Stock are held in Luoxis Merger Sub’s treasury. There are no outstanding options, warrants, convertible securities or similar rights to acquire Luoxis Merger Sub Common Stock (“ Luoxis Merger Sub Equity Rights ”). There are no shares of Luoxis Merger Sub Common Stock reserved for issuance with respect to any Luoxis Merger Sub Equity Rights. There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to Luoxis Merger Sub Common Stock. All outstanding shares of Luoxis Merger Sub Common Stock are owned by Parent and are duly authorized, validly issued, fully paid and nonassessable, and free and clear of all Liens.

(ii) Other Equity Interests . Other than the outstanding shares of Luoxis Merger Sub Common Stock referenced in Section 4.3(b)(i) , Luoxis Merger Sub has not issued, sold, granted or delivered, and has no outstanding, Equity Interests, bonds, debentures, promissory notes or other Indebtedness, the holders of which have the right to vote with the stockholders of Luoxis Merger Sub on any matter, or which are convertible or exercisable for Equity Interests having the right to vote. Luoxis Merger Sub is not obligated to issue, sell, grant or deliver (or to cause to be issued, sold, granted or delivered), and is not party to any Contract or other obligation to issue, sell, grant or deliver, any Equity Interest (including, any securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind pursuant to which a Person is entitled to acquire an Equity Interest) of any nature or any additional shares of capital stock or any other Equity Interest in Luoxis Merger Sub.

(iii) Luoxis Merger Sub Equity Rights . There are no outstanding or authorized (i) contractual or other obligations of Luoxis Merger Sub to repurchase, redeem or otherwise acquire any Equity Interest of Luoxis Merger Sub or any Luoxis Merger Sub Equity Rights, or (ii) voting trusts or similar agreements to which Luoxis Merger Sub or Parent is a party with respect to voting of the capital stock of Luoxis Merger Sub.

(i) Authorized and Outstanding Shares . The authorized capital stock of Vyrix Merger Sub consists of 1,000 shares of Vyrix Merger Sub Common Stock. There are 100 shares of Vyrix Merger Sub Common Stock outstanding and no shares of Vyrix Merger Sub Common Stock are held in Vyrix Merger Sub’s treasury. There are no outstanding options, warrants, convertible securities or similar rights to acquire Vyrix Merger Sub Common Stock (“ Vyrix Merger Sub Equity Rights ” and, collectively with the Luoxis Merger Sub Equity Rights, the “ Merger Sub Equity Rights ”). There are no shares of Vyrix Merger Sub Common Stock reserved for issuance with respect to any Vyrix Merger Sub Equity Rights. There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to Vyrix Merger Sub Common Stock. All outstanding shares of Vyrix Merger Sub Common Stock are owned by Parent and are duly authorized, validly issued, fully paid and nonassessable, and free and clear of all Liens.

(ii) Other Equity Interests . Other than the outstanding shares of Vyrix Merger Sub Common Stock referenced in Section 4.3(c)(i) , Vyrix Merger Sub has not issued, sold, granted or delivered, and has no outstanding, Equity Interests, bonds, debentures, promissory notes or other Indebtedness, the holders of which have the right to vote with the stockholders of Vyrix Merger Sub on any matter, or which are convertible or exercisable for Equity Interests having the right to vote. Vyrix Merger Sub is not obligated to issue, sell, grant or deliver (or to cause to be issued, sold, granted or delivered), and is not party to any Contract or other obligation to issue, sell, grant or deliver, any Equity Interest (including, without limitation, any securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind pursuant to which a Person is entitled to acquire an Equity Interest) of any nature or any additional shares of capital stock or any other Equity Interest in Vyrix Merger Sub.

(iii) Vyrix Merger Sub Equity Rights . There are no outstanding or authorized (i) contractual or other obligations of Vyrix Merger Sub to repurchase, redeem or otherwise acquire any Equity Interest of Vyrix Merger Sub or any Vyrix Merger Sub Equity Rights, or (ii) voting trusts or similar agreements to which Vyrix Merger Sub or Parent is a party with respect to voting of the capital stock of Vyrix Merger Sub.

Section 4.4 Subsidiaries .

(a) Of Parent . Parent has no Subsidiaries other than the Merger Subs.

(b) Of Luoxis Merger Sub . Luoxis Merger Sub has no Subsidiaries.

Section 4.5 Compliance with Laws; Permits . Except for (x) matters relating to Taxes, which are treated exclusively in Section 4.10 , (y) matters relating to employment, which are treated exclusively under Section 4.11 and (z) matters arising under Environmental, Health and Safety Laws, which are treated exclusively in Section 4.13 :

(a) None of Parent and the Merger Subs is in material violation of any Applicable Law relating to the ownership or operation of any of its assets, and no Claim is pending or, to the Knowledge of Parent, threatened with respect to any such matters; and

(b) Each of Parent and the Merger Subs holds all permits, licenses, certifications, variations, exemptions, Orders, franchises, registrations, filings, approvals, authorizations or other required grant of operating authority required by any Governmental Authority necessary for the conduct of its business and the ownership or lease, as applicable, of its properties (the “ Parent Permits ”). All Parent Permits are in full force and effect and there exists no default thereunder or breach thereof. Parent has not received any notice and has no Knowledge (i) that any Parent Permit is being, is threatened to be, or will be, terminated, cancelled or reformed, (ii) that any Parent Permit will not be renewed or (iii) of any condition or requirement that must be satisfied or met in order for any Parent Permit to be renewed.

Section 4.6 No Conflict; Consents .

(a) No Conflict . The execution and delivery by each of Parent, the Merger Subs and the Parent Major Stockholders of this Agreement and the Transaction Documents to which it is, or is contemplated to become, a party, the performance of its obligations hereunder and thereunder and the consummation by it of the Mergers and the other transactions contemplated hereby and thereby in accordance with the terms hereof and thereof will not, as applicable, (i) conflict with or result in a breach of the Parent Charter Documents or the Merger Sub Charter Documents, (ii) violate, conflict with, result in a breach of any provision of, constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, impair its rights under, alter the rights or obligations of third parties under, result in the termination of or in a right of termination or cancellation of, give rise to a right of purchase under, or accelerate the performance required by, any Parent Contract or other Contract to which it is a party or by which any of its properties or assets are bound, (iii) result in the creation of any Lien (other than Permitted Liens) upon any of its properties or assets under any Parent Contract or other Contract to which it is a party or by which any of its properties or assets are bound, (iv) result in any Parent Contract or other Contract to which it is a party or by which any of its properties or assets are bound being declared void, voidable, or without further binding effect, or (v) contravene, conflict with or constitute a violation of any provision of any Applicable Law binding upon or applicable to it, other than any such violations, conflicts, breaches, defaults, impairments, alterations, terminations, cancellations, purchase rights, accelerations or Liens that, individually or in the aggregate, have not had or caused and could not reasonably be expected to have or cause a Parent Material Adverse Effect.

(b) Required Consents . Neither the execution and delivery by each of Parent and the Merger Subs of this Agreement and the other Transaction Documents to which it is, or is contemplated to become, a party, nor the consummation by it of the Mergers and the other transactions contemplated hereby and thereby in accordance with the terms hereof or thereof will require any consent, approval or authorization of, notice to or filing or registration with any Governmental Authority, other than the filing of the Certificates of Merger with the Secretary of State of the State of Delaware.

Section 4.7 SEC Documents . Parent has filed with the SEC all documents required to be so filed by it, pursuant to Sections 13(a), 14(a) and 15(d) of the Exchange Act (collectively, the “ Parent Reports ”). As of its respective date or, if amended by a subsequent filing prior to the date hereof, on the date of such filing, each Parent Report has complied in all material respects with all applicable requirements of the Exchange Act, SOX and the rules and

regulations promulgated thereunder, and did not (i) contain any untrue statement of a material fact or (ii) omit to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading. Each of the balance sheets included in or incorporated by reference into the Parent Reports (including the related notes and schedules) fairly presents in all material respects the financial position of Parent as of its date, and each of the statements of operations, cash flows and changes in stockholders’ equity included in or incorporated by reference into the Parent Reports (including any related notes and schedules) fairly presents in all material respects the results of operations, cash flows or changes in stockholders’ equity, as the case may be, of Parent for the periods set forth therein (such balance sheets and statements of operations, cash flows and changes in stockholders’ equity, each including the notes and schedules thereto, the “ Parent Financial Statements ”). The Parent Financial Statements (i) complied as to form in all material respects with the published rules and regulations of the SEC and (ii) were prepared in accordance with GAAP consistently applied during the periods involved, except as may be noted in the Parent Financial Statements or as permitted by Form 10-K, 10-Q or Form 8-K. Except as and to the extent adequately accrued or reserved against in the audited balance sheet of Parent as at August 31, 2014, Parent does not have any liability, indebtedness, expense, claim, deficiency, guaranty or obligation of any type or nature, whether accrued, absolute, contingent, matured, unmatured or otherwise, whether known or unknown and whether or not required by GAAP to be reflected in a balance sheet of Parent or disclosed in the notes thereto.

Section 4.8 Litigation . There is not now, nor has there ever been, any litigation, arbitration, mediation, action, suit, Claim, proceeding or investigation, whether legal or administrative, pending against any of Parent and the Merger Subs or, to Parent’s Knowledge, threatened against any of Parent and the Merger Subs or any of their respective assets, properties or operations, at Applicable Law or in equity, before or by any Governmental Authority or any Order of any Governmental Authority in respect of which the amount in contention exceeds $10,000 for any one matter or $25,000 in the aggregate. None of Parent, the Merger Subs and the Parent Major Stockholders is, or has ever been, the subject of any voluntary or involuntary bankruptcy or insolvency proceeding.

Section 4.9 Absence of Certain Changes . Since August 31, 2014, there has not been (a) any Parent Material Adverse Effect, (b) any event or occurrence that could reasonably be expected to have or cause a Parent Material Adverse Effect, (c) any material change by any of Parent and the Merger Subs in accounting or Tax methods, principles or practices, or (d) any declaration, setting aside or payment of any dividend or distribution in respect of any capital stock of any of Parent and the Merger Subs or any redemption, purchase or other acquisition of any of capital stock of any of Parent and the Merger Subs.

Section 4.10 Taxes .

(a) In all material respects:

(i) Each of Parent and the Merger Subs has filed, or has caused to be filed on its behalf, all Tax Returns required to be filed by or on behalf of it in the manner prescribed by Applicable Law. All such Tax Returns are complete and correct. Each of Parent and the Merger Subs has timely paid all Taxes due and owing, and, in accordance

with GAAP, the most recent Parent Financial Statements contained in the Parent Reports reflect a reserve (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) for all Taxes payable by any of Parent and the Merger Subs for all Taxable periods and portions thereof through the date of such Parent Financial Statements;

(ii) No Tax Return of any of Parent and the Merger Subs is under audit or examination by any Governmental Authority, and no written or, to the Knowledge of Parent, unwritten notice of such an audit or examination has been received by any of Parent and the Merger Subs. There is no assessed deficiency, refund litigation, proposed adjustment or matter in controversy with respect to any Taxes due and owing by any of Parent and the Merger Subs;

(iii) Since August 31, 2014, none of Parent and the Merger Subs has made or rescinded any election relating to Taxes or settled or compromised any Claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to any Taxes, or made any change to any of its methods of reporting income or deductions for federal income Tax purposes from those employed in the preparation of their most recently filed federal Tax Returns;

(iv) There are no agreements or other documents extending, or having the effect of extending, the period of assessment or collection of any material Taxes and no power of attorney with respect to any such Taxes has been executed or filed with any Tax Authority by or on behalf of any of Parent and the Merger Subs;

(v) Except for statutory Liens for Taxes not yet due, no Liens for Taxes exist with respect to any assets or properties of any of Parent and the Merger Subs;

(vi) Except for any agreements or arrangements (A) with customers, vendors, lessors or similar Persons entered into in the ordinary course of business, the principal purpose of which is not related to Tax, or (B) among Parent and the Merger Subs, none of Parent and the Merger Subs is a party to or bound by any Tax sharing agreement, Tax indemnity obligation or agreement or arrangement with respect to Taxes (including any advance pricing agreement, closing agreement or other agreement relating to Taxes with any Governmental Authority); and

(vii) Each of Parent and the Merger Subs has complied with all Applicable Law relating to the payment and withholding of Taxes and has, within the time and the manner prescribed by such Applicable Law withheld from and paid over to the proper Governmental Authorities all amounts required to be so withheld and paid over under Applicable Law.

(b) None of Parent and the Merger Subs knows of any fact, agreement, plan, or other circumstance, or has taken or failed to take any action, that could reasonably be expected to prevent either of the Mergers from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.

Section 4.11 Employment Matters .

(a) Parent has no employees other than James B. Wiegand.

(b) Neither of the Merger Subs has any employees.

(d) Neither the execution and delivery of this Agreement and the other Transaction Documents nor the consummation of the Mergers and the other transactions contemplated hereby and thereby will (either alone or in conjunction with any other event, such as termination of employment), result in, cause the accelerated vesting, funding or delivery of, or increase the amount or value of, any payment or benefit to any employee, officer or director of any of Parent and the Merger Subs; and

(e) There are no payments to be paid or payable (whether in cash, property or benefits, acceleration of payment of cash, property or benefits, or otherwise) by any of Parent, the Merger Subs and the Parent Major Stockholders in connection with this Agreement and the other Transaction Documents, the Mergers or the other transactions contemplated hereby and thereby that were or will be an “excess parachute payment” within the meaning of Section 280G of the Code.

Section 4.12 Labor Matters .

(a) Collective Bargaining . None of Parent and the Merger Subs is a party to, or bound by, any collective bargaining agreement or similar Contract, agreement or understanding with a labor union or similar labor organization. There are no organizational efforts with respect to the formation of a collective bargaining unit presently being made or threatened.

(b) Unfair Labor Practices . None of Parent and the Merger Subs has received any written complaint of any unfair labor practice or other unlawful employment practice or any written notice of any material violation of any federal, state or local statutes, Applicable Laws, ordinances, rules, regulations, Orders or directives with respect to the employment of individuals by it, or its employment practices, or the work conditions, terms and conditions of employment, wages or hours of its businesses. There are no unfair labor practice charges or other employee related complaints against any of Parent and the Merger Subs pending or threatened before any Governmental Authority by or concerning any employees working in its businesses. There is no labor dispute, strike, slowdown or work stoppage pending or threatened against any of Parent and the Merger Subs.

Section 4.13 Environmental Matters .

(a) Each of Parent and the Merger Subs has been and is in compliance with all applicable Environmental, Health and Safety Laws and possesses and is in compliance with any permits or licenses required under Environmental, Health and Safety Laws. To the Knowledge of Parent, there are no past or present facts, conditions or circumstances that interfere with or preclude, or could interfere with or preclude if known to a Governmental Authority, the respective businesses any of Parent and the Merger Subs as now conducted or which interfere with continued compliance with applicable Environmental, Health and Safety Laws.

(b) No proceedings or investigations of any Governmental Authority are pending or, to the Knowledge of Parent, threatened against any of Parent and the Merger Subs that allege the violation of or seek to impose liability pursuant to any Environmental, Health and Safety Laws, and, to the Knowledge of Parent, there are no past or present facts, conditions or circumstances at, on or arising out of, or otherwise associated with, any current (or, to the Knowledge of Parent, former) businesses, assets or properties of any of Parent and the Merger Subs, which constitute a material violation of Environmental, Health and Safety Laws or are reasonably likely to give rise to (i) costs, expenses, liabilities or obligations for any cleanup, remediation, disposal or corrective action under any Environmental, Health and Safety Laws, (ii) Claims arising for personal injury, property damage or damage to natural resources or (iii) fines, penalties or injunctive relief.

(c) None of Parent and the Merger Subs has (i) received any written notice of noncompliance with, violation of, or liability or potential liability under any Environmental, Health and Safety Laws or (ii) entered into or become subject to any consent decree, Order or agreement with any Governmental Authority or other Persons pursuant to any Environmental, Health and Safety Laws or relating to the cleanup of any Hazardous Materials.

Section 4.14 Intellectual Property . None of Parent and the Merger Subs owns, licenses or uses any Intellectual Property.

Section 4.15 Insurance . None of Parent and the Merger Subs has or maintains any insurance policy.

Section 4.16 Ownership and Condition of Assets; Operations .

(a) Of Parent .

(i) Parent (A) has good and marketable title to all the properties and assets (1) reflected in the Parent Financial Statements as being owned by Parent or (2) acquired after the date thereof which are material to Parent’s business (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business), free and clear of all Liens except Permitted Liens, and (B) is the lessee of all leasehold estates reflected in the Parent Financial Statements or acquired after the date thereof which are material to its business (except for leases that have expired by their terms since the date thereof) and is in possession of the properties purported to be leased thereunder, and each such lease is valid without default thereunder by the lessee or, to Parent’s Knowledge, the lessor.

(ii) Parent owns the Vessel free and clear of all Liens other than the Vessel Mortgage. There are no permits, licenses, registrations, recordings and Orders, of any kind, from, by or of any Governmental Authority or other organization or association relating to the Vessel (“ Vessel Permits ”), other than the Vessel’s United States Registration.

(iii) Parent (A) has never had or carried on any operations or activities, of any kind, other than those described in the Parent Reports, and (B) currently, neither has nor carries on any operations or activities of any kind, other than those described in the Parent Reports filed on and after November 26, 2014.

(b) Of the Merger Subs .

(i) Neither of the Merger Subs owns or leases any properties or assets.

(ii) Neither of the Merger Subs has, or has ever had, or carries on, or has ever carried on, any operations or activities of any kind.

Section 4.17 Undisclosed Liabilities .

(a) Of Parent .

(i) As of the date of this Agreement, Parent has no liabilities or obligations of any nature, regardless of whether fixed, accrued, contingent or otherwise, other than the Parent Permitted Payables.

(ii) The discontinuation of Parent’s current business at or before the Effective Time will not result in any Parent Material Adverse Effect.

(b) Of the Merger Subs . Neither of the Merger Subs has any liabilities or obligations of any nature, regardless of whether fixed, accrued, contingent or otherwise, including notes payable, accounts payable or other Indebtedness.

Section 4.18 Contracts .

(a) Of Parent . Section 4.18(a) of the Parent Disclosure Letter lists all Contracts to which Parent is a party or by which it or any of its property is bound, other than this Agreement and the other Transaction Documents (the “ Parent Contracts ”). All of the Parent Contracts are filed as exhibits to Parent Reports filed prior to the date of this Agreement. Each Parent Contract is in full force and effect. Parent has no knowledge of, and has received no notice of, any breach or violation of, or default under any Parent Contract. Parent has no Knowledge of any condition which, with the passage of time or the giving of notice, or both, would result in any breach or violation of, or default under, any Parent Contract. Parent has not received any notice of the desire of the other party or parties to any Parent Contract to exercise any rights to cancel, terminate or repudiate such Parent Contract or exercise remedies thereunder.

(b) Of the Merger Subs . Neither of the Merger Subs is party to any Contracts.

Section 4.19 No Brokers . None of Parent, the Merger Subs and the Parent Major Stockholders has entered into any Contract with any Person that may result in the obligation of any of Parent, the Merger Subs and any Parent Major Stockholder to pay any finder’s fees, brokerage, severance, change of control or other like payments in connection with this Agreement, the other Transaction Documents, the Mergers or the other transactions contemplated hereby and thereby, including to any Parent Major Stockholder or other stockholder of Parent.

Section 4.20 Improper Payments . (a) No funds, assets or properties of any of Parent, the Merger Subs and their respective Affiliates have been used or offered for illegal purposes; (b) no accumulation or use of any funds, assets or properties of any of Parent, the Merger Subs and their respective Affiliates has been made without being properly accounted for in its financial books and records; (c) all payments by or on behalf of any of Parent, the Merger Subs and their respective Affiliates have been duly and properly recorded and accounted for in its financial books and records and such books and records accurately and fairly reflect all transactions and dispositions of its assets; (d) Parent has devised and maintained systems that provide reasonable assurances that transactions are and have been executed in accordance with management’s general or specific authorization; (e) none of Parent, the Merger Subs and their respective Affiliates, or any of their respective directors, officers, agents, employees, other associated Persons or Persons acting on behalf of any of them, has (i) used any corporate funds for any unlawful contribution, gift, entertainment or payment of anything of value relating to political activity, (ii) made any direct or indirect unlawful payment to any employee, agent, officer, director, representative or stockholder of any Governmental Authority or political party, or official or candidate thereof, or any immediate family member of the foregoing or (iii) made any bribe, unlawful rebate, payoff, influence payment, kickback or other unlawful payment in connection with the conduct of the respective businesses of each of Parent, the Merger Subs and their respective Affiliates; (f) none of Parent, the Merger Subs and their respective Affiliates, or any of their respective agents received any bribes, kickbacks or other improper payments from vendors, suppliers or other Persons; and (g) Parent has no Knowledge that any payment made to any Person would be or has thereafter been offered, given or provided to any foreign official, political party or official thereof, or to any candidate for public office.

Section 4.21 No Ownership of the Company Stock . None of Parent, the Merger Subs, the Parent Major Stockholders and their respective Affiliates owns, directly or indirectly, any Company Stock or any securities convertible into or exercisable to acquire Company Stock.

Section 4.22 State Takeover Statutes . To Parent’s Knowledge, except for Section 203 of the DGCL (which has been rendered inapplicable), no “moratorium,” “control share,” “fair price” or other anti-takeover law or regulation is applicable to this Agreement, the other Transaction Documents, the Mergers or the other transactions contemplated hereby and thereby.

Section 4.23 Interested Party Transactions . No officer, director, stockholder or “associate” (as such term is defined in Rule 405 under the Securities Act) of any of Parent, the Merger Subs and their respective Affiliates, has or has had, either directly or indirectly, (a) an interest in any Person that (i) furnishes or sells services or products that are furnished or sold or are proposed to be furnished or sold by the Companies or Parent or (ii) purchases from or sells or furnishes to the Companies or Parent any goods or services, or (b) any beneficial interest in any Contract to which any of the Companies or Parent is a party or by which it may be bound or affected.

Section 4.24 Obligations to or by Stockholders . Parent has no liability or obligation or commitment to any holder of Parent Common Stock or any Affiliate or “associate” (as such term is defined in Rule 405 under the Securities Act) of any holder of Parent Common Stock, nor does any such holder or any such Affiliate or associate have any liability, obligation or commitment to Parent.

Section 4.25 Disclosure . There is no fact relating to any of Parent, the Merger Subs and the Parent Major Stockholders that Parent has not disclosed to the Companies in writing that has had or is currently having a Parent Material Adverse Effect or, insofar as any of Parent, the Merger Subs and the Parent Major Stockholders can now foresee, could reasonably be expected to have a Parent Material Adverse Effect. No representation or warranty by any of Parent, the Merger Subs and the Parent Major Stockholders herein, in any of the other Transaction Documents or in any of the other documents delivered by any of them to any of Company Parent, the Companies or their respective counsel, agents or representatives contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF THE COMPANIES

As an inducement for Parent, the Merger Subs and the Parent Major Stockholders to enter into this Agreement, the Companies hereby jointly and severally make the following representations and warranties to Parent, the Merger Subs and the Parent Major Stockholders; provided, however , that such representations and warranties are subject to and qualified by the disclosure letter delivered by the Company to Parent on the date hereof, each Section of which qualifies the correspondingly numbered representation and warranty or covenant to the extent specified therein (the “ Company Disclosure Letter ”), it being understood that (i) the disclosure of any fact or item in any section of the Company Disclosure Letter shall, should the existence of such fact or item be relevant to any other section, be deemed to be disclosed with respect to that other section to the extent that such disclosure is made in a manner that makes its relevance to the other Section reasonably apparent and (ii) the disclosure of any matter or item in the Company Disclosure Letter shall not be deemed to constitute an acknowledgement that such matter or item is required to be disclosed therein or is material to a representation or warranty set forth in this Agreement and shall not be used as a basis for interpreting the terms “material,” “materially,” “materiality,” “Company Material Adverse Effect” or any word or phrase of similar import and does not mean that such matter or item, alone or together with any other matter or item, would constitute a Company Material Adverse Effect.

Section 5.1 Corporate Existence; Good Standing; Corporate Authority .

(a) Each of the Companies is a corporation duly incorporated, validly existing and in good standing under the Applicable Laws of the State of Delaware. Each of the Companies is duly qualified to conduct business and is in good standing in each jurisdiction in which the ownership, operation or lease of its property or the nature of its business requires such qualification, except for jurisdictions in which any failures to be so qualified or to be in good standing, individually or in the aggregate, have not had or caused and could not reasonably be expected to have or cause a Company Material Adverse Effect. Each of the Companies has all requisite corporate power and authority to own or lease and operate its properties and assets and to carry on its business as it is currently being conducted. Each of the Certificate of

Incorporation and Bylaws of each of the Companies (the “ Company Charter Documents ”), is in full force and effect, has not been amended or modified and has not been terminated, superseded or revoked. Neither of the Companies is in violation of its Company Charter Documents.

(b) The respective minute books of each of the Companies provided to Parent prior to the date of this Agreement (to the extent requested by Parent) each contain true, correct and complete minutes and records of all meetings, proceedings and other actions of the stockholders of such Company, the Company Board of such Company and committees of the Company Board of such Company, if any, except where such would not have a Company Material Adverse Effect.

Section 5.2 Authorization, Validity and Effect of Agreements .

(a) Authority . Each of the Companies has the requisite corporate power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is, or is contemplated to become, a party, to perform its obligations hereunder and thereunder and to consummate the Mergers and all other transactions contemplated hereunder and thereunder. The execution, delivery and performance of this Agreement and the other Transaction Documents to which it is, or is contemplated to become, a party and the consummation of the Mergers and the other transactions contemplated hereunder and thereunder have been duly authorized by all requisite corporate action on behalf of each of the Companies, respectively, and no other corporate proceedings by either of the Companies are necessary to authorize the execution and delivery of this Agreement and the other Transaction Documents to which it is, or is contemplated to become, a party, or to consummate the Mergers and the other transactions contemplated hereunder and thereunder, except for the filing of the Certificates of Merger pursuant to the DGCL. Each of the Company Boards, by unanimous written consents, (i) determined that this Agreement, the Transaction Documents to which such Company is, or is contemplated to be, a party, the Mergers and the other transactions contemplated hereby and thereby are advisable, fair to and in the best interests of such Company and its stockholders, (ii) approved this Agreement and the Transaction Documents to which such Company is, or is contemplated to become, a party, the Mergers and the other transactions contemplated hereby and thereby, and (iii) resolved to recommend that such Company’s stockholders approve and adopt this Agreement, the Transaction Documents to which such Company is, or is contemplated to become, a party, the Mergers and the other transactions contemplated hereby and thereby.

(b) Binding Obligations . Each of this Agreement and the Transaction Documents to which either of the Companies is, or is contemplated to become, a party has been, or will be, duly executed by such Company and, assuming the due authorization, execution and delivery hereof and thereof by each of Parent, the Merger Subs and the Parent Major Stockholders party hereto and thereto, constitute the valid and legally binding obligations of such Company, enforceable against such Company in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other Applicable Laws relating to or affecting the rights and remedies of creditors generally and to general principles of equity (regardless of whether considered in a proceeding in equity or at law).

Section 5.3 Capitalization .

(a) Authorized and Outstanding Shares of Luoxis .

(i) The authorized capital stock of Luoxis consists of 60,000,000 shares of Luoxis Common Stock and 10,000,000 shares of Luoxis Preferred Stock. There are 24,652,500 outstanding shares of Luoxis Common Stock, no outstanding shares of Luoxis Preferred Stock, and no shares of Luoxis Stock held by Luoxis in its treasury. Section 5.3(d) of the Company Disclosure Letter sets forth a true, correct and complete list of all outstanding options, warrants, convertible securities or similar rights to acquire Luoxis Stock (collectively, the “ Luoxis Equity Rights ”), and the number of shares of Luoxis Stock reserved for future issuance in respect of Luoxis Equity Rights. There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to the Luoxis Stock. All outstanding shares of Luoxis Stock are, duly authorized, validly issued, fully paid and nonassessable shares, and free and clear of all Liens.

(ii) Section 5.3(a)(ii) of the Company Disclosure Letter contains a true and complete list of the names of the record owners, other than Company Parent, of all of the outstanding shares of Luoxis Stock and other Equity Interests in Luoxis (the “ Luoxis Minority Stockholders ”), together with the number of securities held or to which such Person has rights to acquire.

(b) Authorized and Outstanding Shares of Vyrix . The authorized capital stock of Vyrix consists of 60,000,000 shares of Vyrix Common Stock and 10,000,000 shares of Vyrix Preferred Stock. There are 20,000,000 outstanding shares of Vyrix Common Stock, no outstanding shares of Vyrix Preferred Stock, and no shares of Vyrix Stock held by Vyrix in its treasury. Section 5.3(d) of the Company Disclosure Letter sets forth a true, correct and complete list of all outstanding options, warrants, convertible securities or similar rights (collectively, the “ Vyrix Equity Rights ” and, together with the Luoxis Equity Rights, the “ Company Equity Rights ”) and the number of shares of Vyrix Stock reserved for future issuance in respect of Vyrix Equity Rights. There are no outstanding or authorized stock appreciation, phantom stock, profit participation or other similar rights with respect to Vyrix Stock. All outstanding shares of Vyrix Stock are duly authorized, validly issued, fully paid and nonassessable, and free and clear of all Liens.

(c) Other Equity Interests . Except as provided in Section 5.3(a) and Section 5.3(b) , neither of the Companies has issued, sold, granted or delivered, and neither of the Companies has any outstanding, Equity Interests, bonds, debentures, promissory notes or other Indebtedness, the holders of which have the right to vote with the stockholders of such Company on any matter or which are convertible or exercisable for Equity Interests having the right to vote. Neither of the Companies is obligated to issue, sell, grant or deliver (or to cause to be issued, sold, granted or delivered), nor is a party to any Contract or other obligation to issue, sell, grant or deliver, any Equity Interest (including any securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind pursuant to which a Person is entitled to acquire an Equity Interest) of any nature or any additional shares of capital stock or any other Equity Interest in such Company.

(d) Company Equity Rights . Section 5.3(d) of the Company Disclosure Letter sets forth a true, correct and complete list of all outstanding Company Equity Rights, including grantee name, exercise price (if any), vesting schedule and other vesting conditions to the extent not fully vested and expiration date. Since December 31, 2014 neither of the Companies has (i) granted, conferred or awarded any Company Equity Rights that will not be exercised, converted or terminated by their terms by the Effective Time, (ii) granted or issued any restricted stock or securities, or (iii) amended or otherwise modified any Company Equity Rights. There are no outstanding or authorized (i) contractual or other obligations of either of the Companies to repurchase, redeem or otherwise acquire any Equity Interest of such Company or any Company Equity Rights of such Company or (ii) voting trusts or similar agreements to which such Company is a party with respect to the voting of the capital stock of such Company, except repurchases, redemptions or acquisitions that would have an immaterial effect on such Company. At the Effective Time, all outstanding Company Equity Rights will be converted or exercised in accordance with Section 3.1 or Section 3.2 , as applicable, or otherwise terminated and of no further force or effect.

Section 5.4 Subsidiaries . The respective subsidiaries of each of the Companies are listed in Section 5.4 of the Company Disclosure Letter.

Section 5.5 Compliance with Laws; Permits . Except for such matters that, individually or in the aggregate, have not had or caused and could not reasonably be expected to have or cause a Company Material Adverse Effect, and except for (x) matters relating to Taxes, which are treated exclusively in Section 5.9 , (y) matters relating to employment, which are treated exclusively under Section 5.11 and (z) matters arising under Environmental, Health and Safety Laws, which are treated exclusively in Section 5.13 :

(a) Neither of the Companies is in violation of any Applicable Law relating to the ownership or operation of any of its assets and no Claim is pending or, to the Companies’ Knowledge, threatened with respect to any such matters;

(b) Each of the Companies holds all permits, licenses, certifications, variations, exemptions, Orders, franchises, registrations, filings, approvals, authorizations or other required grant of operating authority required by any Governmental Authority necessary for the conduct of its business and the ownership or lease, as applicable, of its properties (the “ Company Permits ”). All Company Permits are in full force and effect and there exists no default thereunder or breach thereof. Neither of the Companies has received any notice and has no Knowledge (i) that any Company Permit is being, is threatened to be, or will be, terminated, cancelled or reformed, (ii) that any Company Permit will not be renewed or (iii) of any condition or requirement that must be satisfied or met in order for any Company Permit to be renewed.

Section 5.6 No Conflict; Consents .

(a) No Conflict . The execution and delivery by each of the Companies of this Agreement and the Transaction Documents to which it is, or is contemplated to become, a party, the performance of the respective obligations of each of the Companies hereunder and thereunder and the consummation by each of the Companies of the Mergers and the other transactions contemplated hereby and thereby in accordance with the terms hereof and thereof

will not (i) conflict with or result in a breach of any provisions of its Company Charter Documents, (ii) violate, conflict with, result in a breach of any provision of, constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, impair its rights under, alter the rights or obligations of third parties under, result in the termination of or in a right of termination or cancellation of, give rise to a right of purchase under, or accelerate the performance required by, any Company Material Contract, (iii) result in the creation of any Lien (other than Permitted Liens) upon any of its properties or assets under any Company Material Contract, (iv) result in any Company Material Contract being declared void, voidable, or without further binding effect, or (v) contravene, conflict with or constitute a violation of any provision of any Applicable Law binding upon or applicable to it, other than any such violations, conflicts, breaches, defaults, impairments, alterations, terminations, cancellations, purchase rights, accelerations or Liens that, individually or in the aggregate, have not had or caused and could not reasonably be expected to have or cause a Company Material Adverse Effect.

(b) Required Consents . Neither the execution and delivery by each of the Companies of this Agreement or any of the Transaction Documents to which it is, or is contemplated to become, a party, nor the consummation by each of the Companies of the Mergers and the other transactions contemplated hereby and thereby in accordance with the terms hereof or thereof will require any consent, approval or authorization of, notice to or filing or registration with any Governmental Authority, other than the filing of the Certificates of Merger with the Secretary of State of the State of Delaware.

Section 5.7 Litigation . There is no litigation, arbitration, mediation, action, suit, Claim, proceeding or investigation, whether legal or administrative, pending against either of the Companies or, to the Companies’ Knowledge, threatened against either of the Companies or any of their assets, properties or operations, at Applicable Law or in equity, before or by any Governmental Authority or any Order of any Governmental Authority that, individually or in the aggregate, and taking into consideration the aggregate amounts reserved for any such matters in the Company Balance Sheets, has had or caused or could reasonably be expected to have or cause a Company Material Adverse Effect.

Section 5.8 Absence of Certain Changes . Since December 31, 2014, there has not been (a) any event or occurrence that has had or caused or could reasonably be expected to have or cause a Company Material Adverse Effect, (b) any material change by either of the Companies in accounting or Tax methods, principles or practices, or (c) any declaration, setting aside or payment of any dividend or distribution in respect of any capital stock of either of the Companies or any redemption, purchase or other acquisition of any capital stock of either of the Companies.

Section 5.9 Taxes .

(a) In all material respects:

(i) Each of the Companies has filed, or has caused to be filed on its behalf, all Tax Returns required to be filed by or on its behalf, in the manner prescribed by Applicable Law. All such Tax Returns are complete and correct. Each of the Companies has timely paid all Taxes due and owing, and, in accordance with GAAP, the

Companies Financial Statements reflect a reserve (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) for all Taxes payable by each of the Companies, respectively, for all Taxable periods and portions thereof through the date of the Companies Financial Statements;

(ii) No Tax Return of either of the Companies is under audit or examination by any Governmental Authority, and no written or, to the Companies’ Knowledge, unwritten notice of such an audit or examination has been received by either of the Companies. There is no assessed deficiency, refund litigation, proposed adjustment or matter in controversy with respect to any Taxes due and owing by either of the Companies;

(iii) Since December 31, 2014, neither of the Companies has made or rescinded any election relating to Taxes or settled or compromised any Claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to any Taxes, or made any change to any of its methods of reporting income or deductions for federal income Tax purposes from those employed in the preparation of its most recently filed federal Tax Returns;

(iv) There is no agreement or other document extending, or having the effect of extending, the period of assessment or collection of any material Taxes and no power of attorney with respect to any such Taxes has been executed or filed with any Governmental Authority by or on behalf of either of the Companies;

(v) Except for statutory Liens for Taxes not yet due, no Liens for Taxes exist with respect to any assets or properties of either of the Companies;

(vi) Except for any agreements or arrangements with customers, vendors, lessors or similar Persons entered into in the ordinary course of business, the principal purpose of which is not related to Tax, neither of the Companies is a party to or bound by any Tax sharing agreement, Tax indemnity obligation or agreement or arrangement with respect to Taxes (including any advance pricing agreement, closing agreement or other agreement relating to Taxes with any Tax Authority); and

(vii) Each of the Companies has complied with all Applicable Law relating to the payment and withholding of Taxes and has, within the time and the manner prescribed by any such Applicable Law, withheld from and paid over to the proper Governmental Authorities all amounts required to be so withheld and paid over under Applicable Law.

(b) Neither of the Companies know of any fact, agreement, plan, or other circumstance, or has taken or failed to take any action, that would reasonably be expected to prevent either of the Mergers from qualifying as a reorganization within the meaning of Section 368(a) of the Code.

Section 5.10 Financial Statements; No Undisclosed Liabilities .

(a) Section 5.10(a) of the Company Disclosure Letter includes true and complete copies of the Companies Financial Statements.

(b) The Companies Financial Statements (i) are correct and complete and have been prepared in accordance with the respective books and records of the Companies; (ii) have been prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated and consistent with each other (except as may be indicated in the notes thereto); and (iii) fairly present, in all material respects, the financial position, results of operations and cash flows of the Companies on a combined basis, as the case may be, as at the dates thereof and for the periods indicated therein, except as otherwise noted.

(c) Except as and to the extent adequately accrued or reserved against in the Companies Balance Sheet, neither of the Companies has any liability, indebtedness, expense, claim, deficiency, guaranty or obligation of any type or nature, whether accrued, absolute, contingent, matured, unmatured or otherwise, whether known or unknown and whether or not required by GAAP to be reflected in a balance sheet of the Companies on a combined basis or disclosed in the notes thereto, except for (i) liabilities and obligations, incurred in the ordinary course of business consistent with past practice since the date of the Companies Balance Sheet, that are not, individually or in the aggregate, material in amount, (ii) liabilities for performance under Company Material Contracts that do not exceed $250,000 individually or $1,500,000 in the aggregate, and (iii) liabilities described in Section 5.10(c) of the Company Disclosure Letter.

(d) The books of account and financial records of each of the Companies are true and correct and have been prepared and are maintained in accordance with GAAP.

(e) To the Knowledge of the Companies, the Companies Financial Statements are in the form, in all material respects, that will be filed, together with the report of the Companies’ auditors thereon, as audited financial statements with Parent’s Form 8-K as soon as is reasonably practicable after the Closing.

Section 5.11 Employment Matters .

(a) Section 5.11(a) of the Company Disclosure Letter contains a list of all the employee benefit plans maintained by either of the Companies (each a “ Company Benefit Plan ” and collectively, the “ Company Benefit Plans ”). To the extent applicable, the Company Benefit Plans comply in all material respects with the requirements of ERISA and the Code or with the Applicable Laws and regulations of any applicable jurisdiction. The Company Benefit Plans have been maintained and operated in compliance in all material respects with their terms. To the Companies’ Knowledge, there are no breaches of fiduciary duty in connection with the Company Benefit Plans for which the Company could be liable. There are no pending or, to the Companies’ Knowledge, threatened Claims against or otherwise involving any Company Benefit Plan that, individually or in the aggregate, have had or caused or could reasonably be expected to have or cause a Company Material Adverse Effect, and no suit, action or other litigation (excluding claims for benefits incurred in the ordinary course of the Company Benefit Plan activities) has been brought against or with respect to any such Company Benefit Plan for which

the applicable Company could be liable that, individually or in the aggregate, have had or caused or could reasonably be expected to have or cause a Company Material Adverse Effect. All material contributions required to be made as of the date hereof to the Company Benefit Plans have been made or have been properly accrued and are reflected in the Companies Financial Statements as of the date thereof.

(b) Neither of the Companies contributes to, or has an obligation to contribute to, and has not within six years prior to the Effective Time contributed to, or had an obligation to contribute to, or has any material liability, contingent or otherwise, with respect to, (i) a “multiemployer plan” within the meaning of Section 3(37) of ERISA, (ii) any plan that is covered by Title IV of ERISA, (iii) any plan subject to Section 412 of the Code or (iv) any plan funded by a “voluntary employees’ benefits association” within the meaning of Section 501(c)(9) of the Code.

(c) No Company Benefit Plan maintained by either of the Companies provides medical, surgical, hospitalization, death or similar benefits (regardless of whether insured) for employees or former employees of such Company for periods extending beyond their retirement or other termination of service other than coverage mandated by Applicable Law.

(d) All accrued material obligations of each of the Companies, whether arising by operation of Applicable Law, Contract, or past custom, for compensation and benefits, including, but not limited to, bonuses and accrued vacation, and benefits under the Company Benefit Plans, have been paid or adequate accruals for such obligations are reflected on the Companies Financial Statements as of the date thereof.

(e) Neither the execution and delivery of this Agreement and the other Transaction Documents to which it is, or is contemplated to become, a party, or the consummation of the Merger and the other transactions contemplated hereby and thereby will (either alone or in conjunction with any other event, such as termination of employment), result in, cause the accelerated vesting, funding or delivery of, or increase the amount or value of, any payment or benefit to any employee, officer or director of either of the Companies.

(f) Section 5.11(f) of the Company Disclosure Letter contains a description that is accurate and correct in all material respects, of all amounts estimated to be paid or payable (whether in cash, in property, or in the form of benefits, accelerated cash, property, or benefits, or otherwise) in connection with the transactions contemplated hereby (solely as a result thereof) that were or will be an “excess parachute payment” within the meaning of Section 280G of the Code.

(g) Each Company Benefit Plan which is or reasonably could be determined to be an arrangement subject to Section 409A of the Code has been operated in good faith compliance with Section 409A of the Code since each Company’s formation through a shared service with Company Parent, and has been, or may be, timely amended with the consent of the participant, if necessary, to comply in good faith with Section 409A of the Code and any applicable guidance, whether proposed or final, issued by the IRS with respect thereto.

(h) No Company Benefit Plan is a multiple employer plan within the meaning of Section 413(c) of the Code.

(i) No Company Benefit Plan that is not subject to ERISA has any material liabilities thereunder which are not otherwise fully funded, if applicable, or properly accrued and reflected under the Companies Financial Statements as of the date thereof.

Section 5.12 Labor Matters .

(a) Neither of the Companies is a party to, or bound by, any collective bargaining agreement or similar Contract, agreement or understanding with a labor union or similar labor organization. To the Companies’ Knowledge there are no organizational efforts with respect to the formation of a collective bargaining unit presently being made or threatened.

(b) Except for such matters that, individually or in the aggregate, have not had or caused and could not reasonably be expected to have or cause a Company Material Adverse Effect, (i) neither of the Companies has received any written complaint of any unfair labor practice or other unlawful employment practice or any written notice of any material violation of any federal, state or local statutes, Applicable Laws, ordinances, rules, regulations, Orders or directives with respect to the employment of individuals by, or the employment practices of, such Company, or the work conditions, terms and conditions of employment, wages or hours of its business, (ii) there are no unfair labor practice charges or other employee related complaints against either of the Companies pending or, to the Companies’ Knowledge, threatened before any Governmental Authority by or concerning the employees working in either of the Companies business, and (iii) there is no labor dispute, strike, slowdown or work stoppage against either of the Companies pending or, to the Companies’ Knowledge, threatened against either of the Companies.

Section 5.13 Environmental Matters . Except for such matters that, individually or in the aggregate, have not had or caused and could not reasonably be expected to have or cause a Company Material Adverse Effect:

(a) Each of the Companies has been and is in compliance with all applicable Environmental, Health and Safety Laws and possess and is in compliance with any permits or licenses required under Environmental, Health and Safety Laws. To the Companies’ Knowledge, there are no past or present facts, conditions or circumstances that interfere with or preclude, or could interfere with or preclude if known to a Governmental Authority, the conduct of any of the Companies’ respective businesses as now conducted or which interfere with continued compliance with applicable Environmental, Health and Safety Laws;

(b) No proceedings or investigations of any Governmental Authority are pending or, to the Companies’ Knowledge, threatened against either of the Companies that allege the violation of or seek to impose liability pursuant to any Environmental, Health and Safety Laws, and, to the Companies’ Knowledge, there are no past or present facts, conditions or circumstances at, on or arising out of, or otherwise associated with, any current (or, to the Companies’ Knowledge, former) businesses, assets or properties of either of the Companies, which constitute a material violation of Environmental, Health and Safety Laws or are

reasonably likely to give rise to (i) costs, expenses, liabilities or obligations for any cleanup, remediation, disposal or corrective action under any Environmental, Health and Safety Laws, (ii) Claims arising for personal injury, property damage or damage to natural resources, or (iii) fines, penalties or injunctive relief; and

(c) Neither of the Companies has (i) received any written notice of noncompliance with, violation of, or liability or potential liability under any Environmental, Health and Safety Laws or (ii) entered into or become subject to any consent decree, Order or agreement with any Governmental Authority or other Persons pursuant to any Environmental, Health and Safety Laws or relating to the cleanup of any Hazardous Materials.

Section 5.14 Intellectual Property . Except for such matters that, individually or in the aggregate, have not had or caused and could not reasonably be expected to have or cause a Company Material Adverse Effect, (a) the products, services and operations of each of the Companies does not infringe upon, violate or misappropriate the Intellectual Property of any Third Party, (b) each of the Companies owns or possesses valid licenses or other valid rights to use the Intellectual Property that it uses, exercises or exploits in, or that may be necessary or desirable for, its business as currently being conducted, free and clear of all Liens (other than Permitted Liens), and (c) to the Companies’ Knowledge, there is no infringement of any Intellectual Property owned by or licensed by or to either of the Companies. To the Companies’ Knowledge, there is no unauthorized use, disclosure, infringement or misappropriation of any Intellectual Property of either of the Companies by any Person, including, any employee or independent contractor (present or former) of either of the Companies that, individually or in the aggregate, has had or caused or could reasonably be expected to have or cause a Company Material Adverse Effect.

Section 5.15 Insurance . Section 5.15 of the Company Disclosure Letter sets forth a description of all material insurance policies maintained by either of the Companies.

Section 5.16 Ownership and Condition of Assets . Except as could not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, the Companies (i) have good and marketable title to all the properties and assets reflected in the Companies Financial Statements as being owned by the Companies or acquired after the date thereof which are material to the Companies’ business on a combined basis, to the extent applicable (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business), free and clear of all Liens except Permitted Liens, and (ii) are the lessee of all leasehold estates reflected in the Companies Financial Statements as leased by the Companies or acquired after the date thereof which are material to the Companies’ business on a combined basis, to the extent applicable (except for leases that have expired by their terms since the date thereof), and are in possession of the properties purported to be leased thereunder, and each such lease is valid without default thereunder by the lessee or, to Companies’ Knowledge, the lessor.

Section 5.17 Material Contracts . Section 5.17 of the Company Disclosure Letter lists all material Contracts to which either of the Companies is a party or by which they or any of their property is bound as of the date of this Agreement, other than this Agreement or any Transaction Document (the “ Company Material Contracts ”). As of the date of this Agreement, each of the Company Material Contracts is, to the Companies’ Knowledge, in full

force and effect. Except for such matters that, individually or in the aggregate, have not had or caused and could not reasonably be expected to have or cause a Company Material Adverse Effect, neither of the Companies knows of, or has received written notice of, any breach or violation of, or default under (nor, to the Companies’ Knowledge, does there exist any condition which with the passage of time or the giving of notice or both would result in such a violation or default under), any Company Material Contract, or has received written notice of the desire of the other party or parties to any such Company Material Contract to exercise any rights such party has to cancel, terminate or repudiate such Contract or exercise remedies thereunder.

Section 5.18 No Brokers; Investment Advisor . Neither of the Companies has entered into any Contract with any Person that may result in the obligation of such Company to pay any finder’s fees, brokerage or other like payments in connection with the negotiations leading to this Agreement, the other Transaction Documents, the Mergers or the other transactions contemplated hereby and thereby.

Section 5.19 Improper Payments . Except for such matters that, individually or in the aggregate, have not had or caused and could not reasonably be expected to have or cause a Company Material Adverse Effect: (a) no funds, assets or properties of any of the Companies and their respective Affiliates have been used or offered for illegal purposes; (b) no accumulation or use of any funds, assets or properties of any of the Companies and their respective Affiliates has been made without being properly accounted for in its financial books and records; (c) all payments by or on behalf of any of the Companies and their respective Affiliates have been duly and properly recorded and accounted for in its financial books and records and such books and records accurately and fairly reflect all transactions and dispositions of its assets; (d) each of the Companies has devised and maintained systems that provide reasonable assurances that transactions are and have been executed in accordance with management’s general or specific authorization; (e) none of the Companies and their respective Affiliates, or any of their respective directors, officers, agents, employees, other associated Persons or Persons acting on behalf of any of them, has (i) used any corporate funds for any unlawful contribution, gift, entertainment or payment of anything of value relating to political activity, (ii) made any direct or indirect unlawful payment to any employee, agent, officer, director, representative or stockholder of any Governmental Authority or political party, or official or candidate thereof, or any immediate family member of the foregoing or (iii) made any bribe, unlawful rebate, payoff, influence payment, kickback or other unlawful payment in connection with the conduct of the respective businesses of each of the Companies and their respective Affiliates; (f) none of the Companies and their respective Affiliates, or any of their respective agents has received any bribes, kickbacks or other improper payments from vendors, suppliers or other Persons; and (g) the Companies have no Knowledge that any payment made to a Person would be or has thereafter been offered, given or provided to any foreign official, political party or official thereof, or to any candidate for public office.

Section 5.20 State Takeover Statutes . To the Companies’ Knowledge, except for Section 203 of the DGCL (which has been rendered inapplicable), no “moratorium,” “control share,” “fair price” or other anti-takeover law or regulation is applicable to this Agreement, the other Transaction Documents, the Mergers or the other transactions contemplated hereby and thereby.

Section 5.21 Interested Party Transactions . To the Companies’ Knowledge, no officer, director, stockholder, or “associate” (as such term is defined in Rule 405 under the Securities Act) of any of the Companies and their respective Affiliates, has or has had, either directly or indirectly, (a) an interest in any Person that (i) furnishes or sells services or products that are furnished or sold or are proposed to be furnished or sold by the Companies or Parent or (ii) purchases from or sells or furnishes to the Companies or Parent any goods or services, or (b) any beneficial interest in any Contract to which any of the Companies or Parent is a party or by which it may be bound or affected.

Section 5.22 No Obligations to Stockholders . Neither of the Companies has any liability or obligation or commitment to any holder of its Company Stock or any Affiliate or “associate” (as such term is defined in Rule 405 under the Securities Act) of any holder of its Company Stock, nor does any such holder or any such Affiliate or associate have any liability, obligation or commitment to such Company, other than arm’s-length Contracts between such Company and Company Parent or any of Company Parent’s Affiliates.

Section 5.23 Disclosure . There is no fact relating to either of the Companies that the Companies have not disclosed to Parent in writing that has had or is currently having a Company Material Adverse Effect or, insofar as either of the Companies can now foresee, could reasonably be expected to have a Company Material Adverse Effect. No representation or warranty by either of the Companies herein, in any of the other Transaction Documents or in any of the other documents delivered by either them to any of Parent, the Merger Subs and the Parent Major Stockholders or their respective counsel, agents or representatives contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading.

ARTICLE 6

CONDUCT PENDING THE MERGERS

Section 6.1 Conduct of Business by the Companies Pending the Mergers . Prior to the Effective Time, unless Parent otherwise agrees in writing or as otherwise contemplated by this Agreement, each of the Companies:

(a) shall:

(i) conduct its business only in the ordinary course;

(ii) use its best efforts to preserve intact its business organization, to keep available the services of its present officers and key employees, and to preserve the good will of those having business relationships with it;

(iii) promptly advise Parent orally and in writing of any Company Acquisition Proposal and the substance thereof; and

(iv) immediately cease and terminate any existing activities, discussions, negotiations or Contract with any Person other than the other Parties with respect to any Company Acquisition Proposal; and

(b) shall not:

(i) directly or indirectly redeem, purchase or otherwise acquire any of its Company Stock;

(ii) amend its Company Charter Documents;

(iii) split, combine or reclassify any of its Company Stock or declare, set aside or pay any dividend payable in cash, stock or property or make any distribution with respect to any of its Company Stock;

(iv) issue any additional shares of its Company Stock or Company Equity Rights of such Company;

(v) acquire or dispose of any fixed assets or acquire or dispose of any other substantial assets other than in the ordinary course of business;

(vi) incur additional Indebtedness, or incur any other liabilities other than in the ordinary course of business;

(vii) enter into any Contract other than in the ordinary course of business;

(viii) dissolve, or merge or consolidate with or into any Person;

(ix) and shall not authorize any Person to, make, solicit, encourage any inquiries with respect to, or engage in any negotiations or enter into any Contract concerning, any Company Acquisition Proposal;

(x) enter into any new employment agreements with any of its officers or employees or grant any increases in the compensation or benefits of its officers and employees or amend any Company Benefit Plan of such Company; or

(xi) agree to do any of the foregoing.

Section 6.2 Conduct of Business by Parent Pending the Mergers . Prior to the Effective Time, unless the Companies otherwise agree in writing or as otherwise contemplated by this Agreement, Parent:

(a) shall:

(i) conduct its business only in the ordinary course;

(ii) continue to satisfy the filing requirements of the Exchange Act and all other requirements of applicable Securities Laws and of the OTC Bulletin Board;

(iii) promptly advise the Companies orally and in writing of any Parent Acquisition Proposal and the substance thereof; and

(iv) immediately cease and terminate any existing activities, discussions, negotiations or Contract with any Person other than the other Parties with respect to any Parent Acquisition Proposal; and

(b) shall not:

(i) directly or indirectly redeem, purchase or otherwise acquire any Parent Stock;

(ii) amend the Parent Charter Documents;

(iii) split, combine or reclassify any Parent Stock or declare, set aside or pay any dividend payable in cash, stock or property or make any distribution with respect to any Parent Stock;

(iv) issue any additional Parent Stock or Parent Equity Rights;

(v) acquire or dispose of any assets other than in the ordinary course of business, except for the transfer of the Vessel and the Vessel Permits to James B. Wiegand prior to the Closing Date, in consideration of a reduction in the outstanding balance of the Parent Major Stockholder Indebtedness in the amount of $27,000;

(vi) incur additional Indebtedness, or incur any other liabilities other than in the ordinary course of business;

(vii) enter into any Contract other than in the ordinary course of business;

(viii) dissolve, or merge or consolidate with or into any Person;

(ix) and shall not authorize any Person to, make, solicit, encourage any inquiries with respect to, or engage in any negotiations or enter into any Contract concerning, any Parent Acquisition Proposal;

(x) hire or terminate any employees, enter into any employment agreements with any of its officers or employees or grant any increases in the compensation or benefits of its officers and employees; or

(xi) agree to do any of the foregoing.

Section 6.3 Conduct of Business by the Merger Subs Pending the Merger . Prior to the Effective Time, unless the Companies otherwise agree in writing or as otherwise contemplated by this Agreement, each of the Merger Subs:

(a) shall:

(i) promptly advise the Companies orally and in writing of any Parent Acquisition Proposal and the substance thereof; and

(ii) immediately cease and terminate any existing activities, discussions, negotiations or Contract with any Person other than the other Parties with respect to any Parent Acquisition Proposal; and

(b) shall not:

(i) conduct any business or other operations;

(ii) directly or indirectly redeem, purchase or otherwise acquire any Merger Sub Common Stock;

(iii) amend its Merger Sub Charter Documents;

(iv) split, combine or reclassify any of its Merger Sub Common Stock or declare, set aside or pay any dividend payable in cash, stock or property or make any distribution with respect to any of its Merger Sub Common Stock

(v) issue any additional shares of its Merger Sub Common Stock or any Merger Sub Equity Rights in it;

(vi) acquire or dispose of any assets;

(vii) incur any Indebtedness or any other liabilities;

(viii) enter into any Contract;

(ix) dissolve, or merge or consolidate with or into any Person;

(x) and shall not authorize any Person to, make, solicit, encourage any inquiries with respect to, or engage in any negotiations or enter into any Contract concerning, any Parent Acquisition Proposal;

(xi) hire any employees; or

(xii) agree to do any of the foregoing.

Section 6.4 Actions by the Parent Major Stockholders Pending the Mergers . Prior to the Effective Time, unless the Companies otherwise agree in writing or as otherwise contemplated by this Agreement, each of the Parent Major Stockholders:

(a) shall:

(i) promptly advise the Companies orally and in writing of any Parent Acquisition Proposal and the substance thereof; and

(ii) immediately cease and terminate any existing activities, discussions, negotiations or Contract with any Person other than the other Parties with respect to any Parent Acquisition Proposal; and

(b) shall not:

(i) directly or indirectly acquire any Parent Stock or Merger Sub Common Stock;

(ii) vote or resolve to amend the Parent Charter Documents;

(iii) and shall not authorize any Person to, make, solicit, encourage any inquiries with respect to, or engage in any negotiations or enter into any Contract concerning, any Parent Acquisition Proposal; or

(iv) agree to do any of the foregoing.

ARTICLE 7

CONDITIONS TO PARTIES’ OBLIGATIONS

Section 7.1 Conditions to Parent, Merger Sub and Parent Major Stockholder Obligations . The obligations of Parent, the Merger Subs and the Parent Major Stockholders under this Agreement and the other Transaction Documents are subject to the fulfillment, at or prior to the Closing, of the following conditions, any of which may be waived in whole or in part by Parent:

(a) The representations and warranties of each of the Companies under this Agreement and the other Transaction Documents to which it is a party (i) shall have been true and correct as of the date of this Agreement, and (ii) shall be deemed to have been made again on the Closing Date and shall then be true and correct in all material respects.

(b) Each of the Companies shall have performed and complied in all material respects with all agreements and conditions required by this Agreement and the other Transaction Documents to which it is a party to be performed or complied with by it on or before the Closing Date.

(c) No action or proceeding before any Governmental Authority shall have been threatened, asserted or instituted to restrain or prohibit, or to obtain substantial damages in respect of, this Agreement or any of the other Transaction Documents or the carrying out of any of the Mergers and the other transactions contemplated hereby and thereby.

(d) Parent shall have received from each of the Companies a certificate of the Secretary of such Company certifying as to and attaching where applicable:

(i) copies of (A) the Company Stockholder Consent of such Company (B) resolutions of the Company Parent Board, and (C) resolutions of the Company Board of such Company, in each case, authorizing and approving the execution, delivery and performance of this Agreement and the other Transaction Documents to which such Company is a party and the consummation of the Mergers and the other transactions contemplated hereby and thereby;

(ii) the incumbency and signatures of the officers authorized to execute this Agreement and the other Transaction Documents to which such Company is a party;

(iii) the Certificate of Incorporation and By-laws of such Company and that there have been no changes in either of them since the date of this Agreement;

(iv) evidence as of a recent date of the good standing and corporate existence of such Company issued by the Secretary of State of the State of Delaware; and

(v) such additional supporting documentation and other information with respect to the Mergers and the other transactions contemplated hereby as Parent may reasonably request.

(e) All corporate and other proceedings and actions taken in connection with the transactions contemplated hereby and all certificates, opinions, agreements, instruments and documents mentioned herein or incident to any such transactions shall be reasonably satisfactory in form and substance to Parent, the Merger Subs and the Parent Major Stockholders. The Companies shall furnish to Parent such supporting documentation and evidence of satisfaction of any or all of the conditions specified in this Section 7.1 as Parent may reasonably request.

(f) Parent shall have received a certificate from an officer of Company Parent under Treasury Regulation Section 1.1445-2(b) stating that Company Parent is not a foreign person for purposes of Section 1445 of the Code.

Section 7.2 Conditions to the Companies’ Obligations . The obligations of the Companies under this Agreement and the other Transaction Documents are subject to the fulfillment, at or prior to the Closing, of the following conditions, any of which may be waived in whole or in part by the Companies:

(a) The representations and warranties of each of Parent, the Merger Subs and the Parent Major Stockholders under this Agreement and the Transaction Documents to which it is a party (i) shall have been true and correct as of the date of this Agreement, and (ii) shall be deemed to have been made again on the Closing Date and shall then be true and correct in all material respects.

(b) Each of Parent, the Merger Subs and the Parent Major Stockholders shall have performed and complied in all material respects with all agreements and conditions required by this Agreement and the other Transaction Documents to which it is a party to be performed or complied with by it on or before the Closing Date.

(d) Parent shall have no liabilities, indebtedness, expenses, claims, deficiencies, guaranties or obligations of any type or nature, whether accrued, absolute, contingent, matured, unmatured or otherwise, whether known or unknown and whether or not required by GAAP to be reflected in a balance sheet of Parent or disclosed in the notes thereto, other than the Parent Permitted Payables, and the Companies shall have received a certificate to that effect by the President and by the Secretary of Parent to that effect.

(e) The Companies shall have received a certificate by the President and by the Secretary of Parent certifying as to and attaching as applicable:

(i) copies of resolutions of (A) the Parent Board, (B) the Luoxis Merger Sub Board and (C) the Vyrix Merger Sub Board, in each case, authorizing and approving the execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the Mergers and the other transactions contemplated hereby and thereby;

(ii) copies of resolutions of the Parent Board authorizing and approving all actions necessary to appoint to the Parent Board at the Closing a director or directors chosen by the Companies;

(iii) the incumbency and signatures of the respective officers of each of Parent and the Merger Subs authorized to execute this Agreement and the other Transaction Documents to which it is a party;

(iv) the Parent Charter Documents and the Merger Sub Charter Documents and that there have been no changes in any of them since the date of this Agreement;

(v) evidence as of a recent date of the good standing and corporate existence of Parent issued by the Secretary of State of the State of Colorado;

(vi) evidence as of a recent date of the good standing and corporate existence of each of the Merger Subs issued by the Secretary of State of the State of Delaware;

(vii) that except for the filing of the Certificates of Merger, all consents, authorizations, orders and approvals of, and filings and registrations with any Governmental Authority that are required for the execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the Mergers and the other transactions contemplated hereby and thereby have been duly made or obtained;

(viii) that all material consents by third parties required for the Mergers have been obtained;

(ix) that since the date of this Agreement there has been no Parent Material Adverse Effect;

(x) that no action or proceeding before any Governmental Authority has been threatened, asserted or instituted to restrain or prohibit, or to obtain substantial damages in respect of, this Agreement, the other Transaction Documents or the consummation of any of the Mergers and the other transactions contemplated hereby and thereby;

(xi) that no severance, change of control or similar payments are due to any Person in connection with the consummation of either of the Mergers;

(xii) that all of the Parent Contracts have been terminated other than (A) Parent Contracts that have been assigned to one of the Parent Major Stockholders and (B) Parent Contracts with OTC Markets Group, Inc. or any of its Affiliates;

(xiii) the executed resignations of all directors and officers of each of Parent and the Merger Subs, with the director resignations to take effect on the Closing Date;

(xiv) copies of executed Lock-up Agreements from Company Parent and from each of the Parent Major Stockholders;

(xv) the amount of the Parent Permitted Payables;

(xvi) copies of all income Tax Returns of Parent that were required to be filed prior to the Closing Date, in form and substance satisfactory to the Companies; and

(xvii) such additional supporting documentation and other information with respect to the transactions contemplated hereby as the Companies may reasonably request.

(f) All corporate and other proceedings and actions taken in connection with the transactions contemplated hereby and all certificates, opinions, agreements, instruments and documents mentioned herein or incident to any such transactions shall be satisfactory in form and substance to the Companies. Each of Parent, the Merger Subs and the Parent Major Stockholders shall furnish to the Companies such supporting documentation and evidence of satisfaction of any or all of the conditions specified in this Section 7.2 as the Companies may reasonably request.

(g) Company Parent shall have made the Company Parent Closing Stock Purchase.

(h) Company Parent Board shall have approved this Agreement, the other Transaction Documents, the Mergers and the other transactions contemplated hereby and thereby.

(i) The Companies shall have received the executed Parent Major Stockholder Releases.

(j) The Companies shall have received the executed Consulting Agreement.

(k) The Companies shall have received the executed Employment Agreements.

(l) The Companies shall have received the executed Assignment and Assumption Agreement.

(m) The Companies shall have received the resignation of James B. Wiegand as a director of Parent and from all offices held by him with Parent.

(n) The Companies shall have received the resignation of Michael Wiegand from all positions of any kind held by him with Parent.

(o) Parent shall have filed the Parent Quarterly Report prior to the Closing, in form and substance satisfactory to the Companies.

(p) No action or proceeding before any Governmental Authority shall have been threatened, asserted or instituted to restrain or prohibit, or to obtain substantial damages in respect of, this Agreement or any of the other Transaction Documents or the carrying out of any of the Mergers and the other transactions contemplated hereby and thereby.

(q) The Vessel and the Vessel Permits shall have been transferred to James B. Wiegand, on terms and pursuant to documentation satisfactory to the Companies and in accordance with this Agreement.

ARTICLE 8

INDEMNIFICATION

Section 8.1 Indemnification by Parent Major Stockholders . The Parent Major Stockholders, jointly and severally, shall indemnify and hold harmless each of Company Parent and its officers, directors, employees and agents (the “ Indemnified Parties ” and each, an “ Indemnified Party ”), and shall reimburse the Indemnified Parties for, any loss, liability, claim, damage, expense (including, but not limited to, costs of investigation and defense and reasonable attorneys’ fees) or diminution of value (“ Damages ”) arising from or in connection with (a) any inaccuracy in any of the representations and warranties of any of Parent, the Merger Subs and the Parent Major Stockholders in this Agreement or any of the other Transaction Documents or in any certificate delivered by or on behalf of any of them pursuant hereto or thereto, or any actions, omissions or statements of fact inconsistent with any such representation or warranty, (b) any failure by any of Parent, the Merger Subs and the Parent Major Stockholders to perform or comply with any covenant or agreement made by it in this Agreement or any of the other Transaction Documents, (c) any Claim for brokerage or finder’s fees, severance payments, change of control payments, commissions or similar payments based upon any agreement or understanding made or alleged to have been made by or on behalf of any of Parent, the Merger Subs and the Parent Major Stockholders in connection with any of the Mergers and the other transactions contemplated by this Agreement and the other Transaction Documents, (d) Taxes attributable to any transaction or event occurring on or prior to the Effective Time, (e) any Claim relating to or arising out of any liabilities reflected in the latest Parent Financial Statements or with respect to accounting Fees arising after the date hereof (f) any litigation, action, Claim, proceeding or investigation by any Third Party relating to or arising out of the business or operations of any of Parent and the Merger Subs, or any actions of any of Parent, the Merger Subs, the Parent Major Stockholders and any holder of Parent Stock prior to the Effective Time.

Section 8.2 Survival . The representations and warranties set forth in Section 4.1 , Section 4.2 and Section 4.3 shall survive indefinitely. The representations and warranties set forth in Section 4.10 shall survive until sixty days after the expiration of the applicable statute of limitations. All other representations, warranties, covenants and agreements of each of Parent, the Merger Subs and the Parent Major Stockholders in this Agreement and the other Transaction Documents or in any certificate delivered pursuant hereto or thereto shall survive until the second anniversary of the Closing Date, provided, that such survival shall be indefinite in the event of any fraud, intentional misrepresentation or willful breach on the part of any of Parent, the Merger Subs and the Parent Major Stockholders.

Section 8.3 Time Limitations . Any of the Indemnified Parties seeking indemnification pursuant to Section 8.1 must notify the Parent Major Stockholders of its indemnification Claim on or before the later of the second anniversary of the Closing Date or the date on which the subject matter of the Claim ceases to survive pursuant to Section 8.2 .

Section 8.4 Effect of Investigation . The representations and warranties of each of Parent, the Merger Subs and the Parent Major Stockholders, and the rights of the Indemnified Parties to indemnification with respect thereto, shall not be affected or deemed waived by reason of any investigation made by or on behalf of any of the Indemnified Parties or by reason of the fact that any of the Indemnified Parties knew or should have known that any such representation or warranty is, was or might be inaccurate, or by reason of any waiver by any of the Indemnified Parties of any condition set forth in Section 7.2 .

Section 8.5 Effect of Qualification . For purposes of this Article 8 , any inaccuracy in or breach of any representation or warranty shall be determined without regard to any materiality, Material Adverse Effect or other similar qualification contained in or otherwise applicable to such representation or warranty.

Section 8.6 Limitation on Liability . The obligations of each of the Parent Major Stockholders to the Indemnified Parties set forth in Section 8.1 shall be subject to the following limitations:

(a) Neither of the Parent Major Stockholders shall be obligated to make any payment pursuant to this Article 8 until the aggregate Damages of the Indemnified Parties for the matters indemnified in Section 8.1 exceed $100,000.

(b) The aggregate liability of the Parent Major Stockholders to the Indemnified Parties under this Agreement other than for Claims (i) based on fraud, intentional misrepresentation or willful breach, (ii) for specific performance, injunctive or other equitable relief, or (iii) for breaches of the representations set forth in Section 4.1 , Section 4.2 and Section 4.3 shall be limited to the value of the shares of Parent Common Stock held by the Parent Major Stockholders immediately following the Effective Time. The Parties agree that the value of such shares is $1,300,000.

(c) Other than Claims (i) based on fraud, intentional misrepresentation or willful breach, (ii) for specific performance, injunctive or other equitable relief, or (iii) for breaches of the representations set forth in Section 4.1 , Section 4 .2 and Section 4.3 , the indemnity provided in this Article 8 shall be the sole and exclusive monetary remedy of the Indemnified Parties against Parent, the Merger Subs and the Parent Major Stockholders for any matter covered by Section 8.1 .

Section 8.7 Notice of Claims .

(a) To assert a Claim for indemnification pursuant to Section 8.1 , an Indemnified Party shall notify the Parent Major Stockholders of such Claim, stating in such notice (i) that an Indemnified Party incurred or reasonably believes it may incur Damages and the reasonable estimate of the amount of any such Damages; (ii) in reasonable detail, the facts alleged as the basis for such claim and the section or sections of this Agreement or other Transaction Document alleged as the basis or bases for the claim; and (iii) if the Damages have actually been incurred, amount of such Damages. If the Claim is for Damages which the Indemnified Parties reasonably believe may be incurred or are otherwise un-liquidated, the written Claim of the applicable Indemnified Party shall state the reasonable estimate of such Damages, in which event a Claim shall be deemed to have been asserted under this Article 8 in the amount of such estimated Damages.

(b) In the event that any action, suit or proceeding is brought against any Indemnified Party with respect to which the Parent Major Stockholders may have liability under this Article 8 , the Companies shall control the defense of such action, suit or proceeding. In connection with any action, suit or proceeding subject to this Article 8 , the Parent Major Stockholders and each Indemnified Party agree to render to each other such assistance as may reasonably be required in order to ensure proper and adequate defense of such action, suit or proceeding. Neither of the Parent Major Stockholders shall, without the prior written consent of the applicable Indemnified Party, which consent shall not be unreasonably withheld, settle or compromise any Claim or demand if such settlement or compromise does not include an irrevocable and unconditional release of such Indemnified Party for any liability arising out of such Claim or demand.

ARTICLE 9

TERMINATION PRIOR TO CLOSING

Section 9.1 Termination of Agreement . This Agreement may be terminated at any time prior to the Closing:

(a) by the mutual written consent of the Parties;

(b) by the Company, if any of Parent, the Merger Subs and the Parent Major Stockholders (i) fails to perform in any material respect any of its agreements contained in this Agreement or in any of the other Transaction Documents to which it is a party required to be performed by it on or prior to the Closing Date, or (ii) materially breaches any of its representations, warranties, covenants or agreements contained in this Agreement or in any of the other Transaction Documents to which it is a party, which failure or breach is not cured within ten (10) days after the Companies have notified Parent of their intent to terminate this Agreement pursuant to this Section 9.1(b) ;

(c) by Parent if either of the Companies (i) fails to perform in any material respect any of its agreements contained in this Agreement or in any of the other Transaction Documents to which it is a party required to be performed by it on or prior to the Closing Date or (ii) materially breaches any of its representations, warranties, covenants or agreements contained in this Agreement or in any of the other Transaction Documents to which it is a party, which failure or breach is not cured within ten (10) days after Parent has notified the Companies of its intent to terminate this Agreement pursuant to this Section 9.1(c) ;

(d) by either the Companies, on the one hand, or Parent, on the other hand, if there shall be any Order, writ, injunction or decree of any Governmental Authority binding on any of Parent, the Merger Subs, the Parent Major Stockholders or the Companies that prohibits or materially restrains it from consummating any of the Mergers and the other transactions contemplated by this Agreement and the other Transaction Documents; provided that the Parties have used their best efforts to have any such order, writ, injunction or decree lifted and the same has not been lifted within ninety (90) days after entry by any such Governmental Authority; and

(e) by either Parent, by notice to the Companies, or by the Companies, by notice to Parent, at any time after the date which is thirty (30) days after the date of this Agreement.

Section 9.2 Termination of Obligations . Termination of this Agreement pursuant to this Article 9 shall terminate all obligations of the Parties hereunder, except for the obligations under Section 10.12 , Section 10.14 and Section 10.15 ; provided , however , that termination pursuant to Section 9.1(b) or Section 9.1(c) shall not relieve the defaulting or breaching Party or Parties from any liability to the other Parties.

ARTICLE 10

MISCELLANEOUS

Section 10.1 Further Actions . Subject to the terms and conditions of this Agreement, each of the Parties agrees to execute and deliver any additional instruments or documents necessary to consummate the Mergers and the other transactions contemplated by this Agreement and the other Transaction Documents and to do any and all such further things as may be necessary to implement and carry out the intent of this Agreement, including any actions by James B. Wiegand necessary to transfer the Vessel and the Vessel Permits to James B. Wiegand in accordance with this Agreement.

Section 10.2 Amendment . This Agreement may be amended by the Parties at any time by mutual consent; provided , however , that no amendment may be made that by Applicable Law requires approval by any of the holders of Company Stock beyond the Company Stockholder Consents, without such further approval being obtained. This Agreement may not be amended except by a written instrument signed by an authorized representative of each of the Parties.

Section 10.3 Notices . Any notice or other communication required or permitted hereunder shall be in writing and, unless delivery instructions are otherwise expressly set forth above herein, either delivered personally (effective upon delivery), by email or facsimile transmission (effective on upon confirmation of after transmission), by recognized overnight delivery service (effective on the next day after delivery to the service), or by registered or certified mail, postage prepaid and return receipt requested (effective on the third Business Day after the date of mailing), at the following addresses or facsimile transmission numbers (or at such other address(es) or facsimile transmission number(s) for a Party as shall be specified by like notice):

To the Companies:

Ampio Pharmaceuticals, Inc.

373 Inverness Parkway, Suite 200

Englewood, Colorado 80112

Attention: Chief Financial Officer

Email: ggould@ampiopharma.com

with a copy (which shall not constitute notice) to:

Goodwin Procter LLP

620 Eighth Avenue

New York, New York 10018

Attention: Andrew Goodman. Esq.

Facsimile: (212) 355-3333

Email: AGoodman@goodwinprocter.com

To any of Parent, the Merger Subs and the Parent Major Stockholders:

Rosewind Corporation

16200 West County Road 18E

Loveland, Colorado 80537

Attention: Mr. James B. Wiegand

Email: shellgamer@aol.com

with a copy (which shall not constitute notice) to:

Roger V. Davidson, Esq.

2540 Westward Dr.

Lafeyette, Colorado 80026

Email: rogetd@comcast.com

Section 10.4 Counterparts; Facsimile Signature . This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart. This Agreement may be executed by facsimile signature and a facsimile signature shall constitute an original for all purposes.

Section 10.5 Severability . Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be deemed modified to the minimum extent necessary to make such term or provision valid and enforceable; provided that if such term or provision is incapable of being so modified, then such term or provision shall be deemed ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

Section 10.6 Entire Agreement; No Third Party Beneficiaries . This Agreement and the other Transaction Documents constitute the entire agreement, and supersede all other prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter hereof and are solely for the benefit of the Parties and their respective successors, legal representatives and assigns and does not confer on any Person other than the Parties any rights or remedies hereunder. The Indemnified Parties are third party beneficiaries of this Agreement to the extent of the rights accorded to them in Article 8 . The representations, warranties, covenants and other agreements in this Agreement are the product of negotiations among the Parties and are for the sole benefit of the Parties and the Indemnified Parties. Any inaccuracies in such representations, warranties, covenants or agreements are subject to waiver by the Party for whose benefit such representation, warranty, covenant or agreement was made, in accordance with Section 10.8 without notice of liability to any other Person.

Section 10.7 Assignment . Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the Parties (whether by operation of Applicable Law or otherwise) without the prior written consent of the other Parties, and any such attempted assignment without such consent shall be immediately null and void. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and assigns.

Section 10.8 Waivers . At any time prior to the Effective Time, to the extent legally allowed: (a) any Party may extend the time for the performance of any of the obligations or other acts of the other Parties, (b) any Party for whose benefit a representation or warranty was made may waive any inaccuracies in the representations and warranties of the other Parties contained herein or in any document delivered pursuant hereto, and (c) any Party may waive performance of any of the covenants or agreements of the other Parties, or satisfaction of any of the conditions to its obligations to effect the Mergers, contained herein. Any agreement on the part of a Party to any such extension or waiver shall be valid only if set forth in a written instrument signed by an authorized representative of such Party. Except as provided in this Agreement, no action taken pursuant to this Agreement, including any investigation by or on behalf of any Party, shall be deemed to constitute a waiver by the Party taking such action of compliance with any representations, warranties, covenants or agreements contained in this Agreement. The waiver by any Party of a breach of any provision hereof shall not operate or be construed as a waiver of any prior or subsequent breach of the same or any other provisions hereof.

Section 10.9 Incorporation . The Exhibits and Schedules to this Agreement are hereby incorporated into this Agreement.

Section 10.10 No Remedy in Certain Circumstances . Each Party agrees that should any Governmental Authority hold any provision of this Agreement or part hereof to be null, void or unenforceable, or order any Party to take any action inconsistent herewith or not to take an action consistent herewith or required hereby, the validity, legality and enforceability of the remaining provisions and obligations contained or set forth herein shall not in any way be affected or impaired thereby. Except as otherwise contemplated by this Agreement, to the extent that a Party took an action inconsistent herewith or failed to take action consistent herewith or required hereby pursuant to an Order or judgment of a court or other competent Governmental Authority, such Party shall not incur any liability or obligation unless such Party did not in good faith seek to resist or object to the imposition or entering of such Order or judgment.

Section 10.11 No Strict Construction . Each of the Parties hereto acknowledges that this Agreement has been prepared jointly by the Parties hereto, and shall not be strictly construed against any Party hereto.

Section 10.12 Expenses . Each Party shall pay its own costs and expenses incident to preparing for, entering into and carrying out this Agreement and the other Transaction Documents and the consummation of the Mergers and the other transactions contemplated hereby and thereby.

Section 10.13 Resale Registration Rights . Parent hereby undertakes that, as soon as is reasonably practicable, Parent shall file a registration statement with the SEC (i) naming each of the holders of Parent Common Stock identified in Section 4.3(a)(vi) of the Parent Disclosure Letter as a Selling Stockholder and (ii) allowing for the resale of as many shares of Parent Common Stock held by Persons who are not Affiliates of Company Parent as Parent determines in good faith, after the Closing, Parent can reasonably include in such registration statement, not including any Dissenting Shares.

Section 10.14 Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to any conflicts or choices of laws provisions thereof that would operate to apply the laws of any other state.

Section 10.15 Jurisdiction; Waiver of Jury Trial . The Parties agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, any of this Agreement, the other Transaction Documents, the Mergers and the other transactions contemplated hereby and thereby shall be exclusively brought in any federal court located in the State of Delaware or any Delaware state court, and each of the Parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any Party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each Party agrees that service of process on such Party in the manner provided in Section 10.3 shall be deemed effective service of process on such Party. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY

ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE MERGERS AND THE OTHER TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.

[Signature Page follows]

IN WITNESS WHEREOF , each of the Parties has executed this Agreement as of the date first written above.


ROSEWIND CORPORATION

By:		/s/ James B. Wiegand

		James B. Wiegand
		President

ROSEWIND MERGER
		SUB L, INC.

By:		/s/ James B. Wiegand

		James B. Wiegand
		President

ROSEWIND MERGER
		SUB V, INC.

By:		/s/ James B. Wiegand
		James B. Wiegand
		President

/s/ James B. Wiegand
James B. Wiegand

/s/ Michael B. Wiegand
Michael B. Wiegand

LUOXIS DIAGNOSTICS, INC.

By:		/s/ Joshua R. Disbrow

		Name: Joshua R. Disbrow
		Title: Chief Executive Officer

[Signature Page to Agreement and Plan of Merger]


VYRIX PHARMACEUTICALS, INC.

By:		/s/ Jarrett T. Disbrow

		Name: Jarrett T. Disbrow
		Title: Chief Executive Officer

[Signature Page to Agreement and Plan of Merger]

Schedule 2.5(a)

Parent Board

Michael Macaluso

Schedule 2.5(h)

Parent Officers


Joshua Disbrow		Chief Executive Officer

Jarret Disbrow		Chief Operating Officer

Exhibit A-1

CERTIFICATE OF MERGER

ROSEWIND MERGER SUB L, INC.

WITH AND INTO

LUOXIS DIAGNOSTICS, INC.

* * * * * * *

Pursuant to Section 251 of the General Corporation Law of the State of Delaware (the “ DGCL ”), the undersigned corporation does hereby certify that:

1. The constituent corporations (the “ Constituent Corporations ”) participating in the merger herein certified (the “ Merger ”) are:

a. Rosewind Merger Sub L, Inc., which is incorporated under the laws of the State of Delaware (“ Merger Sub ”); and

b. Luoxis Diagnostics, Inc., which is incorporated under the laws of the State of Delaware (“ Luoxis ”).

2. An Agreement and Plan of Merger (the “ Merger Agreement ”), dated as of April 16, 2015, by and among the individuals identified therein as Parent Major Stockholders, Rosewind Corporation, a Colorado corporation, Merger Sub, Luoxis, Rosewind Merger Sub V, Inc., a Delaware corporation, and Vyrix Pharmaceuticals, Inc., a Delaware corporation, has been approved, adopted, certified, executed and acknowledged by each of the Constituent Corporations in accordance with Section 251 and 228 of the DGCL.

3. The name of the surviving corporation in the Merger is Luoxis Diagnostics, Inc.

4. The certificate of incorporation of the surviving corporation at the effective time of the Merger shall be amended and restated as set forth on Exhibit A hereto, and as so amended and restated, shall be the certificate of incorporation of the surviving corporation until thereafter amended as provided therein or pursuant to the provisions of the laws of the State of Delaware.

5. The Merger shall be effective upon the filing of this Certificate of Merger with the Secretary of the State of Delaware.

6. An executed copy of the Merger Agreement is on file at an office of the aforesaid surviving corporation, the address of which is as follows:

Luoxis Diagnostics, Inc.

373 Inverness Parkway, Suite 200

Englewood, Colorado 80112

7. A copy of the Merger Agreement will be furnished by the aforesaid surviving corporation, on request, and without cost, to any stockholder of either of the Constituent Corporations.

[ Signature page follows .]

IN WITNESS WHEREOF, Luoxis Diagnostics, Inc. has caused this Certificate of Merger to be executed by its duly authorized officer this 16 ^th day of April, 2015.


LUOXIS DIAGNOSTICS, INC.

By:
		Name: Joshua R. Disbrow
		Title: President and Chief Executive Officer

S IGNATURE P AGE TO R OSEWIND

M ERGER S UB L C ERTIFICATE OF M ERGER

EXHIBIT A

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

LUOXIS DIAGNOSTICS, INC.



FIRST :		The name of this corporation shall be: Luoxis Diagnostics, Inc.

SECOND :		Its registered office in the State of Delaware is to be located at:

		1209 Orange Street, in the City of Wilmington, County of New Castle, 19801, and its registered agent at such address is: The Corporation Trust Company.

THIRD :		The purpose or purposes of the corporation shall be:

		To carry on any and all business and to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH :		The total number of shares of stock which this corporation is authorized to issue is:

		One Thousand (1,000) shares of Common Stock, par value $0.001 per share.

FIFTH :		In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors is expressly authorized to adopt, amend or repeal the by-laws of the corporation.

SIXTH :		Elections of directors need not be by written ballot unless the by-laws of the corporation shall so provide.

SEVENTH :		A director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. If the Delaware General Corporation Law is amended after the effective date of this Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law of the State of Delaware. No amendment, modification or repeal of this Article EIGHTH shall adversely affect the rights and protection afforded to a director of the corporation under this Article EIGHTH Section for acts or omissions occurring prior to such amendment, modification or repeal.



EIGHTH:		The corporation reserves the right to amend or repeal this Certificate of Incorporation in the manner now or hereafter prescribed by statute and this Certificate of Incorporation, and all rights conferred upon stockholders herein are granted subject to this reservation. Whenever any vote of the holders of capital stock of the corporation is required to amend or repeal any provision of this Certificate of Incorporation, and in addition to any other vote of holders of capital stock that is required by this Certificate of Incorporation or by law, such amendment or repeal shall require the affirmative vote of the majority of the outstanding shares of capital stock entitled to vote on such amendment or repeal, and the affirmative vote of the majority of the outstanding shares of each class entitled to vote thereon as a class, at a duly constituted meeting of stockholders called expressly for such purpose.

The remainder of this page is intentionally left blank

Exhibit A-2

CERTIFICATE OF MERGER

ROSEWIND MERGER SUB V, INC.

WITH AND INTO

VYRIX PHARMACEUTICALS, INC.

* * * * * * *

Pursuant to Section 251 of the General Corporation Law of the State of Delaware (the “ DGCL ”), the undersigned corporation does hereby certify that:

1. The constituent corporations (the “ Constituent Corporations ”) participating in the merger herein certified (the “ Merger ”) are:

a. Rosewind Merger Sub V, Inc., which is incorporated under the laws of the State of Delaware (“ Merger Sub ”); and

b. Vyrix Pharmaceuticals, Inc., which is incorporated under the laws of the State of Delaware (“ Vyrix ”).

2. An Agreement and Plan of Merger (the “ Merger Agreement ”), dated as of April 16, 2015, by and among the individuals identified therein as Parent Major Stockholders, Rosewind Corporation, a Colorado corporation, Rosewind Merger Sub L, Inc., a Delaware corporation, Luoxis Diagnostics, Inc., a Delaware corporation, Merger Sub and Vyrix, has been approved, adopted, certified, executed and acknowledged by each of the Constituent Corporations in accordance with Section 251 and 228 of the DGCL.

3. The name of the surviving corporation in the Merger is Vyrix Pharmaceuticals, Inc.

5. The Merger shall be effective upon the filing of this Certificate of Merger with the Secretary of the State of Delaware.

6. An executed copy of the Merger Agreement is on file at an office of the aforesaid surviving corporation, the address of which is as follows:

Vyrix Pharmaceuticals, Inc.

373 Inverness Parkway, Suite 200

Englewood, Colorado 80112

7. A copy of the Merger Agreement will be furnished by the aforesaid surviving corporation, on request, and without cost, to any stockholder of either of the Constituent Corporations.

[ Signature page follows. ]

IN WITNESS WHEREOF, Vyrix Pharmaceuticals, Inc. has caused this Certificate of Merger to be executed by its duly authorized officer this 16 ^th day of April, 2015.


VYRIX PHARMACEUTICALS, INC.

By:
		Name: Jarrett Disbrow
		Title: President and Chief Executive Officer

S IGNATURE P AGE TO R OSEWIND

M ERGER S UB V C ERTIFICATE OF M ERGER

EXHIBIT A

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

VYRIX PHARMACEUTICALS, INC.



FIRST :		The name of this corporation shall be: Vyrix Pharmaceuticals, Inc.

SECOND :		Its registered office in the State of Delaware is to be located at:

		1209 Orange Street, in the City of Wilmington, County of New Castle, 19801, and its registered agent at such address is: The Corporation Trust Company.

THIRD :		The purpose or purposes of the corporation shall be:

		To carry on any and all business and to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH :		The total number of shares of stock which this corporation is authorized to issue is:

		One Thousand (1,000) shares of Common Stock, par value $0.001 per share.

FIFTH :		In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors is expressly authorized to adopt, amend or repeal the by-laws of the corporation.

SIXTH :		Elections of directors need not be by written ballot unless the by-laws of the corporation shall so provide.

SEVENTH :		A director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. If the Delaware General Corporation Law is amended after the effective date of this Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law of the State of Delaware. No amendment, modification or repeal of this Article EIGHTH shall adversely affect the rights and protection afforded to a director of the corporation under this Article EIGHTH Section for acts or omissions occurring prior to such amendment, modification or repeal.


EIGHTH :		The corporation reserves the right to amend or repeal this Certificate of Incorporation in the manner now or hereafter prescribed by statute and this Certificate of Incorporation, and all rights conferred upon stockholders herein are granted subject to this reservation. Whenever any vote of the holders of capital stock of the corporation is required to amend or repeal any provision of this Certificate of Incorporation, and in addition to any other vote of holders of capital stock that is required by this Certificate of Incorporation or by law, such amendment or repeal shall require the affirmative vote of the majority of the outstanding shares of capital stock entitled to vote on such amendment or repeal, and the affirmative vote of the majority of the outstanding shares of each class entitled to vote thereon as a class, at a duly constituted meeting of stockholders called expressly for such purpose.

The remainder of this page is intentionally left blank

Exhibit B-1

LOCKUP AGREEMENT

THIS LOCKUP AGREEMENT (this “ Agreement ”) is made and entered into as of April [•], 2015, by and among Rosewind Corporation, a Colorado corporation (together with any successors and assigns thereto, “ Parent ”), and the undersigned holder of Parent’s capital stock (“ Seller ”). Each capitalized term used, but not otherwise defined, herein has the respective meaning ascribed to such term in the Agreement and Plan of Merger, dated as of April [•], 2015, by and among Seller, Parent, and the other parties thereto (the “ Merger Agreement ”).

In connection with the consummation of the transactions contemplated by the Merger Agreement and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and agreed, Seller and Parent hereby agree as follows:

1. The execution and delivery of this Agreement is a condition to the performance of the parties’ obligations under the Merger Agreement, including the delivery of the shares of Parent Common Stock issued to the Seller pursuant thereto (the “ Shares ”).

2. Seller hereby acknowledges and agrees that during the Lockup Period (as defined below), as applicable to those Shares which remain subject to the Lockup Period from time to time (as set forth below), it shall not, without the prior written consent of Parent, (A) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934 (the “ Exchange Act ”) with respect to any portion of such Shares or any securities convertible into or exercisable or exchangeable for Parent Common Stock now owned or hereafter acquired by the undersigned, (B) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any such Shares or securities convertible into or exercisable or exchangeable for Parent Common Stock, whether any such transaction is to be settled by delivery of such Shares or such other securities, in cash or otherwise, or (C) publicly announce any intention to effect any transaction specified in clause (A) or (B). As used herein, the term “ Lockup Period ” means the period beginning on the date hereof and ending on the earlier of: (a) (i) with respect to twenty-five percent (25%) of the Shares, June 30, 2015, and (ii) with respect to the remaining seventy-five percent (75%) of the Shares, April [•], 2017, and (b) the date that Parent, the corporate parent of Parent, consummates a liquidation, merger, stock exchange or other similar transaction that results in all of the holders of Parent Common Stock having the right to exchange their shares of Parent Common Stock for cash, securities or other property.

3. Notwithstanding the provisions of paragraph 2, above, Seller may transfer any or all of its Shares:

(a)

to the officers, directors or employees of Parent;

(b)

as a bona fide gift to any member of the immediate family to Seller’s immediate family members (as defined below) and trusts for estate planning purposes;

(c)

as a bona fide gift to a charity or educational institution;

(d)

by virtue of the laws of descent and distribution upon Seller’s death; or

(e)

transfers by operation of law, including pursuant to domestic relations or court orders; and

(f)

transfers consented to, in writing, by Parent;

provided, however, that in the case of any transfer described in clauses (a) through (e) above, it shall be a condition to the transfer that (A) the transferee executes and delivers to Parent not later than three (3) business days prior to such transfer, a written agreement, in substantially the form of this Agreement (it being understood that any references to “immediate family” in the agreement executed by such transferee shall expressly refer only to the immediate family of the undersigned and not to the immediate family of the transferee) and otherwise satisfactory in form and substance to Parent. For purposes of this paragraph, “immediate family” shall mean a spouse, child, grandchild or other lineal descendant (including by adoption), father, mother, brother or sister of the undersigned.

4. In furtherance of the foregoing, Seller hereby (a) further agrees that (i) it will not, during the Lockup Period, make any demand or request for or exercise any right with respect to the registration under the Securities Act of any Shares or any securities convertible into or exercisable or exchangeable for Parent Common Stock, and (b) authorizes Parent during the Lockup Period to cause the transfer agent for the Parent Common Stock to decline to transfer any Shares or securities convertible into or exercisable or exchangeable for Parent Common Stock, and to place restrictive legends and note stop transfer restrictions on the Shares, the stock register and other records relating to the Shares.

5. Seller hereby represents and warrants to Parent that (i) it has full power and authority to enter into this Agreement and (ii) this Agreement constitutes the legal, valid and binding obligation of the undersigned, enforceable in accordance with its terms.

6. This Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby. This Agreement may not be changed, amended, modified or waived as to any particular provision, except by a written instrument executed by all parties hereto.

7. No party hereto may assign this Agreement or any of its rights, interests, or obligations hereunder without the prior written consent of the other parties. Any purported assignment in violation of this paragraph 7 shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. This Agreement shall be binding on each party’s respective successors, heirs, personal representatives and assigns.

8. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without giving effect to conflicts of law principles that· would result in the application of the substantive laws of another jurisdiction. The parties hereto (i) agree that any action, proceeding, claim or dispute arising out of, or relating in any way to, this Agreement shall be brought and enforced in the courts of the State of Delaware, and irrevocably submit to such jurisdiction and venue, which jurisdiction and venue shall be exclusive and (ii) waive any objection to such exclusive jurisdiction and venue or that such courts represent an inconvenient forum.

9. Any notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be in writing and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery, or by electronic or facsimile transmission, to the address, email or facsimile number indicated on the books and records of Parent or such other address as a party shall subsequently provide.

10. Upon request by Parent, Seller will execute any additional documents necessary in connection with enforcement hereof.

* * * * *

IN WITNESS WHEREOF, the parties have executed this Lockup Agreement on the date first written above.


ROSEWIND CORPORATION

By:
		Name: Joshua R. Disbrow
		Title: President and Chief Executive Officer

STOCKHOLDERS

By:
		Name:

[ S IGNATURE P AGE TO W IEGAND L OCKUP A GREEMENT ]

Exhibit B-2

LOCKUP AGREEMENT

THIS LOCKUP AGREEMENT (this “ Agreement ”) is made and entered into as of April [•], 2015, by and among Rosewind Corporation, a Colorado corporation (together with any successors and assigns thereto, “ Parent ”), and Ampio Pharmaceuticals, Inc., a Delaware corporation (together with any successors and assigns thereto, “ Seller ”). Each capitalized term used, but not otherwise defined, herein has the respective meaning ascribed to such term in the Agreement and Plan of Merger, dated as of April [•], 2015, by and among certain subsidiaries of Seller, Parent, and the other parties thereto (the “ Merger Agreement ”).

2. Seller hereby acknowledges and agrees that during the Lockup Period (as defined below), as applicable to those Shares which remain subject to the Lockup Period from time to time (as set forth below), it shall not, without the prior written consent of Parent, (A) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934 (the “ Exchange Act ”) with respect to any portion of such Shares or any securities convertible into or exercisable or exchangeable for Parent Common Stock now owned or hereafter acquired by the undersigned, (B) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any such Shares or securities convertible into or exercisable or exchangeable for Parent Common Stock, whether any such transaction is to be settled by delivery of such Shares or such other securities, in cash or otherwise, or (C) publicly announce any intention to effect any transaction specified in clause (A) or (B). As used herein, the term “ Lockup Period ” means the period beginning on the date hereof and ending on the earlier of: (a) with respect to twenty-five percent (25%) of the Shares, April [•], 2017, (b) with respect to twenty-five percent (25%) of the Shares, October [•], 2017, (c) with respect to twenty-five percent (25%) of the Shares, April [•], 2018, (d) October [•], 2018, (e) the date that Parent consummates a liquidation, merger, stock exchange or other similar transaction that results in all of the holders of Parent Common Stock having the right to exchange their shares of Parent Common Stock for cash, securities or other property, and (f) the date that a person or group of persons or entities obtains a controlling interest in Seller’s capital stock.

3. Notwithstanding the provisions of paragraph 2, above, Seller may transfer any or all of its Shares:

(a)

to the officers, directors or employees of Parent;

(b)

as a bona fide gift to any member of the immediate family to Seller’s immediate family members (as defined below) and trusts for estate planning purposes;

(c)

as a bona fide gift to a charity or educational institution;

(d)

by virtue of the laws of descent and distribution upon Seller’s death; or

(e)

transfers by operation of law, including pursuant to domestic relations or court orders; and

(f)

transfers consented to, in writing, by Parent;

provided, however, that in the case of any transfer described in clauses (a) through (e) above, (A) it shall be a condition to the transfer that the transferee executes and delivers to Parent not later than three (3) business days prior to such transfer, a written agreement, in substantially the form of this Agreement (it being understood that any references to “immediate family” in the agreement executed by such transferee shall expressly refer only to the immediate family of the undersigned and not to the immediate family of the transferee) and otherwise satisfactory in form and substance to Parent and (B) acceptance of Shares by any transferee shall constitute such transferee’s agreement to be bound by this Agreement. For purposes of this paragraph, “immediate family” shall mean a spouse, child, grandchild or other lineal descendant (including by adoption), father, mother, brother or sister of the undersigned.

10. Upon request by Parent, Seller will execute any additional documents necessary in connection with enforcement hereof.

* * * * *

IN WITNESS WHEREOF, the parties have executed this Lockup Agreement on the date first written above.


ROSEWIND CORPORATION

By:
		Joshua R. Disbrow
		President and Chief Executive Officer

AMPIO PHARMACEUTICALS, INC.

By:
		Gregory A. Gould
		Chief Financial Officer

[S IGNATURE P AGE TO A MPIO L OCKUP A GREEMENT ]

Exhibit C

RELEASE

THIS RELEASE (this “ Release ”), dated as of April [•], 2015 is made by the undersigned holder of capital stock of Rosewind Corporation, a Colorado corporation (“ Parent ”), for the benefit of Parent. Capitalized terms used herein but not defined herein have the respective meanings ascribed to them in the Merger Agreement (as defined below).

WHEREAS, the undersigned, as a Parent Major Stockholder, the other Parent Major Stockholder, Parent, Rosewind Merger Sub L, Inc., a Delaware corporation (“ Luoxis Merger Sub ”) and Rosewind Merger Sub V, Inc., a Delaware corporation (“ Vyrix Merger Sub ”), and Luoxis Diagnostics, Inc. (“ Luoxis ”) and Vyrix Pharmaceuticals, Inc. (“ Vyrix ,” and, together with Luoxis, the “ Companies ”), have entered into an Agreement and Plan of Merger (the “ Merger Agreement ”) on or about the date hereof;

WHEREAS, the undersigned owns shares of Parent Common Stock and will benefit from the consummation of the transactions contemplated by the Merger Agreement; and

WHEREAS, Parent is indebted to the undersigned in the amount of approximately $30,000 pursuant to an un-documented loan made by the undersigned to Parent (the “ Loan ”), and the Loan is secured by an un-documented security interest in the Vessel (the “ Vessel Mortgage ”); and

WHEREAS, in order to induce the Companies to enter into the Merger Agreement and consummate the transactions contemplated thereby, the undersigned wishes to grant this Release in accordance with Section 7.2 of the Merger Agreement.

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned hereby agrees as follows:

1. Release . Effective upon the Closing, the undersigned, on behalf of himself and his successors, assigns and heirs, hereby unconditionally and irrevocably waives, releases and forever discharges Parent and each of its past and present directors, officers, managers, employees, agents, predecessors, successors, assigns, equityholders, members, partners, insurers, representatives and Affiliates (collectively, the “ Released Parties ”) from any and all liabilities of any kind whatsoever, in each case whether absolute or contingent, liquidated or unliquidated, known or unknown, including any liabilities or obligations under the Loan and the Vessel Mortgage, or either of them, and the undersigned shall not seek to recover any amounts owed to the undersigned pursuant to any agreement or other arrangement entered into prior to the Closing, other than the Merger Agreement and the other Transaction Documents. The undersigned understands that this is a full and final release of all claims, demands, causes of actions and liabilities of any nature whatsoever, whether or not known, suspected or claimed, that could have been asserted in any legal or equitable proceeding against any of the Released Parties, except as expressly set forth in this Section 1. The undersigned represents that he is not aware of any claim by him other than the claims that are waived, released and forever discharged by this Section 1. The undersigned hereby releases the Vessel Mortgage.

2. Miscellaneous . The following provisions of the Merger Agreement are hereby incorporated into and specifically made applicable to this Release (provided that, in construing such incorporated provisions, any reference to “this Agreement” shall be deemed to refer to this Release: Section 1.2 ( References and Titles ), Section 10.3 ( Notices ), Section 10.4 ( Counterparts, Facsimile Signatures ), Section 10.5 ( Severability ), Section 10.6 ( Entire Agreement, No Third Party Beneficiaries ), Section 10.7 ( Assignment ), Section 10.14 ( Governing Law ) and Section 10.15 ( Jurisdiction, Waiver of Jury Trial ).

IN WITNESS WHEREOF, the undersigned has executed this Release as of the date first set forth above.

Name: James B. Wiegand

Title: President

S IGNATURE P AGE TO

(P ARENT M AJOR S TOCKHOLDER ) R ELEASE

Exhibit D

ROSEWIND CORPORATION

c/o Ampio Pharmaceuticals, Inc.

373 Inverness Parkway, Suite 200

Englewood, Colorado 80112

April [•], 2015

James B. Wiegand

16200 WCR 18E

Loveland, Colorado 80537

Dear Mr. Wiegand:

This letter agreement (this “ Agreement” ) sets forth the terms and conditions whereby you agree to provide certain services (as described on Schedule 1) to Rosewind Corporation (the “ Company” ).

1.	S ERVICES

1.1	The Company hereby engages you, and you hereby accept such engagement, as an independent contractor to provide certain services to the Company on the terms and conditions set forth in this Agreement.

1.2	You shall provide to the Company the services set forth on Schedule 1 (the “ Services ”).

1.3	The Company shall not control the manner or means by which you perform the Services.

1.4

To the extent you perform any Services on the Company’s premises or using the Company’s equipment, you shall comply with all applicable policies of the Company relating to business and office conduct, health and safety and use of the Company’s facilities, supplies, information technology, equipment, networks and other resources.

T ERM

The term of this Agreement shall commence on the date set forth above and shall continue through the first anniversary of such date, unless earlier terminated in accordance with Section 9 (the “ Term” ).

3.	F EE AND E XPENSES

3.1

As full compensation for the Services and the rights granted to the Company in this Agreement, the Company shall pay you a fixed fee of $50,000 (the “ Fee” ). $25,000 of the Fee is payable upon execution of this Agreement, and the remaining $25,000 of the Fee is payable at the end of the Term, subject to any applicable adjustment pursuant to Section 9.1 in the event of an early termination without cause. You acknowledge that you will receive an IRS Form 1099-MISC from the Company, and that you shall be solely responsible for all federal, state and local taxes, as set out in Section 4.2 .

3.2	The Company will reimburse you for any reasonable out-of-pocket expenses that you incur for travel (including meals and lodging) at the request of the Company in performance of the Services.

4.	R ELATIONSHIP OF THE P ARTIES

4.1

You are an independent contractor of the Company, and this Agreement shall not be construed to create any association, partnership, joint venture, employee or agency relationship between you and the Company for any purpose. You have no authority (and shall not hold yourself out as having authority) to bind the Company and you shall not make any agreements or representations on the Company’s behalf without the Company’s prior written consent.

4.2

Without limiting Section 4.1 , you will not be eligible under this Agreement to participate in any vacation, group medical or life insurance, disability, profit sharing or retirement benefits or any other fringe benefits or benefit plans offered by the Company to its employees, and the Company will not be responsible for withholding or paying any income, payroll, Social Security or other federal, state or local taxes, making any insurance contributions, including unemployment or disability, or obtaining worker’s compensation insurance on your behalf. You shall be responsible for, and shall indemnify the Company against, all such taxes or contributions, including penalties and interest.

5.	I NTELLECTUAL P ROPERTY R IGHTS

5.1

The Company is and shall be, the sole and exclusive owner of all right, title and interest throughout the world in and to all the results and proceeds of the Services performed under this Agreement, including all patents, copyrights, trademarks, trade secrets and other intellectual property rights (collectively “ Intellectual Property ”) therein. You agree that any and all Intellectual Property is deemed to be “work made for hire” as defined in 17 U.S.C. § 101 for the Company. If, for any reason, any of the Intellectual Property does not constitute a “work made for hire,” you hereby irrevocably assign to the Company, in each case without additional consideration, all right, title and interest throughout the world in and to the Intellectual Property.

5.2

Upon the request of the Company, you shall promptly take such further actions, including execution and delivery of all appropriate instruments of conveyance, as may be necessary to assist the Company to prosecute, register, perfect, record or enforce its rights in any of the Intellectual Property. In the event the Company is unable, after reasonable effort, to obtain your signature on any such documents, you hereby irrevocably designate and appoint the Company as your agent and attorney-in-fact, to act for and on your behalf solely to execute and file any such application or other document and do all other lawfully permitted acts to further the prosecution and issuance of any of the Intellectual Property with the same legal force and effect as if you had executed them. You agree that this power of attorney is coupled with an interest.

6.	C ONFIDENTIALITY

6.1

You acknowledge that you will have access to information that is treated as confidential and proprietary by the Company, including, without limitation, the existence and terms of this Agreement, trade secrets, technology, and information pertaining to business operations and strategies, customers, pricing, marketing, finances, sourcing, personnel, operations of the Company, its affiliates or their suppliers or customers, in each case whether spoken, written, printed, electronic or in any other form or medium (collectively, the “ Confidential Information” ). Any Confidential Information that you develop in connection with the Services, including but not limited to any Intellectual Property, shall be subject to the terms and conditions of this Section. You agree to treat all Confidential Information as strictly confidential, not to disclose Confidential Information or permit it to be disclosed, in whole or part, to any third party without the prior written consent of the Company in each instance, and not to use any Confidential Information for any purpose except as required in the performance of the Services. You shall notify the Company immediately in the event you become aware of any loss or disclosure of any Confidential Information.

6.2	Confidential Information shall not include information that:

(a)

is or becomes generally available to the public other than through your breach of this Agreement; or

(b)

is communicated to you by a third party that had no confidentiality obligations with respect to such information.

6.3	Nothing herein shall be construed to prevent disclosure of Confidential Information as may be required by applicable law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an authorized government agency, provided that the disclosure does not exceed the

extent of disclosure required by such law, regulation or order. You agree to provide written notice of any such order to an authorized officer of the Company within five days of receiving such order, but in any event sufficiently in advance of making any disclosure to permit the Company to contest the order or seek confidentiality protections, as determined in the Company’s sole discretion.

7.	R EPRESENTATIONS AND W ARRANTIES

7.1	You represent and warrant to the Company that:

(a)

you have the right to enter into this Agreement, to grant the rights granted herein and to perform fully all of your obligations in this Agreement;

(b)

your entering into this Agreement with the Company and your performance of the Services do not and will not conflict with or result in any breach or default under any other agreement to which you are subject;

(c)

you shall perform the Services in a professional and workmanlike manner in accordance with generally recognized industry standards for similar services and you shall devote sufficient resources to ensure that the Services are performed in a timely and reliable manner;

(d)

you shall perform the Services in compliance with all applicable federal, state and local laws and regulations;

(e)

the Company will receive good and valid title to all Intellectual Property, free and clear of all encumbrances and liens of any kind;

(f)

all Intellectual Property is and shall be your original work (except for material in the public domain or provided by the Company) and does not and will not violate or infringe upon the intellectual property right or any other right whatsoever of any person, firm, corporation or other entity.

7.2	The Company hereby represents and warrants to you that:

(a)

it has the full right, power and authority to enter into this Agreement and to perform its obligations hereunder; and

(b)

the execution of this Agreement by its representative whose signature is set forth at the end hereof has been duly authorized by all necessary corporate action.

8.	I NDEMNIFICATION

8.1

You shall defend, indemnify and hold harmless the Company and its affiliates and their officers, directors, employees, agents, successors and assigns from and against all losses, damages, liabilities, deficiencies, actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind (including reasonable attorneys’ fees) arising out of or resulting from:

(a)

bodily injury, death of any person or damage to real or tangible, personal property resulting from your acts or omissions; and

(b)

your breach of any representation, warranty or obligation under this Agreement.

8.2	The Company may satisfy such indemnity (in whole or in part) by way of deduction from any payment due to you.

9.	T ERMINATION

9.1

The Company may terminate this Agreement without cause upon thirty days’ written notice to you. If the Company terminates this Agreement pursuant to this Section 9.1 , the Company shall pay you the pro rata portion of the Fee corresponding to the portion of the Term completed through the date of such termination.

9.2	The Company may terminate this Agreement, effective immediately upon written notice to you and without any liability to pay the Fee or otherwise, in the event that you materially breach this Agreement.

9.3	Upon expiration or termination of this Agreement for any reason, or at any other time upon the Company’s written request, you shall promptly after such expiration or termination:

(a)

deliver to the Company all Intellectual Property (whether complete or incomplete) and all hardware, software, tools, equipment or other materials provided for your use by the Company;

(b)

deliver to the Company all tangible documents and materials (and any copies) containing, reflecting, incorporating or based on the Confidential Information;

(c)

permanently erase all of the Confidential Information from your computer systems; and

(d)

certify in writing to the Company that you have complied with the requirements of this Section.

9.4	The terms and conditions of this Section 9 , Section 4 , Section 5 , Section 6 , Section 7 , Section 8 , Section 7.3 , Section 11 , Section 12 and Section 13 shall survive the expiration or termination of this Agreement.

10.

O THER B USINESS A CTIVITIES

You may be engaged or employed in any other business, trade, profession or other activity which does not place you in a conflict of interest with the Company; provided, that, during the Term, you shall not be engaged in any business activities that do or may compete with the business of the Company without the Company’s prior written consent.

11.

A SSIGNMENT

You shall not assign any rights, or delegate or subcontract any obligations, under this Agreement without the Company’s prior written consent. Any assignment in violation of the foregoing shall be deemed null and void. The Company may freely assign its rights and obligations under this Agreement at any time. Subject to the limits on assignment stated above, this Agreement will inure to the benefit of, be binding on, and be enforceable against each of the parties hereto and their respective successors and assigns.

12.

M ISCELLANEOUS

12.1	You shall not export, directly or indirectly, any technical data acquired from the Company, or any products utilizing any such data, to any country in violation of any applicable export laws or regulations.

12.2

All notices, requests, consents, claims, demands, waivers and other communications hereunder (each, a “ Notice” ) shall be in writing and addressed to the parties at the addresses set forth on the first page of this Agreement (or to such other address that may be designated by the receiving party from time to time in accordance with this section). All Notices shall be delivered by personal delivery, nationally recognized overnight courier (with all fees pre-paid), facsimile or e-mail of a PDF document (with confirmation of transmission) or certified or registered mail (in each case, return receipt requested, postage prepaid). Except as otherwise provided in this Agreement, a Notice is effective only if (a) the receiving party has received the Notice and (b) the party giving the Notice has complied with the requirements of this Section.

12.3

This Agreement and together with Schedule 1, constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.

12.4	This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto, and any of the terms thereof may be waived, only by a written document signed by each party to this Agreement or, in the case of waiver, by the party or parties waiving compliance.

12.5

This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule. Each party irrevocably submits to the exclusive jurisdiction and venue of the federal and state courts located in New York, New York in any legal suit, action or proceeding arising out of or based upon this Agreement or the Services provided hereunder.

12.6	If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

12.7	This Agreement may be executed in multiple counterparts and by facsimile signature, each of which shall be deemed an original and all of which together shall constitute one instrument.

[Signature page follows.]

If this letter accurately sets forth our understanding, kindly execute the enclosed copy of this letter and return it to the undersigned.

Very truly yours,


ROSEWIND CORPORATION

By:
		Joshua R. Disbrow
		President and Chief Executive Officer


ACCEPTED AND AGREED:

James B. Wiegand
President

[Signature page to Consulting Agreement]

Schedule 1

The Services:

•	Transition services related to the mergers of the Company with Luoxis Diagnostics, Inc. and Vyrix Pharmaceuticals, Inc. (the “ Merger ”), including:

•

communications with third parties (vendors, service providers, etc.) with whom the Company has done or does business; and

•

transfer of the Company’s sailing vessel and related licenses, agreements and other documents into your own name or that of your designee;

•	Change of leadership communications as required with the SEC, financial reporting groups, and any other parties the Company needs to notify;

•	Assistance with OTCQB transition and communication as requested by the Company;

•	Assistance in securing historical documents, data, figures, etc. as relevant to the Merger and the Company;

•	Being available for questions from the Company’s senior management, accounting firm, attorneys, etc. as required throughout the Term; and

•	assistance with other general business needs.

EXHIBIT E

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”), is effective as of April [•], 2015 (the “Effective Date”), between Rosewind Corporation, a Colorado corporation headquartered at 373 Inverness Parkway, Suite 200, Englewood, CO 80112 USA, hereinafter referred to as the “Company”, and [ ] (“Employee”).

RECITALS

WHEREAS, the Company is a duly organized Colorado corporation, with its principal place of business within the State of Colorado, and is in the business of developing and marketing pharmaceutical products; and

WHEREAS, the Company desires assurance of the continued association and services of the Employee in order to continue to retain the Employee’s experience, skills, abilities, background and knowledge, and is willing to continue to engage the Employee’s services on the terms and conditions set forth in this Agreement; and

WHEREAS, Employee desires to be in the continued employ of the Company, and is willing to accept such continued employment on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, the parties hereto agree to the terms and conditions of this Agreement as follows:

1. Employment for Term. The Company hereby agrees to employ Employee and Employee hereby accepts such employment with the Company for the period of 24 months beginning on the Effective Date. The term of this Agreement (the “Term”) shall continue until the termination of Employee’s employment in accordance with the provisions of this Agreement. The termination of Employee’s employment under this Agreement shall end the Term but shall not terminate Employee’s or the Company’s other obligations that are intended to survive the termination of this Agreement (including without limitation, the payments under Section 7 and 8 and Employee’s obligations under Section 9).

2. Position and Duties. During the Term, Employee shall serve as Chief Executive Officer (CEO) of the Company, and perform such duties as are consistent with this position. The Employee shall report to the Board of Directors of the Company. During the Term, Employee shall also hold such additional positions and titles as the Board of Directors of the Company (the “Board”) may determine from time to time. During the Term, Employee shall devote as much time as is necessary to satisfactorily perform his duties as CEO of the Company. Employee may engage in any civic and not-for-profit activities so long as such activities do not materially interfere with the performance of his duties hereunder or present a conflict of interest with the Company During the Term of this Agreement, Employee agrees not to acquire, assume or participate in, directly or indirectly, any position, investment or interest known by the Employee to be adverse or antagonistic to the Company, its business or prospects, its financial position, or otherwise or in any company, person or entity that is, directly or indirectly, in competition with the business of the Company or any of its affiliates. This provision shall encompass any advisory boards of which Employee is or becomes a member of during the term hereof. Employee shall provide written disclosure to the Compensation Committee of the Company’s Board of Directors as to all advisory boards on which Employee sits, and will provide the Company with written notice within 10 business days of Employee agreeing to sit on any additional advisory boards. On termination of Employee’s employment, regardless of the reason for such termination, Employee shall immediately (and with contemporaneous effect) resign any directorships, offices or other positions that Employee may hold in the Company or any affiliate, unless otherwise agreed in writing by the parties.

3. Compensation.

(a) Base Salary. The Company shall pay Employee a base salary of $[•] per annum, payable at least monthly on the Company’s regular pay cycle for professional employees (the “Base Salary”). Except as specifically otherwise provided herein, the Base Salary may be increased only by recommendation of the Compensation Committee of the Board and ratified by the Compensation Committee or a majority of the independent members of the Board.

(b) Annual Review. The Base Salary shall be reviewed at the end of each calendar year (the first such review to occur at the end of calendar year 2015).

(c) Equity Compensation. In connection with the execution of this Agreement, the Company hereby agrees to grant on or promptly after April 1, 2015 initial equity compensation to Employee in the aggregate amount of [•] options to purchase shares of Company Common Stock. These options shall be granted subject to the terms and conditions of the Company’s stock option plan then in effect, and the terms and conditions of the applicable option agreement, and will vest in accordance with the terms and schedule set forth in Exhibit A hereto. Such vesting schedule will be accelerated, to the extent provided in Section 8 of this agreement.

(d) Other and Additional Compensation. Subsections (a) and (c) above establish Employee’s compensation during the Term which shall not preclude the Board from awarding Employee a higher salary or any bonuses or stock options, restricted stock or other forms of additional equity awards in the discretion of the Board during the Term at any time. The Employee shall be eligible for an annual discretionary bonus (hereinafter referred to as the “Bonus”) with a target amount of [•] ([•]%) of the Base Salary , subject to standard deductions and withholdings, based on the Compensation Committee’s determination, in good faith, and based upon the Employee’s individual achievement and company performance objectives as set by the Board or the Compensation Committee, of whether the Employee has met such performance milestones as are established for the Employee by the Board or the Compensation Committee, in good faith, in consultation with the Employee (hereinafter referred to as the “Performance Milestones”). The Performance Milestones will be based on certain factors including, but not limited to, the Employee’s performance and the Company’s financial performance. The Employee’s Bonus target will be reviewed annually and may be adjusted by the Board or the Compensation Committee in its discretion, provided however, that the Bonus target may only be reduced upon Employee’s written consent. The Employee must be employed on the date the Bonus is awarded to be eligible for the Bonus, subject to the termination provisions hereof. Bonuses shall be paid during the calendar quarter following the calendar quarter for which such Bonus was earned when Performance Milestones are met during a calendar quarter. Fourth quarter Bonuses and Bonuses calculated on the basis of partial Performance Milestone satisfaction shall be paid within 75 days of fiscal year-end.

4. Employee Benefits. During the Term, Employee shall be entitled to participate at the same level as other senior executive officers of the Company in any group insurance, hospitalization, medical, health and accident, disability, fringe benefit and tax-qualified retirement plans or programs of the Company now existing or hereafter established to the extent that he is eligible under the general provisions thereof. For the term of this Agreement, Employee shall be entitled to paid vacation at the rate of (4) weeks per annum. In accordance with Company policy, unused vacation may not be carried over from year to year.

5. Expenses. The Company shall reimburse Employee for actual, reasonable out-of-pocket expenses incurred by him in the performance of his services for the Company upon the receipt of appropriate documentation of such expenses which shall be submitted in such form, and with such supporting documentation, as called for or required by Company policy.

6. Termination.

(a)

General. The Term shall end immediately upon Employee’s death. Employee’s employment may also be terminated by the Company with or without Cause or as a result of Employee’s Disability, as defined in Section 7 or by Employee with or without Good Reason (as such terms are defined below).

(b)

Notice of Termination. Either party shall give written notice of termination to the other party.

(c)

Notification of New Employer . In the event that Employee leaves the employ of the Company, Employee grants consent to notification by the Company to Employee’s new employer about his rights and obligations under this Agreement and the PIA (hereinafter defined).

7. Severance Benefits.

(a) Cause Defined. “Cause” means (i) willful malfeasance or willful misconduct by Employee in connection with his employment; (ii) Employee’s gross negligence in performing any of his duties under this Agreement; (iii) Employee’s conviction of, or entry of a plea of guilty to, or entry of a plea of nolo contendere with respect to, any crime other than a traffic violation or infraction which is a misdemeanor; (iv) Employee’s willful and deliberate violation of a Company policy, (v) Employee’s unintended but material breach of any written policy applicable to all employees adopted by the Company which is not cured to the reasonable satisfaction of the Board of Directors within thirty (30) business days after notice thereof; (vi) the Employee’s unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party as to which the Employee owes an obligation of nondisclosure as a result of the Employee’s relationship with the Company, (vii) the Employee’s willful and deliberate breach of his obligations under this Agreement, or (viii) any other material breach by Employee of any of his obligations in this Agreement which is not cured to the reasonable satisfaction of the Board of Directors within thirty (30) business days after notice thereof.

(b) Disability Defined. “Disability” shall mean (i) Employee’s incapacity due to a physical or mental condition and, if reasonable accommodation is required by law, after any reasonable accommodation, that results in Employee being substantially unable to perform his duties hereunder for six consecutive months (or for six months out of any nine month period) or (ii) a qualified independent physician mutually acceptable to the Company and Employee determines that Employee is incapacitated due to a physical or mental condition and, if reasonable accommodation is required by law, after any reasonable accommodation so as to be unable to regularly perform the duties of his position and such condition is expected to be of a permanent or near-permanent duration. Until such time as Employee is terminated for Disability under this paragraph (b), Employee shall continue to receive his Base Salary hereunder, provided that if the Company provides Employee with disability insurance coverage, payments of Employee’s Base Salary shall be reduced by the amount of any disability insurance payments received by Employee due to such coverage. The Company shall give Employee written notice of termination due to Disability which shall take effect sixty (60) days after the date it is sent to Employee unless Employee shall have returned to the performance of his duties hereunder during such sixty (60) day period (whereupon such notice shall become void). In the event that the Company terminates Employee’s employment as a result of his Disability, Employee shall be entitled to the same benefits as if his employment had been terminated by the Company without Cause.

(c) Good Reason Defined. For purposes of this Agreement, “Good Reason” shall mean, without Employee’s written consent: (i) there is a material reduction of the level of Employee’s compensation (excluding any bonuses) (except where there is a general reduction applicable to the management team generally, provided, however, that in no case may the Base Salary be reduced below the amount stated in Section 3(a)), (ii) there is a material reduction in Employee’s overall responsibilities or authority, or scope of duties (it being understood that the occurrence of a Change in Control shall not, by itself, necessarily constitute a reduction in Employee’s responsibilities or authority); or (iii) there is a material change in the principal geographic location at which Employee must perform his services (it being understood that the relocation of Employee to a facility or a location within forty (40) miles of the State Capitol Building in Denver, Colorado shall not be deemed material for purposes of this Agreement). No event shall be deemed to be “Good Reason” if the Company has cured the event (if susceptible to cure) within 30 days of receipt of written notice from Employee specifying the event or events which, absent cure, would constitute “Good Cause.”

(d) Accrued Compensation Defined. Accrued Compensation shall mean an amount which shall include all amounts earned or accrued by Employee through the date of termination of this Agreement but not paid as of such date, including (i) Base Salary, (ii) reimbursement for business expenses incurred by the Employee on behalf of the Company, pursuant to the Company’s expense reimbursement policy in effect at such time, (iii) any expense allowance pursuant to Company policy, (iv) accrued but unused vacation pay per Company policy, and (v) bonuses and incentive compensation earned and awarded prior to the date of termination. Accrued Compensation shall be paid on the first regular pay date after the date of termination (or earlier, if required by applicable law).

(e) Termination.

(i) Cause; Without Good Reason; Death; Disability. If the Company ends the Term for Cause, if Employee resigns as an employee of the Company for reasons other than an event of Good Reason, the Employee dies or Disability occurs , then the Company shall pay to Employee the Accrued Compensation but shall have no obligation to pay Employee any amount, whether for salary, benefits, bonuses, or other compensation or expense reimbursements of any kind, accruing after the end of the Term, and such rights shall, except as otherwise required by law or pursuant to the applicable award agreement or plan, be forfeited immediately upon the end of the Term. For the sake of clarity, any stock options, restricted stock or other equity compensation shall, to the extent vested on the date of resignation without Good Reason, the date the Company ends the Term for Cause, or the date of Employee’s death or Disability, remain outstanding and exercisable to the extent provided in the applicable award agreement or plan, by the Employee or his personal representative or executor.

(ii) Without Cause; Good Reason. In the event that the Company terminates Employee’s employment hereunder without Cause, or the Employee terminates his employment with Good Reason, he shall be entitled to the Accrued Compensation and, subject to Section 21 and 22 below,

(A) A lump sum payment equal to two times his Base Salary in effect at the date of termination, less applicable withholding

(B) To the extent permitted by the Company’s health insurance carrier and if such coverage would not result in penalties to the Company under the Patient Protection and Affordable Care Act, continued participation (via state or federal insurance continuation laws such as COBRA, to the extent available) in the health and welfare plans (or comparable plans, if continued participation in the Company’s plans is not available) provided by the Company to Employee at the time of termination for a period of two years from the date of termination or, if earlier, until he is eligible for comparable coverage with a subsequent employer. The Company agrees to reimburse the payments Employee makes for such coverage, whether via continuation or separate comparable policy. Premium reimbursements shall be made by the Company to Employee consistent with the Company’s normal expense reimbursement policy, provided that Employee submits documentation to the Company substantiating his payments for insurance coverage. Employee shall give the Company prompt notice of his eligibility for comparable coverage.

(C) All vested stock options shall remain exercisable from the date of termination until the expiration date of the applicable award. So long as the Section 8 below does not apply, then all options which are unvested at the date of termination Without Cause or for Good Reason shall be accelerated as of the date of termination such that the number of option shares equal to 1/24 ^th the number of option shares multiplied by the number of full months of Employee’s employment hereunder shall be deemed vested and immediately exercisable by the Employee. Any unvested options over and above the foregoing shall be cancelled and of no further force or effect, and shall not be exercisable by the Employee.

(D) Any severance payments and/or other separation benefits contemplated by this Agreement are conditional on Employee: (i) continuing to comply with the terms of this Agreement and the PIA (as defined herein); (ii) delivering prior to or contemporaneously with any such severance payments, and not revoking, (x) a customary general release of claims relating to Employee’s employment and/or this Agreement against the Company or its successor, its subsidiaries and their respective directors, officers and stockholders and (y) a customary affirmation of Employee’s continuing obligations hereunder and under the PIA.

Unless otherwise required by law, no severance payments and/or benefits under this Agreement will be paid and/or provided until after the expiration of any relevant revocation period. Subject to the effectiveness of the release, the severance payments shall be paid on the first payroll date that begins 30 days after Employee’s termination of employment.

8. Change in Control Payments. The provisions of this paragraph 8 set forth the terms of an agreement reached between Employee and the Company regarding Employee’s rights and obligations upon the occurrence of a “Change in Control” (as hereinafter defined) of the Company during the Term. These provisions are intended to assure and encourage in advance Employee’s continued attention and dedication to his assigned duties and his objectivity during the pendency and after the occurrence of any such Change in Control. The following provisions shall apply in the event of a Change in Control, in addition to any payment or benefit that may be required pursuant to Section 7.

(a) Equity. Upon the occurrence of a Change in Control, all stock options, restricted stock and other stock-based grants to Employee by the Company or that may be granted in the future shall, irrespective of any provisions of his award agreements, immediately and irrevocably vest and become exercisable and any restrictions thereon shall lapse.

(b) Definitions. For purposes of this paragraph 8, the following terms shall have the following meanings:

“Change in Control” shall mean any of the following:

(1) the acquisition by any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (the “Acquiring Person”), other than the Company, or any of its Subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3- promulgated under the Exchange Act) of 50% or more of the combined voting power or economic interests of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (excluding any issuance of securities by the Company in a transaction or series of transactions made principally for bona fide equity financing purposes ; or

(2) the acquisition of the Company by another entity by means of any transaction or series of related transactions to which the Company is party (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any issuance of securities by the Company in a transaction or series of transactions made principally for bona fide equity financing purposes ) other than a transaction or series of related transactions in which the holders of the voting securities of the Company outstanding immediately prior to such transaction or series of related transactions retain, immediately after such transaction or series of related transactions, as a result of shares in the Company held by such holders prior to such transaction or series of related transactions, at least a majority of the total voting power represented by the outstanding voting securities of the Company or such other surviving or resulting entity (or if the Company or such other surviving or resulting entity is a wholly-owned subsidiary immediately following such acquisition, its parent); or

(3) the sale or other disposition of all or substantially all of the assets of the Company in one transaction or series of related transactions.

9. Proprietary Information and Inventions Agreement . As a condition of Employee’s employment with the Company, Employee agrees to sign the Company’s standard form of Proprietary Information and Inventions Agreement (“PIA”).

10. Successors and Assigns.

(a) Employee. This Agreement is a personal contract, and the rights and interests that the Agreement accords to Employee may not be sold, transferred, assigned, pledged, encumbered, or hypothecated by him. All rights and benefits of Employee shall be for the sole personal benefit of Employee, and no other person shall acquire any right, title or interest under this Agreement by reason of any sale, assignment, transfer, claim or judgment or bankruptcy proceedings against Employee. Except as so provided, this Agreement shall inure to the benefit of and be binding upon Employee and his personal representatives, distributees and legatees.

(b) The Company. This Agreement shall be binding upon the Company and inure to the benefit of the Company and of its successors and assigns, including (but not limited to) any Company that may acquire all or substantially all of the Company’s assets or business or into or with which the Company may be consolidated or merged. Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes. For this purpose, “successor” means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company.

11. Entire Agreement. This Agreement (together with the equity award agreements referred to herein) represents the entire agreement between the parties concerning Employee’s employment with the Company and supersedes all prior negotiations, discussions, understanding and agreements, whether written or oral, between Employee and the Company relating to the subject matter of this Agreement.

12. Amendment or Modification, Waiver. No provision of this Agreement may be amended or waived unless such amendment or waiver is agreed to in writing signed by Employee and by a duly authorized officer of the Company. No waiver by any party to this Agreement or any breach by another party of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of a similar or dissimilar condition or provision at the same time, any prior time or any subsequent time.

13. Notices. Any notice to be given under this Agreement shall be in writing and delivered personally or sent by overnight courier or registered or certified mail, postage prepaid, return receipt requested, addressed to the party concerned at the address indicated below, or to such other address of which such party subsequently may give notice in writing:

If to Employee: [ ]

To the address specified in the payroll records of the Company.

If to the Company:

Rosewind Corporation

373 Inverness Parkway

Suite 200

Englewood, Colorado 80112

Any notice delivered personally or by overnight courier shall be deemed given on the date delivered and any notice sent by registered or certified mail, postage prepaid, return receipt requested, shall be deemed given on the date mailed.

14. Severability. If any provision of this Agreement or the application of any such provision to any party or circumstances shall be determined by any court of competent jurisdiction or arbitrator acting pursuant to Section 19 below to be invalid and unenforceable to any extent, the remainder of this Agreement or the application of such provision to such person or circumstances other than those to which it is so determined to be invalid and unenforceable shall not be affected, and each provision of this Agreement shall be validated and shall be enforced to the fullest extent permitted by law. If for any reason any provision of this Agreement containing restrictions is held to cover an area or to be for a length of time that is unreasonable or in any other way is construed to be too broad or to any extent invalid, such provision shall not be determined to be entirely null, void and of no effect; instead, it is the intention and desire of both the Company and Employee that, to the extent that the provision is or would be valid or enforceable under applicable law, any court of competent jurisdiction or arbitrator acting pursuant to Section 19 below shall construe and interpret or reform this Agreement to provide for a restriction having the maximum enforceable area, time period and such other constraints or conditions (although not greater than those contained currently contained in this Agreement) as shall be valid and enforceable under the applicable law.

15. Survivorship. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations.

16. Headings. All descriptive headings of sections and paragraphs in this Agreement are intended solely for convenience of reference, and no provision of this Agreement is to be construed by reference to the heading of any section or paragraph.

17. Withholding Taxes. All salary, benefits, reimbursements and any other payments to Employee under this Agreement shall be subject to all applicable payroll and withholding taxes and deductions required by any law, rule or regulation of and federal, state or local authority.

18. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together constitute one and same instrument. The parties agree that facsimile signatures shall have the same force and effect as original signatures.

19. Applicable Law; Arbitration. The validity, interpretation and enforcement of this Agreement and any amendments or modifications hereto shall be governed by the laws of the State of Colorado, as applied to a contract executed within and to be performed in such State. The parties agree that any disputes shall be definitively resolved by binding arbitration before the American Arbitration Association in Denver, Colorado in accordance with its rules of arbitration procedure then in effect. The parties consent to the jurisdiction to the federal courts of the District of Colorado or, if there shall be no jurisdiction, to the state courts located in Arapahoe County, Colorado, to enforce any arbitration award rendered with respect thereto. Each party shall choose one arbitrator and the two arbitrators shall choose a third arbitrator. All costs and fees related to such arbitration (and judicial enforcement proceedings, if any) shall be borne by the Company unless Employee’s claim is deemed to be frivolous by the arbitrator(s) or judge.

20. Legal Fees. The Company shall pay the reasonable expenses of Employee’s counsel in negotiating this Agreement.

21. Section 409A.

(a) Anything in this Agreement to the contrary notwithstanding, if at the time of Employee’s separation from service within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), the Company determines that Employee is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that Employee becomes entitled to under this Agreement on account of Employee’s separation from service would be considered deferred compensation otherwise subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six months and one day after Employee’s separation from service, or (B) Employee’s death. If any such delayed cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.

which the expense was incurred. The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year (except for any lifetime or other aggregate limitation applicable to medical expenses). Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

(c) To the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon Employee’s termination of employment, then such payments or benefits shall be payable only upon Employee’s “separation from service.” The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A 1(h).

(d) The parties intend that this Agreement will be administered in accordance with Section 409A of the Code. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A 2(b)(2). The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.

22. Application of Internal Revenue Code Section 280G. If any payment or benefit Employee would receive pursuant to a Change in Control from the Company or otherwise (“ Payment ”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “ Excise Tax ”), then such Payment shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Employee’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the manner that results in the greatest economic benefit for Employee. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata.

In the event it is subsequently determined by the Internal Revenue Service that some portion of the Reduced Amount as determined pursuant to clause (x) in the preceding paragraph is subject to the Excise Tax, Employee agrees to promptly return to the Company a sufficient amount of the Payment so that no portion of the Reduced Amount is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount is determined pursuant to clause (y) in the preceding paragraph, Employee will have no obligation to return any portion of the Payment pursuant to the preceding sentence.

Unless Employee and the Company agree on an alternative accounting firm, the accounting firm engaged by the Company for general tax compliance purposes as of the day prior to the effective date of the Change in Control shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Company shall appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.

The Company shall use commercially reasonable efforts to cause the accounting firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to the Employee and the Company within fifteen (15) calendar days after the date on which Employee’s right to a Payment is triggered (if requested at that time by the Employee or the Company) or such other time as requested by Employee or the Company.

23. Indemnification. As a condition to the effectiveness of this Agreement, the Company and Employee shall enter into a mutually acceptable indemnification agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.


ROSEWIND CORPORATION		EMPLOYEE

By:
	Name: Michael Macaluso	Name:
	Chairman,
	Board of Directors

[Signature page to Employment Agreement]

EXHIBIT A

Terms of Equity Compensation

Management equity grant :

•

[•] total options to purchase shares of the Company’s common stock. The strike price for all options will be the last sale price of the Company’s common stock as reported on April [•], 2015 and in accordance with the terms of the Company’s Stock and Incentive Plan.

•

All options fully vest upon Change in Control, death, Disability, termination with or without Cause, termination for Good Reason

•

[•] options are fully vested on the Effective Date of this agreement

•

[•] options vest 365 days thereafter

•

[•] options vest 730 days thereafter

Exhibit F

ASSIGNMENT AND ASSUMPTION AGREEMENT

This ASSIGNMENT AND ASSUMPTION AGREEMENT (this “ Assignment ”) is dated as of April [•], 2015, by and between Vyrix Pharmaceuticals, Inc., a Delaware corporation (“ Vyrix ”), Luoxis Diagnostics, a Delaware corporation (“ Luoxis ” and, together with Vyrix, each an “ Assignor ”), Rosewind Corporation, a Colorado corporation (“ Assignee ”), and Ampio Pharmaceuticals, Inc., a Delaware corporation (“ Counterparty ”).

WHEREAS, in connection with that certain Agreement and Plan of Merger by and among Assignors, Assignee, and the other parties thereto, dated April [•], 2015, each Assignor desires, for good and valuable consideration, the receipt and adequacy which are acknowledged, to assign and transfer all of its rights and interests in and under the Contracts (as defined below) to Assignee and Assignee desires to accept such assignment and transfer and to assume the Contracts as of the date hereof, each in accordance with the terms and conditions of this Assignment.

WHEREAS, each Contract provides that such Contract may not be assigned without the prior written consent of the parties to the Contract. As such, this Assignment requires the written consent of Counterparty as the counterparty to each Contract.

NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions set forth herein, the parties hereto agree as follows:

1. Assignment . Each Assignor hereby sells, assigns, transfers and conveys to Assignee, its successors and assigns, effective as of the date hereof, all of Assignor’s rights, title and interest in and under the following contracts:

(a) Services Agreement between Ampio Pharmaceuticals, Inc. and Vyrix Pharmaceuticals, Inc., dated as of January 1, 2014 (the “ Vyrix Contract ”); and

(b) Services Agreement between Ampio Pharmaceuticals, Inc. and Luoxis Diagnostics, Inc., dated as of January 1, 2013 (the “ Luoxis Contract ” and, together with the Vyrix Contract, the “ Contracts ”).

2. Assumption . Assignee, for itself and its successors and assigns, hereby accepts each Assignor’s assignment and assumes and agrees to be bound by and solely perform, effective as of the date hereof, all of the obligations, liabilities and duties of Assignor under each of the Contracts.

3. Consent . Counterparty consents and agrees that each Contract shall remain in full force and effect in accordance with its terms notwithstanding this Assignment and that Counterparty waives any termination or other rights that it may have under the Contracts that arise solely by virtue of this Assignment.

4. Governing Law . This Assignment shall be governed by, construed and enforced in accordance with the laws of the State of Delaware.

5. Counterparts . This Assignment may be signed in any number of counterparts, all of which together shall constitute one and the same instrument. Any party may execute and deliver this Assignment by an executed signature page transmitted by electronic scan (pdf) or a facsimile machine.

6. Binding Effect . If and when this Assignment becomes effective, this Assignment shall be binding upon each Assignor, its successors and assigns, and shall inure to the benefit of Assignee, its successors and assigns.

[ Signature page follows. ]

IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be executed by their respective officers thereunto duly authorized, as of the date first written above.


ASSIGNORS:

VYRIX PHARMACEUTICALS, INC.

By:
Name: Jarrett Disbrow
Title: Chief Executive Officer

LUOXIS DIAGNOSTICS, INC.

By:
Name: Joshua R. Disbrow
Title: Chief Executive Officer

ASSIGNEE:

ROSEWIND, CORPORATION

By:
Name: James B. Wiegand
Title: President

COUNTERPARTY:

AMPIO PHARMACEUTICALS, INC.

By:
Name: Gregory A. Gould
Title: Chief Executive Officer

[S IGNATURE P AGE TO A SSIGNMENT AND A SSUMPTION A GREEMENT ]

Exhibit 2.2

CERTIFICATE OF MERGER

ROSEWIND MERGER SUB L, INC.

WITH AND INTO

LUOXIS DIAGNOSTICS, INC.

* * * * * * *

Pursuant to Section 251 of the General Corporation Law of the State of Delaware (the “ DGCL ”), the undersigned corporation does hereby certify that:

1. The constituent corporations (the “ Constituent Corporations ”) participating in the merger herein certified (the “ Merger ”) are:

a. Rosewind Merger Sub L, Inc., which is incorporated under the laws of the State of Delaware (“ Merger Sub ”); and

b. Luoxis Diagnostics, Inc., which is incorporated under the laws of the State of Delaware (“ Luoxis ”).

3. The name of the surviving corporation in the Merger is Luoxis Diagnostics, Inc.

5. The Merger shall be effective upon the filing of this Certificate of Merger with the Secretary of the State of Delaware.

6. An executed copy of the Merger Agreement is on file at an office of the aforesaid surviving corporation, the address of which is as follows:

Luoxis Diagnostics, Inc.

373 Inverness Parkway, Suite 200

Englewood, Colorado 80112

7. A copy of the Merger Agreement will be furnished by the aforesaid surviving corporation, on request, and without cost, to any stockholder of either of the Constituent Corporations.

[ Signature page follows .]

IN WITNESS WHEREOF, Luoxis Diagnostics, Inc. has caused this Certificate of Merger to be executed by its duly authorized officer this 16 ^th day of April, 2015.


LUOXIS DIAGNOSTICS, INC.

By:		/s/ Joshua R. Disbrow
		Name: Joshua R. Disbrow
		Title: President and Chief Executive Officer

S IGNATURE P AGE TO R OSEWIND

M ERGER S UB L C ERTIFICATE OF M ERGER

EXHIBIT A

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

LUOXIS DIAGNOSTICS, INC.


FIRST:		The name of this corporation shall be: Luoxis Diagnostics, Inc.

SECOND :		Its registered office in the State of Delaware is to be located at:

		1209 Orange Street, in the City of Wilmington, County of New Castle, 19801, and its registered agent at such address is: The Corporation Trust Company.

THIRD :		The purpose or purposes of the corporation shall be:

		To carry on any and all business and to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH :		The total number of shares of stock which this corporation is authorized to issue is:

		One Thousand (1,000) shares of Common Stock, par value $0.001 per share.

FIFTH :		In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors is expressly authorized to adopt, amend or repeal the by-laws of the corporation.

SIXTH :		Elections of directors need not be by written ballot unless the by-laws of the corporation shall so provide.

SEVENTH :		A director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. If the Delaware General Corporation Law is amended after the effective date of this Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law of the State of Delaware. No amendment, modification or repeal of this Article EIGHTH shall adversely affect the rights and protection afforded to a director of the corporation under this Article EIGHTH Section for acts or omissions occurring prior to such amendment, modification or repeal.


EIGHTH:		The corporation reserves the right to amend or repeal this Certificate of Incorporation in the manner now or hereafter prescribed by statute and this Certificate of Incorporation, and all rights conferred upon stockholders herein are granted subject to this reservation. Whenever any vote of the holders of capital stock of the corporation is required to amend or repeal any provision of this Certificate of Incorporation, and in addition to any other vote of holders of capital stock that is required by this Certificate of Incorporation or by law, such amendment or repeal shall require the affirmative vote of the majority of the outstanding shares of capital stock entitled to vote on such amendment or repeal, and the affirmative vote of the majority of the outstanding shares of each class entitled to vote thereon as a class, at a duly constituted meeting of stockholders called expressly for such purpose.