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x
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the Quarterly Period Ended June 30, 2018
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Or
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¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the transition period from ________ to ___________
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Delaware
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13-3864870
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(State or other jurisdiction of
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(IRS Employer Identification. No.)
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incorporation or organization)
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31 East 62nd Street
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10065
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New York, NY
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(zip code)
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(Address of principal executive offices)
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Large accelerated filer
¨
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Accelerated filer
x
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Non-accelerated filer
¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
¨
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Emerging growth company
¨
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Page No.
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June 30, 2018
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December 31, 2017
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||||
ASSETS
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||||
Current assets
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||||
Cash and cash equivalents
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$
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10,581,112
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$
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19,857,833
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Restricted cash, short-term
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11,028,824
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10,701,305
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Accounts receivable
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2,128,957
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1,802,107
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Inventory
|
2,908,249
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2,983,249
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Deferred costs
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94,339,146
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—
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Prepaid expenses and other current assets
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1,389,933
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2,019,999
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Total current assets
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122,376,221
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37,364,493
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||||
Property, plant and equipment, net
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132,574
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138,640
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Restricted cash, long-term
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1,701,843
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6,542,448
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Deferred costs
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—
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96,592,334
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Deferred tax asset, net
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2,441,740
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2,431,963
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Goodwill
|
898,334
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898,334
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Other assets
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789,913
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702,167
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Total assets
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$
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128,340,625
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$
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144,670,379
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LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
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||||
Current liabilities
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|
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|
||||
Accounts payable
|
$
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1,412,595
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$
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1,328,867
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Accrued expenses and other current liabilities
|
3,288,437
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4,226,261
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Deferred revenue
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376,562,998
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1,255,318
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Total current liabilities
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381,264,030
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6,810,446
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Deferred revenue
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—
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377,641,485
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Warrant liability
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14,408,991
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11,466,162
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Other liabilities
|
704,858
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840,253
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Long-term debt
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73,280,477
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71,050,324
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Total liabilities
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469,658,356
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467,808,670
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Commitments and contingencies
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||||
Stockholders’ deficiency
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||||
Common stock ($.0001 par value, 600,000,000 shares authorized, 79,160,058 and 79,039,000 issued and outstanding at June 30, 2018, and December 31, 2017, respectively)
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7,916
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7,904
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Additional paid-in capital
|
214,906,962
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214,229,581
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Accumulated deficit
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(556,232,609
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)
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(537,375,776
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)
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Total stockholders’ deficiency
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(341,317,731
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)
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(323,138,291
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)
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Total liabilities and stockholders’ deficiency
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$
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128,340,625
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$
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144,670,379
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Three months ended June 30,
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Six months ended June 30,
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||||||||||||
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2018
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2017
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2018
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2017
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||||||||
Revenues
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|
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||||||||
Research and development
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$
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2,661,216
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$
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4,264,561
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$
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4,409,150
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$
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9,466,347
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||||||||
Operating expenses
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||||||||
Selling, general and administrative
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2,880,394
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3,058,244
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5,936,940
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|
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5,928,113
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|
||||
Research and development
|
3,312,181
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5,067,838
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6,320,007
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11,428,327
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||||
Patent expenses
|
178,332
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197,017
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396,805
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437,615
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||||
Total operating expenses
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6,370,907
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8,323,099
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12,653,752
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17,794,055
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||||
Operating loss
|
(3,709,691
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)
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(4,058,538
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)
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(8,244,602
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)
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(8,327,708
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)
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||||
Gain (loss) from change in fair value of warrant liability
|
360,285
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294,356
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(2,942,829
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)
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(331,853
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)
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Interest expense
|
(3,843,161
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)
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(3,652,496
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)
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(7,591,979
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)
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(7,261,412
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)
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||||
Other income, net
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144,152
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8,066
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146,387
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12,484
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Loss before income taxes
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(7,048,415
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)
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(7,408,612
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)
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(18,633,023
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)
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(15,908,489
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)
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||||
Provision for income taxes
|
(2,849
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)
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(92,825
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)
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(497
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)
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(207,895
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)
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Net and comprehensive loss
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$
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(7,051,264
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)
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$
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(7,501,437
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)
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$
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(18,633,520
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)
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$
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(16,116,384
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)
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Loss per share: basic and diluted
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$
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(0.09
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)
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$
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(0.10
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)
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$
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(0.24
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)
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$
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(0.20
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)
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Weighted average shares outstanding: basic and diluted
|
79,094,230
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78,840,312
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79,066,768
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78,808,903
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Six months ended June 30,
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||||||
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2018
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2017
|
||||
Cash flows from operating activities:
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||||
Net loss
|
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$
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(18,633,520
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)
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$
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(16,116,384
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)
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Adjustments to reconcile net loss to net cash (used in) operating activities:
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|
|
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|
||||
Depreciation and other amortization
|
|
33,929
|
|
|
75,837
|
|
||
Increase in fair value of warrant liability
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2,942,829
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|
|
331,853
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|
||
Stock-based compensation
|
|
689,721
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|
|
373,492
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|
||
Deferred income taxes (benefit) provision
|
|
(9,777
|
)
|
|
21,190
|
|
||
Write down of inventory
|
|
—
|
|
|
536,000
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|
||
Non-cash interest expense
|
|
2,230,153
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|
|
2,230,154
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|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
(219,547
|
)
|
|
1,385,389
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|
||
Inventory
|
|
—
|
|
|
10,257,156
|
|
||
Deferred costs
|
|
54,776
|
|
|
(10,540,755
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)
|
||
Prepaid expenses and other current assets
|
|
705,066
|
|
|
382,780
|
|
||
Accounts payable, accrued expenses and other current liabilities
|
|
(854,097
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)
|
|
(528,807
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)
|
||
Deferred revenue
|
|
(553,755
|
)
|
|
8,996,221
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|
||
Other liabilities
|
|
(135,395
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)
|
|
(9,666
|
)
|
||
Net cash (used in) operating activities
|
|
(13,749,617
|
)
|
|
(2,605,540
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Capital expenditures
|
|
(27,863
|
)
|
|
(39,326
|
)
|
||
Net cash (used in) investing activities
|
|
(27,863
|
)
|
|
(39,326
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Net proceeds from exercise of stock options
|
|
—
|
|
|
27,497
|
|
||
Buy back of stock options
|
|
—
|
|
|
(84,000
|
)
|
||
Payment of employee tax obligations for common stock tendered
|
|
(12,327
|
)
|
|
(193,052
|
)
|
||
Net cash (used in) financing activities
|
|
(12,327
|
)
|
|
(249,555
|
)
|
||
Net decrease in cash and cash equivalents
|
|
(13,789,807
|
)
|
|
(2,894,421
|
)
|
||
Cash, cash equivalents and restricted cash at the beginning of period
|
|
37,101,586
|
|
|
56,174,046
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
23,311,779
|
|
|
$
|
53,279,625
|
|
|
|
As of June 30, 2018
|
|
||
Balance at December 31, 2017
|
|
$
|
378,896,803
|
|
|
Cumulative effect of accounting change
|
|
(1,780,050
|
)
|
|
|
Billings in advance of revenue recognized
|
|
186,526
|
|
|
|
Revenue recognized
|
|
(740,281
|
)
|
|
|
Balance at June 30, 2018
|
|
$
|
376,562,998
|
|
|
|
|
As of
|
||||||
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Cash and cash equivalents
|
|
$
|
10,581,112
|
|
|
$
|
19,857,833
|
|
Restricted cash - short-term
|
|
11,028,824
|
|
|
10,701,305
|
|
||
Restricted cash - long-term
|
|
1,701,843
|
|
|
6,542,448
|
|
||
Cash, cash equivalents and restricted cash
|
|
$
|
23,311,779
|
|
|
$
|
37,101,586
|
|
|
|
|
|
|
||||
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Cash and cash equivalents
|
|
$
|
30,865,937
|
|
|
$
|
28,701,824
|
|
Restricted cash - short-term
|
|
10,322,289
|
|
|
10,138,890
|
|
||
Restricted cash - long-term
|
|
12,091,399
|
|
|
17,333,332
|
|
||
Cash, cash equivalents and restricted cash
|
|
$
|
53,279,625
|
|
|
$
|
56,174,046
|
|
|
As of
|
|||||
|
June 30, 2018
|
|
December 31, 2017
|
|||
Work in-process
|
$
|
1,950,445
|
|
|
2,025,445
|
|
Finished goods
|
957,804
|
|
|
957,804
|
|
|
Inventory
|
$
|
2,908,249
|
|
|
2,983,249
|
|
|
As of
|
||||||
|
June 30, 2018
|
|
December 31, 2017
|
||||
Leasehold improvements
|
$
|
2,420,028
|
|
|
$
|
2,420,028
|
|
Computer equipment
|
718,241
|
|
|
701,762
|
|
||
Furniture and fixtures
|
363,588
|
|
|
363,588
|
|
||
|
3,501,857
|
|
|
3,485,378
|
|
||
Less - accumulated depreciation
|
(3,369,283
|
)
|
|
(3,346,738
|
)
|
||
Property, plant and equipment, net
|
$
|
132,574
|
|
|
$
|
138,640
|
|
|
As of
|
||||||
|
June 30, 2018
|
|
December 31, 2017
|
||||
Bonus
|
$
|
893,888
|
|
|
$
|
2,538,340
|
|
Accrued interest
|
936,695
|
|
|
87,955
|
|
||
Professional fees
|
372,204
|
|
|
381,980
|
|
||
Vacation
|
393,214
|
|
|
328,588
|
|
||
Other (primarily R&D vendors and CMOs)
|
692,436
|
|
|
889,398
|
|
||
Accrued expenses and other current liabilities
|
$
|
3,288,437
|
|
|
$
|
4,226,261
|
|
•
|
Level 1 – Quoted prices for identical instruments in active markets.
|
•
|
Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations where inputs are observable or where significant value drivers are observable.
|
•
|
Level 3 – Instruments where significant value drivers are unobservable to third parties.
|
|
Fair Value Measurements of Level 3 liability classified warrant
|
||
Warrant liability at December 31, 2017
|
$
|
11,466,162
|
|
Increase in fair value of warrant liability
|
2,942,829
|
|
|
Warrant liability at June 30, 2018
|
$
|
14,408,991
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Stock Options
|
1,038,071
|
|
|
1,541,472
|
|
|
1,050,202
|
|
|
1,625,254
|
|
Stock-Settled Stock Appreciation Rights
|
160,939
|
|
|
360,031
|
|
|
161,662
|
|
|
360,031
|
|
Restricted Stock Units
|
1,473,155
|
|
(1)
|
1,332,817
|
|
|
1,472,581
|
|
|
1,320,211
|
|
Warrants
|
2,690,950
|
|
|
2,690,950
|
|
|
2,690,950
|
|
|
2,690,950
|
|
|
Lease Termination liability
|
||
Balance at December 31, 2017
|
$
|
814,622
|
|
Charges (included in selling, general and administrative expenses)
|
7,534
|
|
|
Cash payments, net of sublease income
|
(156,305
|
)
|
|
Balance at June 30, 2018
|
$
|
665,851
|
|
Exhibit
No.
|
|
Description
|
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
Second Amendment to Credit Agreement dated June 25, 2018
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
SIGA TECHNOLOGIES, INC.
|
||
|
|
(Registrant)
|
||
|
|
|
||
Date:
|
August 7, 2018
|
By:
|
/s/ Daniel J. Luckshire
|
|
|
|
|
Daniel J. Luckshire
|
|
|
|
|
Executive Vice President and
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer and
|
|
|
|
|
Principal Accounting Officer)
|
|
By:
/s/ Daniel J. Luckshire
_____
|
|
|
|
Name: Daniel J. Luckshire
|
|
|
Title: Executive Vice President and Chief Financial Officer
|
|
|
|
|
By:
/s/ Emily Ergang Pappas
_____
|
|
|
|
Name: Emily Ergang Pappas
|
|
|
Title: Associate Counsel _______________________
|
|
By: Oaktree Fund GP IIA, LLC
Its: Manager
By: Oaktree Fund GP II, L.P.
Its: Managing Member
By:
/s/ Nilay Mehta
___
Name: Nilay Mehta
Title: Authorized Signatory
By:
/s/ Edgar Lee
|
|
|
|
Name: Edgar Lee
|
|
|
Title: Authorized Signatory
|
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of SIGA Technologies, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 7, 2018
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/s/ Phillip L. Gomez, Ph.D.
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Phillip L. Gomez, Ph.D.
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Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of SIGA Technologies, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: August 7, 2018
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/s/ Daniel J. Luckshire
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Daniel J. Luckshire
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Executive Vice President and
Chief Financial Officer
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Phillip L. Gomez, Ph.D.
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Phillip L. Gomez, Ph.D.
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Chief Executive Officer
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August 7, 2018
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Daniel J. Luckshire
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Daniel J. Luckshire
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Executive Vice President and Chief Financial Officer
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August 7, 2018
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