SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarter Ended Commission File No. 0-23047
June 30, 2001
SIGA Technologies, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-3864870
(State or other jurisdiction of (IRS Employer Id. No.)
incorporation or organization)
420 Lexington Avenue, Suite 620
New York, NY 10170
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (212) 672-9100
Securities registered pursuant to Section 12(b) of the Act:
None
(Title of Class)
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.0001 par value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|.
As of August 10, 2001 the registrant had outstanding 8,770,386 shares of Common
Stock.
================================================================================
SIGA TECHNOLOGIES INC.
(A development stage company)
BALANCE SHEET
June 30, December 31,
2001 2000
------------ ------------
Unaudited
ASSETS
Current Assets
Cash and cash equivalents ......................................... $ 1,184,228 $ 1,707,385
Accounts receivable ............................................... 26,312 37,800
Prepaid expenses .................................................. 166,628 5,644
------------ ------------
Total current assets ............................................. 1,377,168 1,750,829
Equipment, net .................................................... 872,778 1,027,702
Investments ....................................................... 275,106 275,106
Other assets ...................................................... 159,983 156,556
------------ ------------
Total assets ..................................................... $ 2,685,035 $ 3,210,193
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable .................................................. $ 340,854 $ 209,278
Accrued expenses .................................................. 192,143 305,912
Capital lease obligations ......................................... 366,683 391,407
Deferred Revenue ................................................. 5,000 450,000
------------ ------------
Total current liabilities ........................................ 904,680 1,356,597
6% Convertible Debt .............................................. 78,010 719,561
Accrued Debenture Interest ....................................... 8,500 80,281
Non current capital lease obligations ............................ -- 129,018
------------ ------------
Total liabilities ............................................. 991,190 2,285,457
------------ ------------
Commitments and contingencies ........................................ -- --
Stockholders' equity
Preferred stock ($.0001 par value, 10,000,000 shares authorized,
935,521 issued and outstanding at June 30, 2001) ................. 938,676 --
Common stock ($.0001 par value, 50,000,000 shares authorized,
8,046,138 and 7,471,837 issued and outstanding at June 30, 2001
and December 31, 2000, respectively) ........................... 805 747
Additional paid-in capital ........................................ 24,378,144 23,793,983
Deferred Compensation ............................................ (294,361) (428,425)
Deficit accumulated during the development stage .................. (23,329,419) (22,441,569)
------------ ------------
Total stockholders' equity ....................................... 1,693,845 924,736
------------ ------------
Total liabilities and stockholders' equity ....................... $ 2,685,035 $ 3,210,193
============ ============
The accompanying notes are an integral part of these financial statements
SIGA TECHNOLOGIES INC.
(A development stage company)
STATEMENT OF OPERATIONS
For The Period
December 28,
1995 (Date of
Three months ended Six months ended Inception) to
June 30, June 30, June 30,
2001 2000 2001 2000 2001
------------ ------------ ------------ ------------ ------------
Unaudited Unaudited Unaudited Unaudited Unaudited
Revenues
Research and Development Contracts $ 682,500 $ 90,373 $ 987,000 $ 171,173 $ 3,114,681
------------ ------------ ------------ ------------ ------------
Operating expenses
General and administrative 635,245 966,115 700,600 1,777,347 13,415,479
Research and development 428,937 391,703 859,547 1,154,630 11,135,435
Patent preparation fees 63,317 37,780 80,938 64,117 1,318,429
Settlement of litigation 97,696
------------ ------------ ------------ ------------ ------------
Total operating expenses 1,127,499 1,395,598 1,641,085 2,996,094 25,967,039
------------ ------------ ------------ ------------ ------------
Operating loss (444,999) (1,305,225) (654,085) (2,824,921) (22,852,358)
Interest income/(expense) (74,660) (141,494) (233,765) (259,730) (388,130)
Loss on impairment of investment (155,591)
Other Income/Gain on sale of securities -- -- -- -- 66,660
------------ ------------ ------------ ------------ ------------
Net loss (519,659) (1,446,719) (887,850) (3,084,651) (23,329,419)
------------ ------------ ------------ ------------ ------------
Weighted average shares 7,807,470 7,273,165 7,668,049 6,961,228
------------ ------------ ------------ ------------
Net Loss per Share (0.07) (0.20) (0.12) (0.44)
The accompanying notes are an integral part of these financial statements
SIGA TECHNOLOGIES INC.
(A development stage company)
STATEMENT OF CASH FLOWS
For The Period
December 28,
1995 (Date of
Six month ended Inception) to
June 30, June 30,
2001 2000 2001
------------------------------ -------------
Unaudited Unaudited
Cash flows from operating activities:
Net loss (887,850) $ (3,084,651) $(23,329,419)
Adjustments to reconcile net loss to net -- -- --
cash used in operating activities: -- -- --
Depreciation 154,924 181,891 1,105,810
Stock, options & warrant compensation (245,098) 491,819 2,063,902
Loss on impairment of investment -- -- 155,591
Loss on write-off of capital equipment -- -- 97,969
Amortization of debt discount 220,872 275,103 943,184
Purchase of rights to certain technology -- -- 1,457,458
Realized gain on marketable securities -- -- (66,660)
Non-cash research and development -- -- 500,344
Changes in assets and liabilities: -- -- --
Accounts receivable 11,488 22,757 (26,312)
Prepaid expenses and other current assets (160,984) (6,700) (166,628)
Other assets (3,427) (4,246) (159,982)
Accounts payable and accrued expenses 17,807 (173,935) 532,996
Deferred Revenue (445,000) 245,000 5,000
Accrued Interest 20,391 37,500 100,672
Deferred Compensation -- -- --
------------------------------ -------------
Net cash used in operating activities (1,316,877) (2,015,462) (16,786,075)
------------------------------ -------------
Cash flows from investing activities:
Capital expenditures -- (22,009) (2,157,254)
Sale (purchase) of investment securities -- -- 66,660
Investment in Open-I-Media -- -- (170,000)
------------------------------ -------------
Net cash flow used in investing activities -- (22,009) (2,260,594)
---------------------------------------------
Cash flows from financing activities:
Net proceeds from issuance of common stock 850,003 3,000,000 18,213,059
Receipts of stock subscriptions outstanding -- -- 1,248
Gross proceeds from sale of convertible debentures -- 1,500,000 1,500,000
Proceeds from exercise of options 97,459 35,505 150,233
Net proceeds from sale of warrants -- 52,174 52,174
Convertible debentures and warrants issuance costs -- (52,500) (52,500)
Proceeds from bridge notes -- -- 1,000,000
Repayment of bridge notes -- -- (1,000,000)
Proceeds from sale & leaseback of equipment -- -- 1,139,085
Principal payments on capital lease obligations (153,742) (135,669) (772,402)
------------------------------ -------------
Net cash provided from financing activities 793,720 4,399,510 20,230,897
------------------------------ -------------
Net increase in cash and cash equivalents (523,157) 2,362,039 1,184,228
Cash and cash equivalents at beginning of period 1,707,385 1,758,541 --
------------------------------ -------------
Cash and cash equivalents at end of period $ 1,184,228 $ 4,120,580 $ 1,184,228
============================== =============
During the six months ended June 30, 2001, certain creditors of the Company
converted notes payable into equity in the amount of $954,594.
The accompanying notes are an integral part of these financial statements
SIGA Technologies, Inc.
NOTES TO THE JUNE 30, 2001 FINANCIAL STATEMENTS
1. Basis of Presentation
The financial statements of Siga Technologies, Inc. (the "Company") have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the rules of the Securities and Exchange Commission
(the "SEC") for quarterly reports on forms 10-QSB and do not include all of the
information and footnote disclosures required by generally accepted accounting
principles for complete financial statements. These statements should be read in
conjunction with the Company's audited financial statements and notes thereto
for the year ended December 31, 2000, included in the Company's 2000 Form
10-KSB.
In the opinion of management, the accompanying unaudited financial statements
include all adjustments, consisting of normal adjustments, necessary for a fair
presentation of the results of operations for the interim periods. The results
of operations for the three months ended June 30, 2001 are not necessarily
indicative of the results of operations to be expected for the full year ending
December 31, 2001.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. Management believes that current
resources will be sufficient to support its planned operations through the end
of December 31, 2001. The Company does not have commercial biomedical products,
and does not expect to have such for several years, if at all. The Company
believes that it will need additional funds to complete the development of its
biomedical products. These circumstances raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans with regard
to these matters include continued development of its products as well as
seeking additional research support funds and financial arrangements. Although,
management continues to pursue these plans, there is no assurance that the
Company will be successful in obtaining sufficient financing on terms acceptable
to the Company. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
2. Recent Pronouncements
Statement of Financial Accounting Standards No. 141 ("FAS 141"), Business
Combinations, requires that the purchase method of accounting be used for all
business combinations for which the date of acquisition is after June 30, 2001,
establishes specific criteria for the recognition of intangible assets
separately from goodwill, and requires unallocated negative goodwill to be
written off immediately as an extraordinary gain (instead of being deferred and
amortized).
Statement of Financial Accounting Standards No. 142 ("FAS 142"), Goodwill and
Other Intangible Assets, addresses the accounting for goodwill and intangible
assets subsequent to their acquisition. FAS 142 requires that goodwill and
indefinite lived intangible assets will no longer be amortized; goodwill will be
tested for impairment at least annually at the reporting unit level; intangible
assets deemed to have an indefinite life will be tested for impairment at least
annually; and the amortization period of intangible assets with finite lives
will no longer be limited to forty years. The provisions of FAS 142 will be
effective for fiscal years beginning after December 31, 2001 and must be applied
prospectively.
The Company will adopt FAS 141 and 142 on January 1, 2002. Management does not
expect such adoption to have a material impact on the Company's financial
statements.
3. Stockholders' Equity
In May 2001, the Company raised gross proceeds of $850,000 in a private
offering of common stock and warrants to purchase shares of the Company's common
stock. The Company sold 425,000 shares of common stock and 425,000 warrants. The
warrants are exercisable at $2.94 and have a term of seven years. The investors
consisted of members of the board of directors, existing investors and new
investors representing 43.4%, 5.9% and 50.8% of the investors in the
transaction, respectively. The Company recorded a charge to earnings in the
amount of $103,040 based upon the difference between the fair value and the
price of the restricted stock for the shares purchased by the board of
directors.
In January 2000, the Company completed a private placement of 6% convertible
debentures at an aggregate principal amount of $1,500,000 and 1,043,478 warrants
to purchase shares of the Company's common stock with a purchase price of $0.05
per warrant (the "January Financing"). The Company received net proceeds of
$1,499,674 from the total $1,552,174 gross proceeds raised. The debentures are
convertible into common stock at $1.4375 per share. Interest at the rate of 6%
per annum is payable on the principal of each convertible debenture in cash or
shares of the Company's common stock, at the discretion of the Company, upon
conversion or at maturity. The warrants have a term of five years and are
exercisable at $3.4059 per share.
In May and June 2001, certain holders of debentures with an aggregate face value
of $1,250,000, entered into a Conversion Agreement with the Company under which
they converted their debentures into an aggregate of 935,321 shares of the
Company's Series A convertible preferred stock, $0.0001 par value per share.
4. Employment Agreements
In June 2001, the Company entered into an employment agreement with an
individual to serve as the Company's President and Chief Executive Officer (the
"Executive"), expiring in June 2003. The agreement provides for an annual salary
of $300,000. In addition, subject to shareholder approval of the underlying
option plan, the Executive was granted options to purchase 420,000 shares of the
Company's common stock at $3.94 per share.
5. Consulting Agreements
In June 2001, the Company entered into a one year consulting agreement under
which the consultant assists the Company with public relations efforts in Europe
in exchange for 50,000 shares of the Company's common stock which will be
restricted under federal securities laws. The stock vests at an equal rate over
the period of the agreement. As the stock vests, the Company will record charges
to earnings based upon the difference between the fair value and the price of
the restricted stock.
6. Subsequent Events
In June 2001, the Company entered into a consulting agreement, under the terms
of the consulting agreement the consultant will provide services to the Company
for a three year period commencing on September 10, 2001. In consideration for
the consulting services, the consultant will be paid an annual fee of $50,000
payable quarterly in equal amounts. In addition, the Company granted the
consultant options to purchase 225,000 shares of common stock at $3.94 per
share. On September 10, 2001, ten percent of the options shall vest and the
remaining shall vest in 36 monthly installments beginning on October 10, 2001.
As the options vest, the Company will record charges to earnings based upon the
difference between the fair market value and the exercise price of the options.
In May 2001, subject to approval by the shareholders, the Company granted
3,225,000 options, at an exercise price of $2.50 per share, to the members of
the new board of directors. Upon approval by the shareholders the Company may
record charges to earnings based upon the difference between the fair market
value and the exercise price of the options.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion should be read in conjunction with our financial
statements and notes to those statements and other financial information
appearing elsewhere in this Quarterly Report. In addition to historical
information, the following discussion and other parts of this Quarterly Report
contain forward-looking information that involves risks and uncertainties.
Overview
We are a development stage, technology company, whose primary focus is in
biopharmaceutical product development. Since inception in December 1995 our
efforts have been principally devoted to research and development, securing
patent protection, obtaining corporate relationships and raising capital. Since
inception through June 30, 2001, we have sustained cumulative net losses of
$23,329,419, including non-cash charges in the amount of $1,457,458 for the
write-off of research and development expenses associated with the acquisition
of certain technology rights acquired from a third party in exchange for our
common stock. Our losses have resulted primarily from expenditures incurred in
connection with research and development, patent preparation and prosecution and
general and administrative expenses. From inception through June 30, 2001,
research and development expenses amounted to $11,135,435, patent preparation
and prosecution expenses totaled $1,318,429, general and administration expenses
amounted to $13,415,479. From inception through June 30, 2001 revenues from
research and development agreements and government grants totaled $3,114,681.
As of June 30, 2001, Siga has limited resources, has incurred cumulative
net operating losses of $23,329,419 and expects to incur additional losses to
perform further research and development activities. We do not have biomedical
products which are commercially available, and we do not expect to have such for
several years, if at all. We believe that we will need additional funds to
complete the development of our biomedical products. These circumstances raise
substantial doubt about our ability to continue as a going concern. Our plans
with regard to these matters include continued development of our products as
well as seeking additional research support funds and financial arrangements.
Although we continue to pursue these plans, there is no assurance that we will
be successful in obtaining sufficient financing on terms acceptable to us. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Our biotechnology operations are at our research facility in Corvallis,
Oregon. We continue to seek to fund a major portion of our ongoing vaccine and
antibiotic programs through a combination of government grants, corporate
partnerships and strategic alliances. While we have had success in obtaining
partners and grants, no assurance can be given that we will continue to be
successful in obtaining funds from these sources. Until additional relationships
are established, we expect to continue to incur significant research and
development costs and costs associated with the manufacturing of product for use
in clinical trials and pre-clinical testing. It is expected that general and
administrative costs, including patent and regulatory costs, necessary to
support clinical trials and research and development will continue to be
significant in the future. If we are unable to raise needed capital, our
operations will need to be scaled back or discontinued.
To date, we have not marketed, or generated revenues from the commercial
sale of any products. Our biopharmaceutical product candidates are not expected
to be commercially available for several years, if at all. Accordingly, we
expect to incur operating losses for the foreseeable future. There can be no
assurance that we will ever achieve profitable operations.
Results of Operations
Three Months ended June 30, 2001 and June 30, 2000
Revenues from grants and research and development contracts were $682,500
for the three months ended June 30, 2001 compared to $90,373 for the same period
of 2000. The approximate 655% increase in revenue for the period ended June 30,
2001 is primarily the result of our signing an amendment to extend our agreement
with Wyeth-Ayerst through September 30, 2001. The amendment to the agreement
permitted us to record $562,500 of revenue for research payments made by
Wyeth-Ayerst since the completion of the term of the original agreement. These
payments had been recorded as deferred revenue. In the three months ended June
30, 2001, we also received an additional $112,500 research payment from
Wyeth-Ayerst. Revenue for the three month period ended June 30, 2000 of $90,373
was primarily due to payments under a Phase I Small Business Innovation Research
grant (SBIR) from the National Institutes for Health.
General and administrative expenses decreased approximately 34% for the
three months ended June 30, 2001 to $635,246 from $966,115 for the three months
ended June 30, 2000. The decrease in expenses is primarily the result of a
charge taken in the three months ended June 30, 2000 to reserve $261,000
advanced to a third party. No such charge was incurred in the current year
period. In addition, payroll expenses have declined as a result of a reduction
in administrative headcount in the three months ended June 30, 2001 compared to
the same period during the prior year. Further, for the three months ended June
30, 2000 we incurred non-cash charges of $85,050 for warrants granted to certain
directors under consulting agreements. No such charges were incurred during the
three months ended June 30, 2001. These reductions in expenses in the period
ended June 30, 2001 were partially offset by increases in certain costs, such as
legal fees, associated with the reconstitution of our Board of Directors.
Research and development expenses increased to $428,937 for the three
months ended June 30, 2001 from $391,703 for the three months ended June 30,
2000, a 9.5% increase. In the three months ended June 30, 200l all expenses were
for our core biotechnology activities. In the three months ended June 30, 2000,
a portion of the expenses were incurred in the development of our Internet
asset.
Patent preparation expense of $63,317 for the three months ended June 30,
2001 was approximately 68% higher than the $37,780 incurred for the three months
ending June 30, 2000. The increase in spending from the prior year period is the
result of our agreement to pay certain patent costs to UCLA under our existing
license agreement with them.
Net interest expense for the three months ended June 30, 2001 was $74,660
compared to expenses of $141,494 for the three months ended June 30, 2000. The
47.2% decrease in interest expense is the result of the conversion of $1,250,00
principal amount of the 6% convertible debenture during the three months ended
June 30, 2001.
Net loss for the three months ended June 30, 2001 was $519,659, an
approximate 64% decrease from the $1,446,719 loss incurred for the three months
ended June 30, 2000. The decrease in the loss was primarily due to the material
increase in revenue as a result of the Wyeth-Ayeth extension, reduced general
and administrative expenses and lower interest expense.
Six Months ended June 30, 2001 and June 30, 2000
Revenues from grants and research and development contracts increased to
$987,000 for the six months ended June 30, 2001 compared to $171,173 for the six
months ended June 30, 2000. The approximate 477% increase is the result of
additional revenue from Wyeth-Ayerst. Upon consummation of an amendment to
extend our agreement with Wyeth-Ayerst through September 30, 2001, we were able
to recognize revenue of $562,500 from payments made to fund research that had
been recorded as deferred revenue prior to signing the extension. In the six
months ended June 30, 2001, we also received an additional $112,500 research
payment from Wyeth-Ayerst as well as $237,500 payment for achieving a milestone
under the agreement. In the six months ended June 30, 2000, we recognized
revenue of $151,173 from a Phase I Small Business Innovation Research (SBIR)
grant from the National Institutes for Health and $20,000 from an option and
research development agreement with the Ross Products Division of Abbott
Laboratories.
General and administrative expenses for the six months ended June 30, 2001
were $700,600, a decrease of approximately 61% from the $1,777,347 of expenses
incurred in six months ended June 30, 2000. Approximately one half of the
decrease in general and administration expenses were the result of a charge
taken to reserve $261,000 advanced to a third party and non-cash charges of
$229,502 for warrant expense associated with consulting agreements with two
directors. No such charges were incurred in the six months ended June 30, 2001.
The remainder of the reduction in expenses from the six months ended June 30,
2000 is the result of a material reduction in payroll costs reflecting a
reduction is general and administration headcount.
Research and development expenses decreased by approximately 26% to
$859,547 for the six months ended June 30, 2001 from $1,154,630 for the same
period in 2000. The primary reason for the decrease is that the six months ended
June 30, 2000 we incurred costs associated with our Internet asset as well as
expenses for our core biotechnology activities. In the six months ended June 30,
2001 research and development spending was directed only on our core
biotechnology activities.
Patent preparation expense of $80,938 for the six months ended June 30,
2001 was approximately 26% higher than the $64,117 incurred for the six months
ending June 30, 2000. The increase in spending from the prior year period is the
result of our agreement to pay certain patent costs to UCLA under our existing
license agreement with them.
Net interest expense for the six months ended June 30, 2001 was $233,765
compared to expenses of $259,730 for the six months ended June 30, 2000. The 10%
decrease in interest expense is the result of the conversion of $1,250,00
principal amount of the 6% convertible debenture during May and June of the
current year.
Net loss for the six months ended June 30, 2001 was $887,850, an
approximate 71% decrease from the $3,084,651 loss incurred for the six months
ended June 30, 2000. The decrease in the loss was primarily due to the $815,827
increase in revenue as a result of the Wyeth-Ayeth extension and receipt of a
research milestone payment, the $1,076,747 reduction in general and
administrative expenses described above, lower research and development expenses
and reduced interest expense.
Liquidity and Capital Resources
As of June 30, 2001 we had $1,184,228 in cash and cash equivalents. In
July of 1997 we entered into a collaborative two year research and license
agreement with Wyeth-Ayerst Laboratories Division of American Home Products.
Under the terms of the agreement, we have granted Wyeth-Ayerst an exclusive
worldwide license to develop, make, use and sell products derived from specified
technologies. The agreement required Wyeth-Ayerst to sponsor further research by
us for the development of the licensed technologies for a period of two years
from the effective date of the agreement. On May 11, 2001, we entered into an
amendment to the July 1, 1997 agreement. The amendment extends the term of the
Agreement to September 30, 2001. The extension provides for Wyeth Ayerst to
continue to pay the Company at a rate of $450,000 per year through the term of
the amended agreement. During the term of the agreement as amended, September
30, 1999 through June 30, 2001, we have received $675,000 from Wyeth Ayerst to
support work performed by Siga under the agreement and $237,000 for achieving a
research milestone. Since the inception of the agreement through June 30, 2001
we have recorded a total of $2,712,500 of revenue from Wyeth-Ayerst.
In May and June 2001 holders of the Company's 6% convertible debentures,
consisting of an aggregate principal amount $1,250,000 and $94,812 of accrued
interest, agreed to convert the debt and interest into convertible preferred
stock. The converting debenture holders received Series A Preferred Shares at a
conversion price of $1.4375 per share. The preferred shares will have a
cumulative dividend of 6% per annum payable in cash or preferred stock at the
Company's discretion. The shares are convertible into common stock on a one for
one basis. Each holder of preferred stock is entitled to the number of votes
into which the shares of preferred stock are convertible into common stock. In
July 2001 certain holders of the Series A Preferred Shares converted their
preferred shares and cumulative dividends into 626,578 shares of common stock.
On May 8, 2001, we completed a private placement of an aggregate of
425,000 shares of common stock and 425,000 warrants. We received gross proceeds
of $850,000. The warrants have a term of seven years and are exercisable at
$2.94 per share.
We anticipate that our current resources will be sufficient to finance our
currently anticipated needs for operating and capital expenditures approximately
through year end of 2001. In addition, we will attempt to generate additional
working capital through a combination of collaborative agreements, strategic
alliances, research grants, equity and debt financing. However, no assurance can
be provided that additional capital will be obtained through these sources or,
if obtained, on commercially reasonable terms. If we are unable to raise
additional capital when needed, we may be forced to curtail certain activities
and programs or possibly cease operations altogether.
Our working capital and capital requirements will depend upon numerous
factors, including pharmaceutical research and development programs;
pre-clinical and clinical testing; timing and cost of obtaining regulatory
approvals; levels of resources that we devote to the development of
manufacturing and marketing capabilities; technological advances; status of
competitors; and our ability to establish collaborative arrangements with other
organizations.
Part II
Other information
Item 1. Legal Proceedings - None
Item 2. Changes in Securities and Use of Proceeds
In May 2001, holders of the Company's 6% convertible debentures,
consisting of an aggregate principal amount $1,250,000 and approximately $94,812
of accrued interest agreed to convert the debt and accrued interest into
convertible preferred stock. The converting debenture holders received preferred
shares at a conversion price of $1.4375 per share. The preferred shares have a
cumulative dividend of 6% per annum payable in cash or preferred stock at the
Company's discretion. The shares are convertible into common stock on a one for
one basis. Each holder of preferred stock is entitled to the number of votes
into which the shares of preferred stock are convertible into common stock. This
transaction was exempt from registration pursuant to Section 4 (2) of the
Securities Act of 1933, as amended. In July 2001, certain holders of the
preferred shares converted their preferred shares and cumulative dividends into
626,578 shares of common stock.
On May 8, 2001, we completed a private placement of an aggregate of
425,000 shares of common stock and 425,000 warrants. We received gross proceeds
of $850,000. The warrants have a term of seven years and are exercisable at
$2.94 per share. This transaction was exempt from registration pursuant to
Section 4 (2) of the Securities Act of 1933, as amended. This transaction was
completed without general solicitation or advertising and was offered only to
accredited investors.
Item 3. Defaults upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K - None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has fully caused the report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SIGA Technologies, Inc.
(Registrant)
Date: August 14, 2001 By: /s/ Thomas N. Konatich
----------------------
Thomas N. Konatich
Chief Financial Officer
(Principal Accounting Officer and
Financial Officer and Vice
President, Finance)