As filed with the Securities and Exchange Commission on December 18, 2001
Registration No. 333-74390
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SIGA Technologies, Inc.
(Exact Name of Registrant as Specified in Its Charter)
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Delaware 13-3864870
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
420 Lexington Avenue
Suite 620
New York, New York 10170
(212) 672-9100
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive office)
------------------------------------------------------
Thomas N. Konatich
Acting Chief Executive Officer
SIGA Technologies, Inc.
420 Lexington Avenue
Suite 620
New York, New York 10170
(Name and Address of Agent For Service)
(212) 672-9100
(Telephone Number, Including Area Code, of Agent For Service)
Copies to:
Jeffrey J. Fessler, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
590 Madison Avenue
New York, New York 10022
(212) 872-8042 (Phone) (212) 872-8192 (Fax)
Approximate date of commencement of proposed sale to the public: From time
to time as determined by the Selling Stockholders.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
============================================================================================================================
Amount Proposed Proposed Amount of
Title of Securities To Be Registered To Be Maximum Offering Maximum Aggregate Registration
Registered(1) Price Per Share (2) Offering Price (2) Fee
- ----------------------------------------------------------------------------------------------------------------------------
Common Stock, $0.0001 par value 1,375,000 shares $2.24 $3,080,000 $736 (3)
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(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended,
this registration statement also covers such indeterminate number of
shares of common stock as may be required to prevent dilution
resulting from stock splits, stock dividends or similar events.
(2) Estimated solely for the purpose of computing the amount of the
registration fee, based on the average of the high and low prices
for SIGA Technologies, Inc.'s common stock as reported on the Nasdaq
SmallCap Market on December 12, 2001 in accordance with Rule 457(c)
under the Securities Act of 1933, as amended.
(3) $655 of such registration fee has been previously paid.
The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
================================================================================
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PRELIMINARY
PROSPECTUS IS NOT AN OFFER TO SELL NOR DOES IT SEEK AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to completion, dated December 18, 2001
1,375,000 Shares
SIGA Technologies, Inc.
Common Stock
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Shares of common stock of SIGA Technologies, Inc. are being offered by
this prospectus. The shares will be sold from time to time by the selling
stockholders named in this prospectus. The prices at which such selling
stockholders may sell the shares will be determined by the prevailing market
price for the shares or in negotiated transactions. We will not receive any
proceeds from the sale of shares of common stock by the selling stockholders but
we will receive proceeds from the exercise of warrants held by the selling
stockholders. Our shares are traded on the Nasdaq SmallCap Market under the
symbol "SIGA." The last reported sale price for the shares on the Nasdaq
SmallCap Market on December 17, 2001 was $2.60 per share.
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Investing in the shares involves a high degree of risk. For more
information, please see "Risk Factors" beginning on page 4.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined whether
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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The date of this prospectus is _______ __, 2001
TABLE OF CONTENTS
Page
----
About This Prospectus..........................................................1
Where You Can Find More Information............................................1
Forward-Looking Statements.....................................................2
About Siga Technologies, Inc...................................................3
Risk Factors...................................................................4
Use Of Proceeds...............................................................10
Selling Stockholders..........................................................11
Plan Of Distribution..........................................................12
Legal Matters.................................................................14
Experts.......................................................................14
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission (the "SEC"). The prospectus relates to
1,375,000 shares of our common stock which the selling stockholders named in
this prospectus may sell from time to time. We will not receive any of the
proceeds from these sales but we will receive proceeds from the exercise of
warrants held by the selling stockholders. We have agreed to pay the expenses
incurred in registering the shares, including legal and accounting fees.
The shares have not been registered under the securities laws of any state
or other jurisdiction as of the date of this prospectus. Brokers or dealers
should confirm the existence of an exemption from registration or effectuate
such registration in connection with any offer and sale of the shares.
This prospectus describes certain risk factors that you should consider
before purchasing the shares. See "Risk Factors" beginning on page 4. You should
read this prospectus together with the additional information described under
the heading "Where You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
Federal securities law requires us to file information with the SEC
concerning our business and operations. We file annual, quarterly and special
reports, proxy statements and other information with the SEC. You can read and
copy these documents at the public reference facility maintained by the SEC at
Judiciary Plaza, 450 Fifth Street, NW, Room 1024, Washington, DC 20549. You can
also copy and inspect such reports, proxy statements and other information at
the regional offices of the SEC located at 233 Broadway, New York, New York
10279 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. Our SEC filings are also available to the public on the
SEC's web site at http://www.sec.gov. You can also inspect our reports, proxy
statements and other information at the offices of the Nasdaq Stock Market.
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information that we incorporate by
reference is considered to be part of this prospectus, and later information
that we file with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"):
1. Our Annual Report on Form 10-KSB for the year ended December 31, 2000.
2. The description of our common stock contained in our registration
statement on Form 8-A under Section 12 of the Exchange Act, dated September 5,
1997, including any amendment or reports filed for the purpose of updating such
description.
3. Our Quarterly Report on Form 10-QSB for the three months ended March
31, 2001 filed on May 15, 2001.
4. Our Amended Report on Form 10-QSB/A for the three months ended March
31, 2001 filed on June 25, 2001.
5. Our Quarterly Report on Form 10-QSB for the three months ended June 30,
2001 filed on August 14, 2001.
6. Our Current Report on Form 8-K filed on September 26, 2001.
7. Our Quarterly Report on Form 10-QSB for the three months ended
September 30, 2001 filed on November 14, 2001.
This prospectus is part of a registration statement we filed with the SEC
(Registration No. 333-74390). You may request a free copy of any of the above
filings by writing or calling Thomas N. Konatich, Acting Chief Executive Officer
and Chief Financial Officer, SIGA Technologies, Inc., 420 Lexington Avenue,
Suite 620, New York, New York 10170, (212) 672-9100.
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement to this prospectus. We have not
authorized anyone else to provide you with different information. The selling
stockholders should not make an offer of these shares in any state where the
offer is not permitted. You should not assume that the information in this
prospectus or any supplement to this prospectus is accurate as of any date other
than the date on the cover page of this prospectus or any supplement.
FORWARD-LOOKING STATEMENTS
This prospectus and the other reports we have filed with the SEC, contain
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act"), and Section 21E of the Exchange
Act. The words or phrases "can be", "expects", "may affect", "may depend",
"believes", "estimate", "project", and similar words and phrases are intended to
identify such forward-looking statements. Such forward-looking statements are
subject to various known and unknown risks and uncertainties and we caution you
that any forward-looking information provided by or on behalf of Siga is not a
guarantee of future performance. Our actual results could differ materially from
those anticipated by such forward-looking statements due to a number of factors,
some of which are beyond our control, in addition to those risks discussed in
"Risk Factors" in this prospectus and in our other public filings, press
releases and statements by our management, including (i) the volatile and
competitive nature of the biotechnology industry, (ii) changes in domestic and
foreign economic and market conditions, and (iii) the effect of federal, state
and foreign regulation on our businesses. All forward-looking statements are
current only as of the date on which such statements were made. We do not
undertake any obligation to publicly update any forward-looking statement to
reflect events or circumstances after the date on which any such statement is
made or to reflect the occurrence of unanticipated events.
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ABOUT SIGA TECHNOLOGIES, INC.
We are a development stage technology company, whose primary focus is on
biopharmaceutical product development. Our focus is on the discovery,
development and commercialization of vaccines, antibiotics and novel
anti-infectives for serious infectious diseases. Our lead vaccine candidate is
for the prevention of group A streptococcal pharyngitis or "strep throat." We
are developing a technology for the mucosal delivery of our vaccines which may
allow those vaccines to activate the immune system at the mucus lined surfaces
of the body - the mouth, the nose, the lungs and the gastrointestinal and
urogenital tracts - the sites of entry for most infectious agents. Our
anti-infectives programs, aimed at the increasingly serious problem of drug
resistance, are designed to block the ability of bacteria to attach to human
tissue, the first step in the infection process.
Vaccine Technologies: Mucosal Immunity and Vaccine Delivery
Using proprietary technology licensed from The Rockefeller University
("Rockefeller"), we are developing certain commensal bacteria ("commensals") as
a means to deliver mucosal vaccines. Commensals are harmless bacteria that
naturally inhabit the body's surfaces with different commensals inhabiting
different surfaces, particularly the mucosal surfaces. Our vaccine candidates
utilize genetically engineered commensals to deliver antigens from a variety of
pathogens to the mucosal immune system.
Strep Throat Vaccine Candidate
We have licensed from Rockefeller a proprietary antigen which is common to
most types of group A streptococcus, including types that have been associated
with rheumatic fever. When this antigen was orally administered to animals, it
was shown to provide protection against multiple types of group A streptococcal
infection. Utilizing this antigen, we are developing a mucosal vaccine for strep
throat. Pre-clinical research in mice and rabbits has established the ability of
this vaccine candidate to colonize and induce both a local and systemic immune
response. We are collaborating with the National Institute of Health, or NIH,
and the University of Maryland Center for Vaccine Development on the clinical
development of this vaccine candidate. In cooperation with the NIH we filed an
Investigational New Drug Application with the United States Food and Drug
Administration, or FDA, in December 1997. In September 1999 we were awarded a
Phase I Small Business Innovation Research Grant from the NIH to help support
the research cost of our strep program.
The first stage of these clinical trials, utilizing the commensal delivery
system without the strep throat antigen, were completed at the University of
Maryland in 2000. The study showed the commensal delivery system to be
well-tolerated and that it spontaneously eradicated or was easily eradicated by
conventional antibiotics. A second clinical trial of the commensal delivery
system without the strep throat antigen was initiated in 2000 at the University
of Maryland.
Sexually Transmitted Disease Candidates
We have expressed newly discovered antigens from the pathogens, chlamydia
and Neisseria (the causative agent in gonorrhea), in our proprietary mucosal
vaccine delivery system.
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We have licensed technology from Oregon State University and Washington
University in support of our chlamydia and Neisseria programs.
Anti-Infectives
Our anti-infectives program is targeted principally toward drug-resistant
bacteria and hospital-acquired infections.
Gram-Positive Antibiotic Technology
Our lead anti-infectives program is based on a novel target for antibiotic
therapy. Our scientists have identified an enzyme, a selective protease,
utilized by most gram-positive bacteria to anchor certain proteins to the
bacterial cell wall. These surface proteins are the means by which certain
bacteria recognize, adhere to and colonize specific tissue. Our strategy is to
develop protease inhibitors. We are a party to a collaborative research and
license agreement with the Wyeth-Ayerst Laboratories Division of American Home
Products Corporation to identify and develop protease inhibitors as antibiotics.
Gram-Negative Antibiotic Technology
We have entered into a set of technology transfer and related agreements
with Med Immune Inc., Astra AB and The Washington University, pursuant to which
we acquired rights to certain gram-negative antibiotic targets, products,
screens and services developed at Washington University. In February 2000, we
ended our collaborative relationship with Washington University on this
technology, but still maintain a non-exclusive license to technology acquired
through these related agreements. Gram-negative pathogens utilize structures
called pili to adhere to target tissue. Inhibition of the assembly of pili
should effectively inhibit disease caused by this class of organisms. In July
1999 and August 2000 we were awarded Phase I Small Business Innovation Research
grants from the NIH to support our development efforts in this area.
Our principal executive offices are located at 420 Lexington Avenue, Suite
620, New York, New York 10170. Our telephone number is (212) 672-9100. The
information included on our web site is not intended to be a part of this
prospectus.
RISK FACTORS
In this section, we highlight the significant risks associated with our
business and operations. Investing in our common stock involves a high degree of
risk. You should be able to bear a complete loss of your investment. To
understand the level of risk, you should carefully consider the following risk
factors, as well as the other information found in this prospectus, when
evaluating an investment in the shares.
We have incurred operating losses since our inception and expect to incur
net losses and negative cash flow for the foreseeable future. We incurred net
losses of $6.6 million for the year ended December 31, 1998, $3.6 million for
the year ended December 31, 1999, $7.8 million for the year ended December 31,
2000 and $2.5 million for the nine months ended September 30, 2001. As of
September 30, 2001, December 31, 2000 and December 31, 1999, our accumulated
deficit
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was $24.9 million and $14.7 million, respectively. We expect to continue to
incur significant operating and capital expenditures and, as a result, we will
need to generate significant revenues to achieve and maintain profitability. We
cannot guarantee that we will achieve sufficient revenues for profitability.
Even if we do achieve profitability, we cannot guarantee that we can sustain or
increase profitability on a quarterly or annual basis in the future. If revenues
grow slower than we anticipate, or if operating expenses exceed our expectations
or cannot be adjusted accordingly, our business, results of operations and
financial condition will be materially and adversely affected. Because our
strategy includes acquisitions of other businesses, acquisition expenses and any
cash used to make these acquisitions will reduce our available cash.
Uncertainty of availability of additional funding and going concern. We
will require substantial additional funds to conduct and sponsor research and
development activities related to our biopharmaceutical businesses, to conduct
pre-clinical and clinical testing, and to market our 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 funding through collaborative
arrangements and through public or private financings. There can be no assurance
that additional financing will be available, or, if available, that such
additional financing will be available on terms acceptable to us.
We are in various stages of product development and there can be no
assurance of successful commercialization. Our research and development programs
are at an early stage of development. The FDA has not approved any of our
biopharmaceutical product candidates. Any drug candidates developed by us will
require significant additional research and development efforts, including
extensive pre-clinical and clinical testing and regulatory approval, prior to
commercial sale. We cannot be sure our approach to drug discovery will be
effective or will result in the development of any drug. We cannot expect that
any drugs that do result from our research and development efforts will be
commercially available for many years.
We have limited experience in conducting pre-clinical testing and clinical
trials. Even if we receive initially positive pre-clinical results, such results
do not mean that similar results will be obtained in the later stages of drug
development, such as additional pre-clinical testing or human clinical trials.
All of our potential drug candidates are prone to the risks of failure inherent
in pharmaceutical product development, including the possibility that none of
our drug candidates will or can:
o be safe, non-toxic and effective;
o otherwise meet applicable regulatory standards;
o receive the necessary regulatory approvals;
o develop into commercially viable drugs;
o be manufactured or produced economically and on a large scale;
o be successfully marketed;
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o be reimbursed by government or private consumers; or
o achieve customer acceptance.
In addition, third parties may preclude us from marketing our drugs
through enforcement of their proprietary rights. Also, third parties may succeed
in marketing equivalent or superior drug products. Our failure to develop safe,
commercially viable drugs would have a material adverse effect on our business,
financial condition and results of operations.
Most of our expected future revenues are contingent upon collaborative and
license agreements and we may not achieve sufficient revenues from these
agreements to attain profitability. Our ability to generate revenues depends on
our ability to enter into additional collaborative and license agreements with
third parties and maintain the agreements we currently have in place. We will
receive little or no revenues under our agreements if our collaborators'
research, development or marketing efforts are unsuccessful, or if our
agreements are terminated early. Additionally, if we do not enter into new
collaborative agreements, we will not receive future revenues from new sources.
Our future receipt of revenues from collaborative arrangements will be
significantly affected by the amount of time and effort expended by our
collaborators, the timing of the identification of useful drug targets and the
timing of the discovery and development of drug candidates. Under our existing
agreements, we may not earn significant milestone payments until our
collaborators have advanced products into clinical testing, which may not occur
for many years, if at all.
We may not find sufficient acquisition candidates to implement our
business strategy. As part of our business strategy we expect to enter into
additional business combinations and acquisitions. We compete for acquisition
candidates with other entities, some of which have greater financial resources
than we have. Increased competition for acquisition candidates may make fewer
acquisition candidates available to us and may cause acquisitions to be made on
less attractive terms, such as higher purchase prices. Acquisition costs may
increase to levels that are beyond our financial capability or that would
adversely affect our results of operations and financial condition. Our ability
to make acquisitions will depend in part on the relative attractiveness of
shares of our common stock as consideration for potential acquisition
candidates. This attractiveness may depend largely on the relative market price,
our ability to register common stock and capital appreciation prospects of our
common stock. If the market price of our common stock were to decline materially
over a prolonged period of time, our acquisition program could be materially
adversely affected.
The biopharmaceutical market in which we compete and will compete is
highly competitive. The biopharmaceutical industry is characterized by rapid and
significant technological change. Our success will depend on our ability to
develop and apply our technologies in the design and development of our product
candidates and to establish and maintain a market for our product candidates.
There also are many companies, both public and private, including major
pharmaceutical and chemical companies, specialized biotechnology firms,
universities and other research institutions engaged in developing
pharmaceutical and biotechnology products. Many of these companies have
substantially greater financial, technical,
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research and development, and human resources than us. Competitors may develop
products or other technologies that are more effective than any that are being
developed by us or may obtain FDA approval for products more rapidly than us. If
we commence commercial sales of products, we still must compete in the
manufacturing and marketing of such products, areas in which we have no
experience. Many of these companies also have manufacturing facilities and
established marketing capabilities that would enable such companies to market
competing products through existing channels of distribution.
Because we must obtain regulatory clearance to test and market our
products in the United States and foreign jurisdictions, we cannot predict
whether or when we will be permitted to commercialize our products. The
pharmaceutical industry is subject to stringent regulation by a wide range of
authorities in the geographic areas where we intend to develop and commercialize
products. A pharmaceutical product cannot be marketed in the United States until
it has completed rigorous preclinical testing and clinical trials and an
extensive regulatory clearance process implemented by the FDA. Satisfaction of
regulatory requirements typically takes many years, is dependent upon the type,
complexity and novelty of the product and requires the expenditure of
substantial resources,
Before commencing clinical trials in humans, we must submit and receive
clearance from the FDA by means of an IND application. Clinical trials are
subject to oversight by institutional review boards and the FDA and:
o must be conducted in conformance with the FDA's good laboratory
practice regulations;
o must meet requirements for institutional review board oversight;
o must meet requirements for informed consent;
o must meet requirements for good clinical and manufacturing
practices;
o are subject to continuing FDA oversight;
o may require large numbers of test subjects; and
o may be suspended by us or the FDA at any time if it is believed that
the subjects participating in these trials are being exposed to
unacceptable health risks or if the FDA finds deficiencies in the
IND application or the conduct of these trials.
Before receiving FDA clearance to market a product, we must demonstrate
that the product is safe and effective on the patient population that will be
treated. Data obtained from preclinical and clinical activities are susceptible
to varying interpretations that could delay, limit or prevent regulatory
clearances. Additionally, we have limited experience in conducting and managing
the clinical trials and manufacturing processes necessary to obtain regulatory
clearance.
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If regulatory clearance of a product is granted, this clearance will be
limited to those disease states and conditions for which the product is
demonstrated through clinical trials to be safe and efficacious. We cannot
ensure that any compound developed by us, alone or with others, will prove to be
safe and efficacious in clinical trials and will meet all of the applicable
regulatory requirements needed to receive marketing clearance.
Outside the United States, our ability to market a product is contingent
upon receiving a marketing authorization from the appropriate regulatory
authorities. This foreign regulatory approval process includes all of the risks
associated with FDA clearance described above.
If our technologies or those of our collaborators are alleged or found to
infringe the patents or proprietary rights of others, we may be sued or have to
license those rights from others on unfavorable terms. Our commercial success
will depend significantly on our ability to operate without infringing the
patents and proprietary rights of third parties. Our technologies along with our
licensors' and our collaborators' technologies may infringe the patents or
proprietary rights of others. An adverse outcome in litigation or an
interference to determine priority or other proceeding in a court or patent
office could subject us to significant liabilities, require disputed rights to
be licensed from or to other parties or require us, our licensors or our
collaborators to cease using a technology necessary to carry out research,
development and commercialization.
Litigation to establish the validity of patents, to defend against patent
infringement claims of others and to assert infringement claims against others
can be expensive and time consuming, even if the outcome is favorable. An
outcome of any patent prosecution or litigation that is unfavorable to us or one
of our licensors or collaborators may have a material adverse effect on us. We
could incur substantial costs if we are required to defend ourselves in patent
suits brought by third parties, if we participate in patent suits brought
against or initiated by our licensors or collaborators or if we initiate such
suits. We may not have sufficient funds or resources in the event of litigation.
Additionally, we may not prevail in any such action.
Any conflicts resulting from third-party patent applications and patents
could significantly reduce the coverage of the patents owned, optioned by or
licensed to us or our collaborators and limit our ability or that of our
collaborators to obtain meaningful patent protection. If patents are issued to
third parties that contain competitive or conflicting claims, we, our licensors
or our collaborators may be legally prohibited from pursuing research,
development or commercialization of potential products or be required to obtain
licenses to these patents or to develop or obtain alternative technology. We,
our licensors and/or our collaborators may be legally prohibited from using
patented technology, may not be able to obtain any license to the patents and
technologies of third parties on acceptable terms, if at all, or may not be able
to obtain or develop alternative technologies.
In addition, like many biopharmaceutical companies, we may from time to
time hire scientific personnel formerly employed by other companies involved in
one or more areas similar to the activities conducted by us. We or these
individuals may be subject to allegations of trade secret misappropriation or
other similar claims as a result of their prior affiliations.
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Our ability to compete may decrease if we do not adequately protect our
intellectual property rights. Our commercial success will depend in part on our
and our collaborators' ability to obtain and maintain patent protection for our
proprietary technologies, drug targets and potential products and to effectively
preserve our trade secrets. Because of the substantial length of time and
expense associated with bringing potential products through the development and
regulatory clearance processes to reach the marketplace, the pharmaceutical
industry places considerable importance on obtaining patent and trade secret
protection. The patent positions of pharmaceutical and biotechnology companies
can be highly uncertain and involve complex legal and factual questions. No
consistent policy regarding the breadth of claims allowed in biotechnology
patents has emerged to date. Accordingly, we cannot predict the type and breadth
of claims allowed in these patents.
We also rely on copyright protection, trade secrets, know-how, continuing
technological innovation and licensing opportunities. In an effort to maintain
the confidentiality and ownership of trade secrets and proprietary information,
we require our employees, consultants and some collaborators to execute
confidentiality and invention assignment agreements upon commencement of a
relationship with us. These agreements may not provide meaningful protection for
our trade secrets, confidential information or inventions in the event of
unauthorized use or disclosure of such information, and adequate remedies may
not exist in the event of such unauthorized use or disclosure.
We may have difficulty managing our growth. We expect to continue to
experience significant growth in the number of our employees and the scope of
our operations. This growth has placed, and may continue to place, a significant
strain on our management and operations. Our ability to manage this growth will
depend upon our ability to broaden our management team and our ability to
attract, hire and retain skilled employees. Our success will also depend on the
ability of our officers and key employees to continue to implement and improve
our operational and other systems and to hire, train and manage our employees.
We depend on key employees in a competitive market for skilled personnel.
We are highly dependent on the principal members of our management, operations
and scientific staff. The loss of any of these persons' services would have a
material adverse effect on our business. We have entered into employment
agreements with several individuals who we consider to be key employees. We do
not maintain a key person life insurance policy on the life of any employee.
Our future success also will depend in part on the continued service of
our key scientific, biotech and management personnel and our ability to
identify, hire and retain additional personnel, including customer service,
marketing and sales staff. We experience intense competition for qualified
personnel. We may not be able to continue to attract and retain personnel
necessary for the development of our business.
Our activities involve hazardous materials and may subject us to
environmental regulatory liabilities. Our biopharmaceutical research and
development involves the controlled use of hazardous and radioactive materials
and biological waste. We are subject to federal, state and local laws and
regulations governing the use, manufacture, storage, handling and disposal of
these materials and certain waste products. Although we believe that our safety
procedures for
9
handling and disposing of these materials comply with legally prescribed
standards, the risk of accidental contamination or injury from these materials
cannot be completely eliminated. In the event of an accident, we could be held
liable for damages, and this liability could exceed our resources.
We believe that we are in compliance in all material respects with
applicable environmental laws and regulations and currently do not expect to
make material additional capital expenditures for environmental control
facilities in the near term. However, we may have to incur significant costs to
comply with current or future environmental laws and regulations.
Sales of shares eligible for future sale could impair our stock price.
Sales of a substantial number of shares of common stock in the public market, or
the perception that sales could occur, could adversely affect the market price
for our common stock. This offering will result in additional shares of our
common stock being available on the public market. These factors could also make
it more difficult to raise funds through future offerings of common stock.
USE OF PROCEEDS
The net proceeds from the sale of the shares of common stock offered will
be received by the selling stockholders. We will not receive any of the proceeds
from the sale of the shares of common stock offered by the selling stockholders
but we will receive proceeds from the exercise of the warrants held by the
selling stockholders.
10
SELLING STOCKHOLDERS
The table below sets forth information regarding ownership of our common
stock by the selling stockholders on November 8, 2001 and the shares of common
stock to be sold by them under this prospectus. Beneficial ownership is
determined in accordance with SEC rules and includes voting or investment power
with respect to the securities. Except as indicated by footnote, and subject to
applicable community property laws, the persons named in the table have sole
voting and investment power with respect to all shares of common stock shown as
beneficially owned by them. SEC rules require that the number of shares of
common stock outstanding used in calculating the percentage for each listed
person includes the shares of common stock underlying warrants or options held
by such person that are exercisable within 60 days of November 8, 2001. As of
November 8, 2001, 10,139,553 shares of common stock were outstanding.
We have filed with the SEC, under the Securities Act of 1933, a
registration statement on Form S-3, of which this prospectus forms a part, with
respect to the resale of the securities from time to time on the Nasdaq SmallCap
Market or in privately-negotiated transactions and have agreed to prepare and
file such amendments and supplements to the registration statement as may be
necessary to keep the registration statement effective until the earlier of (i)
_______, 2004, (ii) the date when the selling stockholders may sell all of the
shares of common stock under Rule 144 without volume or other restrictions or
limits, or (iii) the date on which the selling stockholders have sold all of the
shares of common stock.
Securities Owned Prior to Offering Securities Owned After Offering
---------------------------------------------------- -------------------------------
Shares of Number of
Shares of Percent of Common Stock Shares of Percent of
Name of Selling Stockholder Common Stock Common Stock Offered Hereby Common Stock Common Stock
- --------------------------- ------------ ------------ -------------- ------------ ------------
Cranshire Capital, L.P. 625,000 (1) 6.0 625,000 0 --
Gryphon Master Fund LP 300,000 (2) 2.9 300,000 0 --
Jackson Ventures IV, L.P. 150,000 (3) 1.5 150,000 0 --
Langley Partners, LP 200,000 (4) 2.0 200,000 0 --
Gary J. Shemano 48,000 (5) * 48,000 0 --
William and Mary Corbett 47,000 (6) * 47,000 0 --
Michael R. Jacks 5,000 (7) * 5,000 0 --
- --------------------------------------------------------------------------------
* Less than one percent
(1) Includes 208,333 shares of common stock issuable upon exercise of
warrants.
(2) Includes 100,000 shares of common stock issuable upon exercise of
warrants.
(3) Includes 50,000 shares of common stock issuable upon exercise of
warrants.
(4) Includes 66,667 shares of common stock issuable upon exercise of
warrants.
(5) Consists of 48,000 shares of common stock issuable upon exercise of
warrants.
(6) Consists of 47,000 shares of common stock issuable upon exercise of
warrants.
(7) Consists of 5,000 shares of common stock issuable upon exercise of
warrants.
11
The information provided in the table above with respect to the selling
stockholders has been obtained from such selling stockholders.
Except as otherwise disclosed above or in documents incorporated herein by
reference, the selling stockholders, have not within the past three years had
any position, office or other material relationship with us or any of our
predecessors or affiliates, except that Gary J. Shemano, William Corbett and
Michael R. Jacks are affiliated with The Shemano Group, Inc. which assisted Siga
with a private placement in October 2001. The Shemano Group, Inc. was paid
$178,500 and was granted 100,000 warrants in exchange for their services.
Because the selling stockholders may sell all or some portion of the shares of
common stock beneficially owned by them, only an estimate (assuming the selling
stockholders sell all of the shares offered hereby) can be given as to the
number of shares of common stock that will be beneficially owned by the selling
stockholders after this offering. In addition, the selling stockholders may have
sold, transferred or otherwise disposed of, or may sell, transfer or otherwise
dispose of, at any time or from time to time since the dates on which they
provided the information regarding the shares beneficially owned by them, all or
a portion of the shares beneficially owned by them in transactions exempt from
the registration requirements of the Securities Act.
PLAN OF DISTRIBUTION
This prospectus covers the sale of shares of common stock from time to
time by the selling stockholders named in the table above. The selling
stockholders will act independently of us in making decisions with respect to
the timing, manner and size of each sale. The sales may be made on one or more
exchanges or in the over-the-counter market or otherwise, at prices and at terms
then prevailing or at prices related to the then current market price, or in
negotiated transactions. The selling stockholders may effect such transactions
by selling the shares to or through broker-dealers. The shares may be sold by
one or more of, or a combination of, the following:
o a block trade in which the broker-dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by such
broker-dealer for its account pursuant to this prospectus;
o an exchange distribution in accordance with the rules of such
exchange;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
o in privately negotiated transactions.
To the extent required, this prospectus may be amended or supplemented
from time to time to describe a specific plan of distribution. In effecting
sales, broker-dealers engaged by the selling stockholder may arrange for other
broker-dealers to participate in the resales.
The selling stockholders may enter into hedging transactions with
broker-dealers in connection with distributions of the shares or otherwise. In
such transactions, broker-dealers may engage in short sales of the shares in the
course of hedging the positions they assume with the
12
selling stockholders. The selling stockholders also may sell shares short and
redeliver the shares to close out such short positions. The selling stockholders
may enter into option or other transactions with broker-dealers which require
the delivery to the broker-dealer of the shares. The broker-dealer may then
resell or otherwise transfer such shares pursuant to this prospectus.
The selling stockholders also may loan or pledge the shares to a
broker-dealer. The broker-dealer may sell the shares so loaned, or upon a
default the broker-dealer may sell the pledged shares pursuant to this
prospectus. Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from the selling stockholders.
Broker-dealers or agents may also receive compensation from the purchasers of
the shares for whom they act as agents or to whom they sell as principals, or
both. Compensation as to a particular broker-dealer might be in excess of
customary commissions and will be in amounts to be negotiated in connection with
the sale. Broker-dealers or agents and any other participating broker-dealers or
the selling stockholders may be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities Act in connection with sales of the shares.
Accordingly, any such commission, discount or concession received by them and
any profit on the resale of the shares purchased by them may be deemed to be
underwriting discounts or commissions under the Securities Act. Because the
selling stockholders may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act, the selling stockholders will be subject to
the prospectus delivery requirements of the Securities Act. In addition, any
securities covered by this prospectus which qualify for sale pursuant to Rule
144 promulgated under the Securities Act may be sold under Rule 144 rather than
pursuant to this prospectus. The selling stockholders have advised us that they
have not entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their securities. There is
no underwriter or coordinating broker acting in connection with the proposed
sale of shares by the selling stockholders.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in
certain states the shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the shares may not simultaneously engage in
market making activities with respect to our common stock for a period of two
business days prior to the commencement of such distribution. In addition, the
selling stockholders will be subject to applicable provisions of the Exchange
Act and the associated rules and regulations under the Exchange Act, including
Regulation M, which provisions may limit the timing of purchases and sales of
shares of our common stock by the selling stockholders. We will make copies of
this prospectus available to the selling stockholders and have informed them of
the need for delivery of copies of this prospectus to purchasers at or prior to
the time of any sale of the shares.
We will file a supplement to this prospectus, if required, pursuant to
Rule 424(b) under the Securities Act upon being notified by the selling
stockholders that any material arrangement has been entered into with a
broker-dealer for the sale of shares through a block trade, special offering,
exchange distribution or secondary distribution or a purchase by a broker or
dealer. Such supplement will disclose:
13
o the name of the selling stockholder and of the participating
broker-dealer(s);
o the number of shares involved;
o the price at which such shares were sold;
o the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
o that such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in this
prospectus; and
o other facts material to the transaction.
We will bear all costs, expenses and fees in connection with the
registration of the shares. The selling stockholders will bear all commissions
and discounts, if any, attributable to the sales of the shares. We have agreed
to indemnify certain selling stockholders against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, in connection with the
offering of the shares or to contribute to payments which such selling
stockholders may be required to make in respect thereof. The selling
stockholders may agree to indemnify certain persons, including broker-dealers
and agents, against certain liabilities in connection with the offering of the
shares, including liabilities arising under the Securities Act.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed
upon for Siga by Akin, Gump, Strauss, Hauer & Feld, L.L.P., New York, New York.
EXPERTS
The financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-KSB of Siga Technologies, Inc. as of December 31,
2000 and for each of the two years in the period ended December 31, 2000 have
been so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated costs and expenses of the
sale and distribution of the securities being registered, all of which are being
borne by us.
Amount
------
Securities and Exchange Commission filing fee.............. $ 736
Printing expenses.......................................... 2,000
Legal Fees and Expenses.................................... 10,000
Accounting Fees and Expenses............................... 5,000
Miscellaneous.............................................. 264
---------
Total.................................................. $ 18,000
=========
All of the amounts shown are estimates except for the fee payable to the
Securities and Exchange Commission.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers, as well as other employees and
individuals, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by any such person
in connection with any threatened, pending or completed actions, suits or
proceedings in which such person is made a party by reason of such person being
or having been a director, officer, employee or agent to the Registrant. The
Delaware General Corporation Law provides that Section 145 is not exclusive of
other rights to which those seeking indemnification may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
Article IX of the Registrant's Certificate of Incorporation and Article VII of
the Registrant's Bylaws provides for indemnification by the Registrant of its
directors and officers to the fullest extent permitted by the Delaware General
Corporation Law.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that 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) for
unlawful payments of dividends or unlawful stock repurchases, redemptions or
other distributions, or (iv) for any transaction from which the director derived
an improper personal benefit. The Registrant's Certificate of Incorporation
provides for such limitation of liability.
II-1
ITEM 16. EXHIBITS
The following is a list of exhibits filed as part of this registration
statement.
Exhibit
Number Description and Method of Filing
------ --------------------------------
5 Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
23.1 Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
(included in the opinion filed as Exhibit 5)
23.2 Consent of PricewaterhouseCoopers LLP
24 Power of Attorney (See Page II-4)*
- --------------------------------------------------------------------------------
* Previously filed.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sale; are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement.
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply
if the registration statement is on Form S-3, and the information required
to be, included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
II-2
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
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, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by the final adjudication
of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Siga
Technologies, Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, New York on
December 18, 2001.
Siga Technologies, Inc.
By: /s/ Thomas N. Konatich
-----------------------------------
Thomas N. Konatich
Acting Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to this registration statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title of Capacities Date
/s/ Thomas N. Konatich Acting Chief Executive Officer and December 18, 2001
- ------------------------ Chief Financial Officer
Thomas N. Konatich
* Chairman of the Board December 18, 2001
- ------------------------
Donald G. Drapkin
* Director December 18, 2001
- ------------------------
Eric A. Rose, M.D.
* Director December 18, 2001
- ------------------------
Gabriel M. Cerrone
* Director December 18, 2001
- ------------------------
Thomas E. Constance
* Director December 18, 2001
- ------------------------
Mehmet C. Oz, M.D.
* Director December 18, 2001
- ------------------------
Michael Weiner, M.D.
*By: /s/ Thomas N. Konatich
-----------------------
Thomas N. Konatich
Attorney-in-Fact
II-4
EXHIBIT INDEX
Exhibit
Number Description and Method of Filing
------- ----------------------------------------------------
5 Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
23.1 Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
(included in the opinion filed as Exhibit 5)
23.2 Consent of PricewaterhouseCoopers LLP
24 Power of Attorney (See Page II-4)*
* Previously filed.
Exhibit 5.1
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
ATTORNEYS AT LAW
A REGISTERED LIMITED LIABILITY PARTNERSHIP
INCLUDING PROFESSIONAL CORPORATIONS
AUSTIN
BRUSSELS 590 MADISON AVENUE
DALLAS 20TH FLOOR
HOUSTON NEW YORK, NY 10022
LONDON (212) 872-1000
LOS ANGELES FAX (212) 872-1002
MOSCOW
NEW YORK
PHILADELPHIA December 18, 2001
SAN ANTONIO
WASHINGTON, D.C.
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: SIGA Technologies, Inc. Form S-3
Ladies and Gentlemen:
We have acted as special counsel to SIGA Technologies, Inc., a Delaware
corporation (the "Company"), in connection with the registration statement on
Form S-3 (the "Registration Statement"), filed with the Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended (the "Act"),
covering the offering and sale by the selling stockholders listed in the
Registration Statement (the "Selling Stockholders") of 1,375,000 shares (the
"Selling Stockholder Shares") of the Company's Common Stock, par value $0.0001
per share.
We have examined originals or certified copies of such corporate records
of the Company and other certificates and documents of officials of the Company,
public officials and others as we have deemed appropriate for purposes of this
letter. We have assumed the genuineness of all signatures, the authenticity of
all documents submitted to us as originals, the conformity to authentic original
documents of all copies submitted to us as conformed and certified or reproduced
copies.
Based upon the foregoing and subject to the assumptions, exceptions,
qualifications and limitations set forth hereinafter, we are of the opinion that
when the Registration Statement relating to the Selling Stockholder Shares has
become effective under the Act, the Selling Stockholder Shares, when sold and
delivered as described in the Registration Statement, will be duly authorized
and validly issued and are fully paid and non-assessable.
December 18, 2001
Page 2
The opinions and other matters set forth in this letter are qualified in
their entirety and subject to the following:
A. We express no opinion as to the laws of any jurisdiction other than
any published constitutions, treaties, laws, rules or regulations or
judicial or administrative decisions ("Laws") of the Laws of the
state of Delaware.
B. This law firm is a registered limited liability partnership
organized under the laws of the State of Texas.
C. This opinion is limited to the matters stated herein, and no opinion
is implied or may be inferred beyond the matters expressly stated.
We assume herein no obligation, and hereby disclaim any obligation,
to make any inquiry after the date hereof or to advise you of any
future changes in the foregoing or of any fact or circumstance that
may hereafter come to our attention.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the prospectus forming a
part of the Registration Statement under the caption "Legal Matters." In giving
this consent, we do not thereby admit that we are within the category of persons
whose consent is required under Section 7 of the Act, and the rules and
regulations promulgated thereunder. We also consent to the filing of copies of
this opinion as an exhibit to the Registration Statement.
Very truly yours,
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 15, 2001, except as to Note
14, which is as of March 30, 2001, relating to the financial statements, which
appear in Siga Technologies, Inc's Annual Report on Form 10-KSB for the year
ended December 31, 2000. We also consent to the references to us under the
headings "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
New York, New York
December 18, 2001