As filed with the Securities and Exchange Commission on November 24, 2004
Registration No. _______________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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)
Delaware 13-3864870
(State or Other Jurisdiction of (I.R.S. Employer identification No.)
Incorporation or Organization)
420 Lexington Avenue
Suite 601
New York, New York 10170
(212) 672-9100
(Address, including zip code,
and telephone number, including
area code, of Registrant's
principal executive office)
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Thomas N. Konatich
Acting Chief Financial Officer
SIGA Technologies, Inc.
420 Lexington Avenue
Suite 601
New York, New York 10170
(212) 672-9100
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
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COPY TO:
Thomas E. Constance, Esq.
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
(212) 715-9100
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
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Proposed Maximum
Number of Shares Maximum Offering Aggregate Amount of
Title of Shares to be Registered to be Registered Price Per Share Offering Price Registration Fee
- --------------------------------------------------------------------------------------------------------------
common stock, par value $.0001 per
share.............................. 1,000,000 $ 1.385(1) $1,385,000(1) $175.48
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(1) Estimated solely for the purpose of computing the amount of the
registration fee, in accordance with Rule 457(c) under the Securities Act
of 1933, as amended. The maximum offering price per share is $1.385, which
was the average high and low prices for SIGA's common stock as reported on
the Nasdaq SmallCap Market on Monday, November 22, 2004.
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 Securities and Exchange Commission, acting
pursuant to Section 8(a) of the Securities Act of 1933, may determine.
Preliminary Prospectus, Subject to Completion, dated November 24, 2004
1,000,000 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.
Our shares are traded on the Nasdaq SmallCap Market under the symbol "SIGA." Our
principal executive offices are located at 420 Lexington Avenue, Suite 601, New
York, New York 10170. Our telephone number is (212) 672-9100.
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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.
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.
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The date of this prospectus is ______, 2004
TABLE OF CONTENTS
ABOUT SIGA TECHNOLOGIES, INC...................................................1
RISK FACTORS...................................................................4
ABOUT THIS PROSPECTUS.........................................................13
FORWARD-LOOKING STATEMENTS....................................................13
USE OF PROCEEDS...............................................................14
SELLING STOCKHOLDERS..........................................................15
PLAN OF DISTRIBUTION..........................................................15
LEGAL MATTERS.................................................................17
EXPERTS.......................................................................17
COMMISSION'S POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES.......17
ADDITIONAL INFORMATION........................................................18
INCORPORATION BY REFERENCE....................................................18
ABOUT SIGA TECHNOLOGIES, INC.
We are a technology company, whose primary focus is on biopharmaceutical
product development. Our focus is on (1) novel antibiotics and antivirals for
biological warfare defense and gram-positive and gram-negative bacterial
infections; (2) mucosal vaccines for biodefense targets, strep throat and
sexually transmitted diseases, and (3) commensal bacteria for the delivery of
vaccines. As of the date of this prospectus, none of our products have been
approved for commercial sale and, therefore, we have not generated any revenues
from the commercial sale of our products. To date, we have relied on a
combination of private financings, grants and collaboration agreements to fund
our operations.
Biological Warfare Defense
We are developing a host of technologies to aid in biological warfare
defense. These technologies include anti-smallpox drugs, and treatments for
toxins and infections that may be used in an act of terrorism.
The FDA has amended its regulations to make it easier to approve
biological warfare defense products. In addition, the U.S. federal government
increased the amount of money committed to support research in this area.
In August 2004, we acquired certain government grants and two early stage
antiviral programs, Smallpox and Arenavirus, targeting certain agents of
biological warfare from ViroPharma Incorporated. As part of the transaction, we
were awarded Phase I and II SBIR grants from the National Institute of Health,
or "NIH," totaling approximately $12 million, which will be received over the
next two years, for the development of drugs for the treatment of Smallpox and
Arenavirus as noted above.
Anti-Infectives
Our anti-infectives research targets infections that are acquired in
hospitals and drug-resistant bacteria. Our aim is to block the ability of
bacteria to attach and colonize human tissue and to cut off infection at the
first stage in the process. We are developing technologies to treat both major
classes of bacteria--gram-positive and gram-negative.
Gram-Positive Antibiotic Technology
We are developing an antibiotic technology based on the research of our
founding scientists which makes it more difficult for gram-positive bacteria to
attach to human tissue. Our scientists found that most gram-positive bacteria
utilize a particular enzyme, a protease, to attach to and colonize human tissue.
Our strategy is to develop antibiotics that inhibit the generation of protease.
In 1997, we entered into a collaborative research and license agreement with the
Wyeth-Ayerst Laboratories Division of American Home Products Corporation to
identify and develop protease inhibitors. Wyeth has completed high throughput
screening of compound libraries and is currently evaluating lead compounds. In
the first quarter of 2001, we received a milestone payment from Wyeth at the
beginning of screening for protease inhibitors. We also licensed technology from
the University of California at Los Angeles which may be incorporated into our
development of products for Wyeth.
Gram-Negative Antibiotic Technology
We are developing a technology to inhibit the ability of gram-negative
bacteria to attach to human tissue. Gram-negative bacteria utilize structures
called pili to adhere to human tissue. We believe that inhibiting the assembly
of pili should effectively inhibit diseases caused by these structures. In July
1999 and August 2000 we were awarded research grants from the NIH, to support
our development efforts in this area. We entered into agreements with Med Immune
Inc., Astra AB and 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
1
Washington University on this technology, but we are still developing the
technology which we acquired in the initial agreements.
Broad-Spectrum Antibiotic Technology
We have identified a stress response enzyme, DegP, which is conserved in
both gram-positive and gram-negative bacteria. It appears to enable bacteria to
deal with external stress factors such as temperature or oxygen radicals. Our
scientists have found that organisms lacking a functional DegP proteinase have a
decreased ability to cause disease. We believe that DegP represents a true
broad-spectrum anti-infective development target. This line of research is still
too early to make accurate assessments of its development possibilities.
Mucosal Vaccines
We are developing vaccines and a delivery system for these vaccines. We
are currently developing mucosal vaccines for strep throat and for sexually
transmitted diseases, or "STDs." A mucosal vaccine is a vaccine that activates
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. The system we are developing to deliver these mucosal
vaccines uses genetically engineered commensal bacteria. Commensal bacteria are
harmless bacteria that naturally inhabit the body's surfaces, particularly the
mucus-lined areas.
Strep Throat Vaccine Candidate
We are developing with technology we licensed from The Rockefeller
University, or "Rockefeller," a mucosal vaccine for strep throat. This vaccine
has demonstrated an ability to colonize and induce both a local and systemic
immune response in mice and rabbits. We are collaborating with the NIH and the
University of Maryland Center for Vaccine Development on the clinical
development of this vaccine candidate. In December 1997, we, in cooperation with
the NIH, filed an Investigational New Drug Application with the United States
Food and Drug Administration, or "FDA." In September 1999, the NIH awarded us a
research grant to help support the research cost of our strep program.
The first stage of clinical trials was completed at the University of
Maryland in 2000. The study showed the delivery system to be well-tolerated and
that the commensal bacteria was spontaneously or easily eradicated. A second
clinical trial of the commensal delivery system without the strep throat vaccine
technology was initiated in 2000 at the University of Maryland. This trial was
completed in January 2002 and the results corroborated the conclusions of the
earlier study regarding tolerance and eradication. We are currently performing
experiments to test the vaccine formulation prior to initiating Phase I human
trials with the vaccine.
Sexually Transmitted Disease Vaccine Candidates
We are developing a mucosal vaccine for STDs utilizing technology we
licensed from Oregon State University and Washington University. We are
primarily focused on developing a vaccine for chlamydia, the most common form of
STD, and Neisseria, the agent which causes gonorrhea. As both of these STDs
enter people via mucus-lined surfaces of the body, we believe that a mucosal
vaccine will be a more effective delivery method than a traditional vaccine. In
February 2000, we entered into an agreement with the Ross Products Division of
Abbott Laboratories under which Ross provided us with funding for development of
an STD vaccine. The research program was completed in late 2001. The agreement
was extended through the first quarter of 2003 to permit an additional set of
experiments to be conducted, one of which has not been conducted as of the date
of this prospectus. The parties to the agreement are currently considering
whether to proceed with the remaining experiment.
Surface Protein Expression System
We are developing a technology to overproduce many bacterial and human
proteins. The current methods of overproducing such proteins have faced
difficulties in purifying the proteins. By applying their
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knowledge of gram-positive bacterial protein expression, our scientists have
developed our surface protein expression system, or "SPEX." Our scientists
believe that SPEX eases the protein purification, as well as increasing the
likelihood that the secreted proteins will be folded properly. We have recently
used the SPEX system to obtain large quantities of a pure protein antigen in
preclinical studies. We have commenced a program to transfer the method from a
laboratory scale environment to a commercial production facility. Our business
strategy is to license this technology on a non-exclusive basis for a broad
range of applications.
3
RISK FACTORS
Investing in our common stock involves a high degree of risk, and you
should be able to bear losing your entire investment. You should carefully
consider the risks presented by the following factors.
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 approximately $6.3 million for the nine months
ended September 30, 2004, $5.3 million and approximately $3.3 million for the
years ended December 31, 2003 and 2002, respectively. As of September 30, 2004,
December 31, 2003 and December 31, 2002, our accumulated deficit was
approximately $41.1 million, $34.8 million and $29.5 million, respectively. We
expect to continue to incur significant operating expenditures. 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, then 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.
Our business will suffer if we are unable to raise additional equity funding.
We continue to be dependent on our ability to raise money in the equity
markets. There is no guarantee that we will continue to be successful in raising
such funds. If we are unable to raise additional equity funds, we may be forced
to discontinue or cease certain operations. We currently have sufficient
operating capital to finance our operations at least through the year ending
December 31, 2005. Our annual operating needs vary from year to year depending
upon the amount of revenue generated through grants and licenses and the amount
of projects we undertake, as well as the amount of resources we expend, in
connection with acquisitions all of which may materially differ from year to
year and may adversely affect our business.
Most of our immediately foreseeable future revenues are contingent upon
government grants and contracts, collaborative and license agreements and we may
not achieve sufficient revenues from these agreements to attain profitability.
Until and unless we successfully make a product, our ability to generate
revenues will largely depend on our ability to procure governments grants and
contracts, enter into additional collaborative and license agreements with third
parties and maintain the agreements we currently have in place. Substantially
all of our revenues for the nine months ended September 30, 2004 and the years
ended December 31, 2003 and 2002, respectively, were derived from revenues
related to grants, contracts and license agreements. We will receive little or
no revenues under our collaborative 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
revenue is substantially dependent on the continuing revenue from grants from
the NIH received in August of 2004 totaling approximately $12 million over a
two-year period and contract work being performed for the U.S. Army which
expires at the end of December 2007. These agreements are for specific work to
be performed under the agreements and could only be canceled by the other party
thereto for non-performance by the other party thereto.
Several factors will affect our future receipt of revenues from
collaborative arrangements, including 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.
4
We have material agreements with the following collaborators:
o The Rockefeller University. The term of our agreement with
Rockefeller is for the duration of the patents and a number of
pending patents. As we do not currently know when any patents
pending or future patents will expire, we cannot at this time
definitively determine the term of this agreement. The agreement can
be terminated earlier if we are in breach of the provisions of the
agreement and do not cure the breach in the allowed cure period. We
are current in all obligations under the contract.
o Wyeth. Our license agreement expires on the earlier of June 30,
2007, or the last to expire patent that we have sub-licensed to
them. Wyeth has the right to terminate the agreement on 90 days
written notice. If terminated, all rights granted to Wyeth will
revert to us, except for any compound identified by Wyeth prior to
the date of termination and subject to the milestones and royalty
obligations of the agreement.
o National Institutes of Health. Under our collaborative agreement
with the NIH, it is required to conduct and pay for the clinical
trials of our strep vaccine product through phase II human trials.
The NIH can terminate the agreement on 60 days written notice. If
terminated, we receive copies of all data, reports and other
information related to the trials. If terminated, we would have to
find another source of funds to continue to conduct the trials. We
are a party to grants awarded in August of 2004 for a total of
approximately $12 million to be paid over a two-year period. We were
party to another collaborative agreement with the NIH under which we
received a grant for approximately $865,000. The term of this
agreement expired in May 2004.
o Washington University. We have licensed certain technology from
Washington under a non-exclusive license agreement. The term of our
agreement with Washington is for the duration of the patents and a
number of pending patents. As we do not currently know when any
patents pending or future patents will expire, we cannot at this
time definitively determine the term of this agreement. The
agreement cannot be terminated unless we fail to pay our share of
the joint patent costs for the technology licensed. We have
currently met all our obligations under this agreement.
o Regents of the University of California. We have licensed certain
technology from Regents under an exclusive license agreement. We are
required to pay minimum royalties under this agreement. This
agreement is related to our agreement with Wyeth and expires at the
same time as that agreement. It can be cancelled earlier if we
default on our obligations or if Wyeth cancels its agreement with
SIGA and we are not able to find a replacement for Wyeth. We have
currently met all our obligations under this agreement.
o TransTech Pharma, Inc. Under our collaborative agreement with
TransTech Pharma, a related party, TransTech Pharma is required to
collaborate with us on the discovery, optimization and development
of lead compounds to therapeutic agents. We and TransTech Pharma
have agreed to share the costs of development and revenues generated
from licensing and profits from any commercialized products sales.
The agreement will be in effect until terminated by the parties or
upon cessation of research or sales of all products developed under
the agreement. We are current in all obligations under this
agreement.
Our stock price is, and we expect it to remain, volatile, which could limit
investors' ability to sell stock at a profit.
The volatile price of our stock makes it difficult for investors to
predict the value of their investment, to sell shares at a profit at any given
time, or to plan purchases and sales in advance. A variety of factors may affect
the market price of our common stock. These include, but are not limited to:
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o publicity regarding actual or potential clinical results relating to
products under development by our competitors or us;
o delay or failure in initiating, completing or analyzing pre-clinical
or clinical trials or the unsatisfactory design or results of these
trials;
o achievement or rejection of regulatory approvals by our competitors
or us;
o announcements of technological innovations or new commercial
products by our competitors or us;
o developments concerning proprietary rights, including patents;
o developments concerning our collaborations;
o regulatory developments in the United States and foreign countries;
o economic or other crises and other external factors;
o period-to-period fluctuations in our revenues and other results of
operations;
o changes in financial estimates by securities analysts; and
o sales of our common stock.
Additionally, because there is not a high volume of trading in our stock,
any information about SIGA in the media may result in significant volatility in
our stock price.
We will not be able to control many of these factors, and we believe that
period-to-period comparisons of our financial results will not necessarily be
indicative of our future performance.
In addition, the stock market in general, and the market for biotechnology
companies in particular, has experienced extreme price and volume fluctuations
that may have been unrelated or disproportionate to the operating performance of
individual companies. These broad market and industry factors may seriously harm
the market price of our common stock, regardless of our operating performance.
The following table presents the high and low bid range of our stock for
the past eight quarters.
Bid Range
2002 High Low
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Fourth Quarter............................... $2.15 $0.65
2003 High Low
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First Quarter................................ $1.49 $1.02
Second Quarter............................... $1.91 $1.09
Third Quarter................................ $2.13 $1.61
Fourth Quarter............................... $2.60 $1.80
2004 High Low
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First Quarter................................ $2.82 $1.83
Second Quarter............................... $2.12 $1.25
Third Quarter................................ $1.75 $1.00
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We are in various stages of product development and there can be no assurance of
successful commercialization.
In general, our research and development programs are at an early stage of
development. The strep vaccine program is in Phase I clinical trials. All other
programs are in the pre-clinical stage of development. Our biological warfare
defense products do not need human clinical trials for approval by the FDA. We
will need to perform two animal models and provide safety data for a product to
be approved. Our other products will be subject to the approval guidelines under
FDA regulatory requirements which include a number of phases of testing in
humans.
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 resulting from our research and
development efforts will be commercially available for many years, if at all.
We have limited experience in conducting pre-clinical testing and clinical
trials. Even if we receive initially positive pre-clinical or 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;
o be reimbursed by government and private insurers; and
o achieve customer acceptance.
In addition, third parties may preclude us from marketing our drugs
through enforcement of their proprietary rights, or 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.
We may face limitations on our ability to attract suitable acquisition
opportunities or to integrate additional acquired businesses and the failure to
consummate an acquisition may significantly drain our resources.
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. Failure to make an acquisition will limit our
ability to grow, but will not be central to our continued existence. Costs
associated with failed acquisitions, may result in significant operating costs
that may need to be financed from operations or from additional equity capital.
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We may not be able to consummate potential acquisitions or an acquisition may
not enhance our business or may decrease rather than increase our earnings.
In the future, we may issue additional securities in connection with one
or more acquisitions, which may dilute our existing shareholders. Future
acquisitions could also divert substantial management time and result in short
term reductions in earnings or special transaction or other charges. In
addition, we cannot guarantee that we will be able to successfully integrate the
businesses that we may acquire into our existing business. Our shareholders may
not have the opportunity to review, vote on or evaluate future acquisitions.
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, 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. Two companies with
similar profiles are VaxGen, Inc., which is developing vaccines against anthrax,
Smallpox and HIV/AIDS; and Avant Immunotherapeutics, Inc., which has vaccine
programs for agents of biological warfare.
Because we must obtain regulatory clearance to test and market our products in
the United States, we cannot predict whether or when we will be permitted to
commercialize our products.
A pharmaceutical product cannot be marketed in the U.S. until it has
completed rigorous pre-clinical testing and clinical trials and an extensive
regulatory clearance process implemented by the FDA. Pharmaceutical products
typically take many years to satisfy regulatory requirements and require the
expenditure of substantial resources depending on the type, complexity and
novelty of the product.
Before commencing clinical trials in humans, we must submit and receive
clearance from the FDA by means of an Investigational New Drug application.
Institutional review boards and the FDA oversee clinical trials and such trials:
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
Investigational New Drug application or the conduct of these trials.
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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 we obtain 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.
If regulatory clearance of a product is granted, this clearance will be
limited only to those 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.
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. If there is an adverse
outcome in litigation or an interference to determine priority or other
proceeding in a court or patent office, then we, or our collaborators and
licensors, could be subjected to significant liabilities, required to license
disputed rights from or to other parties and/or required to cease using a
technology necessary to carry out research, development and commercialization.
At present we are unaware of any or potential infringement claims against our
patent portfolio.
The costs 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 researching, developing or
commercializing 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 and/or these
individuals may be subject to allegations of trade secret misappropriation or
other similar claims as a result of their prior affiliations.
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
9
claims allowed in biotechnology patents has emerged to date. Accordingly, we
cannot predict the type and breadth of claims allowed in these patents.
We have licensed the rights to seven issued U.S. patents and three issued
European patents. These patents have varying lives and they are related to the
technology licensed from Rockefeller University for the Strep and Gram-positive
products. We have two additional patent applications in the U.S. and two
applications in Europe relating to this technology. We are joint owner with
Washington University of seven issued patents in the U.S. and two in Europe. In
addition, there are four co-owned U.S. patent applications. These patents are
for the technology used for the gram negative product opportunities. We are also
the exclusive owner of one U.S. patent and one PCT application that relates to
our DegP product opportunities.
The following is our patent position as of September 30, 2004:
- ----------------------------------------------------------------------------------------------------------------
Number Number
Exclusively Number Exclusively
Licensed Co-Exclusively Licensed Number
from Licensed with from Oregon Exclusively Number Patent
Rockefeller Washington State Licensed Owned by Expiration
PATENTS Univ. Univ. University from UCLA SIGA Dates
- ----------------------------------------------------------------------------------------------------------------
2013,
2014(3),
2015(4),
U.S. 7 7 1 1 2016(2),
2017,
2019 (2),
2020(2), 2021
- ----------------------------------------------------------------------------------------------------------------
2004,2009
Australia 5 2 1 2014(2),
2015,2016
2019,2020
- ----------------------------------------------------------------------------------------------------------------
Canada 3 1 2004,2010
2014,2019
- ----------------------------------------------------------------------------------------------------------------
Europe 3 2 2004,2009
2010,2014
2020
- ----------------------------------------------------------------------------------------------------------------
2004 (2),
Japan 4 2 2010,2012
2014,2020
- ----------------------------------------------------------------------------------------------------------------
Mexico 1 2016
- ----------------------------------------------------------------------------------------------------------------
New Zealand 1 2016
- ----------------------------------------------------------------------------------------------------------------
APPLICATIONS
- ----------------------------------------------------------------------------------------------------------------
U.S. applications 1 4 1 3
- ----------------------------------------------------------------------------------------------------------------
U.S. provisionals 3
- ----------------------------------------------------------------------------------------------------------------
Australia 1 1 3
- ----------------------------------------------------------------------------------------------------------------
China 1
- ----------------------------------------------------------------------------------------------------------------
Canada 3 1 1 1 2
- ----------------------------------------------------------------------------------------------------------------
Europe 2 1 3
- ----------------------------------------------------------------------------------------------------------------
Japan 3 1 3
- ----------------------------------------------------------------------------------------------------------------
10
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 experience 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.
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 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. The research and development activities of
our company do not produce any unusual hazardous products. We do use small
amounts of 32P, 35S and 3H, which are stored, used and disposed of in accordance
with Nuclear Regulatory Commission ("NRC") regulations. We maintain liability
insurance in the amount of approximately $5,000,000 and we believe this should
be sufficient to cover any contingent losses.
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.
Our potential products may not be acceptable in the market or eligible for third
party reimbursement resulting in a negative impact on our future financial
results.
Any products successfully developed by us or our collaborative partners
may not achieve market acceptance. The antibiotic products which we are
attempting to develop will compete with a number of well-established traditional
antibiotic drugs manufactured and marketed by major pharmaceutical companies.
The degree of market acceptance of any of our products will depend on a number
of factors, including:
o the establishment and demonstration in the medical community of the
clinical efficacy and safety of such products,
o the potential advantage of such products over existing treatment
methods, and
o reimbursement policies of government and third-party payors.
Physicians, patients or the medical community, in general, may not accept
or utilize any products that we or our collaborative partners may develop. Our
ability to receive revenues and income with respect to drugs, if any, developed
through the use of our technology will depend, in part, upon the extent to which
reimbursement for the cost of such drugs will be available from third-party
payors, such as government
11
health administration authorities, private healthcare insurers, health
maintenance organizations, pharmacy benefits management companies and other
organizations. Third-party payors are increasingly disputing the prices charged
for pharmaceutical products. If third-party reimbursement was not available or
sufficient to allow profitable price levels to be maintained for drugs developed
by us or our collaborative partners, it could adversely affect our business.
If our products harm people, we may experience product liability claims that may
not be covered by insurance.
We face an inherent business risk of exposure to potential product
liability claims in the event that drugs we develop are alleged to cause adverse
effects on patients. Such risk exists for products being tested in human
clinical trials, as well as products that receive regulatory approval for
commercial sale. We may seek to obtain product liability insurance with respect
to drugs we and/or or our collaborative partners develop. However, we may not be
able to obtain such insurance. Even if such insurance is obtainable, it may not
be available at a reasonable cost or in a sufficient amount to protect us
against liability.
We may be required to perform additional clinical trials or change the labeling
of our products if we or others identify side effects after our products are on
the market, which could harm sales of the affected products.
If we, or others, identify side effects after any of our products, if any,
after they are on the market, or if manufacturing problems occur:
o regulatory approval may be withdrawn;
o reformulation of our products, additional clinical trials, changes
in labeling of our products may be required;
o changes to or re-approvals of our manufacturing facilities may be
required;
o sales of the affected products may drop significantly;
o our reputation in the marketplace may suffer; and
o lawsuits, including class action suits, may be brought against us.
Any of the above occurrences could harm or prevent sales of the affected
products or could increase the costs and expenses of commercializing and
marketing these products.
The manufacture of genetically engineered commensals is a time-consuming and
complex process which may delay or prevent commercialization of our products, or
may prevent our ability to produce an adequate volume for the successful
commercialization of our products.
Although our management believes that we have the ability to acquire or
produce quantities of genetically engineered commensals sufficient to support
our present needs for research and our projected needs for our initial clinical
development programs, management believes that improvements in our manufacturing
technology will be required to enable us to meet the volume and cost
requirements needed for certain commercial applications of commensal products.
Products based on commensals have never been manufactured on a commercial scale.
The manufacture of all of our products will be subject to current Good
Manufacturing Practices, or "GMP," requirements prescribed by the FDA or other
standards prescribed by the appropriate regulatory agency in the country of use.
There can be no assurance that we will be able to manufacture products, or have
products manufactured for us, in a timely fashion at acceptable quality and
prices, that we or third party manufacturers can comply with GMP, or that we or
third party manufacturers will be able to manufacture an adequate supply of
product.
12
Healthcare reform and controls on healthcare spending may limit the price we
charge for any products and the amounts thereof that we can sell.
The U.S. federal government and private insurers have considered ways to
change, and have changed, the manner in which healthcare services are provided
in the U.S. Potential approaches and changes in recent years include controls on
healthcare spending and the creation of large purchasing groups. In the future,
the U.S. government may institute further controls and limits on Medicare and
Medicaid spending. These controls and limits might affect the payments we could
collect from sales of any products. Uncertainties regarding future healthcare
reform and private market practices could adversely affect our ability to sell
any products profitably in the U.S. At present, we do not foresee any changes in
FDA regulatory policies that would adversely affect our development programs.
The future issuance of preferred stock may adversely affect the rights of the
holders of our common stock.
Our certificate of incorporation allows our Board of Directors to issue up
to 10,000,000 shares of preferred stock and to fix the voting powers,
designations, preferences, rights and qualifications, limitations or
restrictions of these shares without any further vote or action by the
stockholders. The rights of the holders of common stock will be subject to, and
could be adversely affected by, the rights of the holders of any preferred stock
that we may issue in the future. The issuance of preferred stock, while
providing desirable flexibility in connection with possible acquisitions and
other corporate purposes, could have the effect of making it more difficult for
a third party to acquire a majority of our outstanding voting stock, thereby
delaying, deferring or preventing a change in control.
Concentration of ownership of our capital stock could delay or prevent change of
control.
Our directors, executive officers and principal stockholders beneficially
own a significant percentage of our common stock and preferred stock. They also
have, through the exercise or conversion of certain securities, the right to
acquire additional common stock. As a result, these stockholders, if acting
together, have the ability to significantly influence the outcome of corporate
actions requiring shareholder approval. Additionally, this concentration of
ownership may have the effect of delaying or preventing a change in control of
SIGA. At November 10, 2004, directors, officers and principal stockholders
beneficially owned approximately 48.7% of our stock.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission. The prospectus relates to 1,000,000 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. 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."
FORWARD-LOOKING STATEMENTS
This prospectus contains certain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995, as amended,
including statements regarding the efficacy of potential products, the timelines
for bringing such products to market and the availability of funding sources for
continued development of such products. Forward-looking statements are based on
13
management's estimates, assumptions and projections, and are subject to
uncertainties, many of which are beyond the control of SIGA, as well as
assumptions made by and information currently available to management. When used
in this prospectus, including the information incorporated by reference, the
words "anticipate," "believe," "estimate," "expect," "may," "will," "continue"
and "intend," and words or phrases of similar import, as they relate to our
financial position, business strategy and plans, or objectives of management,
are intended to identify forward-looking statements. Actual results may differ
materially from those anticipated in any forward-looking statement. Factors that
may cause such differences include the risks that (a) potential products that
appear promising to SIGA or its collaborators cannot be shown to be efficacious
or safe in subsequent pre-clinical or clinical trials, (b) SIGA or its
collaborators will not obtain appropriate or necessary governmental approvals to
market these or other potential products, (c) SIGA may not be able to obtain
promised funding for its development projects or other needed funding, and (d)
SIGA may not be able to secure or enforce adequate legal protection, including
patent protection, for its products. More detailed information about SIGA and
risk factors that may affect the realization of forward-looking statements,
including the forward-looking statements in this presentation, is set forth
under the heading "Risk Factors" beginning on page 4 of this prospectus, in
SIGA's filings with the Securities and Exchange Commission, including SIGA's
Annual Report on Form 10-K for the fiscal year ended December 31, 2003, and in
other documents that SIGA has filed with the Commission. SIGA urges investors
and security holders to read those documents free of charge at the Commission's
Web site at http://www.sec.gov. Interested parties may also obtain those
documents free of charge from SIGA. SIGA does not undertake to publicly update
or revise its forward-looking statements as a result of new information, future
events or otherwise.
Although we believe that our expectations are reasonable, we cannot assure
you that our expectations will prove to be correct. Should any one or more of
these risks or uncertainties materialize, or should any underlying assumptions
prove incorrect, actual results may vary materially from those described in this
prospectus as anticipated, believed, estimated, expected, intended or planned.
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.
14
SELLING STOCKHOLDERS
The table below sets forth information regarding ownership of our common
stock by the selling stockholders as of November 10, 2004, and the shares of
common stock to be sold by them under this prospectus. Beneficial ownership is
determined in accordance with rules of the Securities and Exchange Commission
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. The rules of the
Securities and Exchange Commission 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 10, 2004. As of November
10, 2004, 24,500,648 shares of our common stock were outstanding.
Securities Owned Prior to Offering Securities Owned After Offering (1)
--------------------------------------------------------------------------------------------
Shares of Number of Percent of
Shares of Percent of Common Stock Shares of Common
Name of Selling Stockholder Common Stock Common Stock Offered Hereby Common Stock Stock
- ----------------------------------------------------------------------------------------------------------------------------
ViroPharma Incorporated 700,000 2.9% 700,000 -0- 0.0%
Marc Collett 300,000 1.2% 300,000 -0- 0.0%
(1) Assumes that all shares of common stock covered by this prospectus are
sold in the offering.
The information provided in the table above with respect to the selling
stockholders has been obtained from such selling stockholders.
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.
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.
We have filed with the Securities and Exchange Commission, 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) three years from the date on which this
registration statement on Form S-3 becomes effective, or (ii) the date on which
the selling stockholders have sold all of the shares of common stock.
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 and any of their
pledgees, donees, assignees and successors-in-interest. 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:
15
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;
o in privately negotiated transactions;
o broker-dealers may agree with selling stockholders to sell a
specified number of such shares at a stipulated price per share; and
o any other manner permitted pursuant to applicable law.
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 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
16
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:
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 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 us by Kramer Levin Naftalis & Frankel LLP.
EXPERTS
The financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-KSB for the year ended December 31, 2003 have been
so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an
independent registered public accounting firm, given on the authority of said
firm as experts in auditing and accounting.
The financial statements of Plexus Vaccine Inc. incorporated in this
prospectus by reference to Amendment No. 1 to the Current Report on Form 8-K
dated May 23, 2003 (filed on July 22, 2003) 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.
COMMISSION'S POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors, officers and controlling persons,
we have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act
17
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by us of expenses incurred or
paid by one of our directors, officers or controlling persons in the successful
defense of any action, suit or proceeding) is asserted by that director, officer
or controlling person in connection with the securities being registered, we
will, unless in the opinion of our counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether that indemnification by us is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of that issue.
ADDITIONAL INFORMATION
Government Filings.
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file at the SEC's public reference room at 450 Fifth Street,
N.W., Washington, D.C. 20549. You may obtain information on the operation of the
SEC's public reference room in Washington, D.C. by calling the SEC at
1-800-SEC-0330.
We have filed with the SEC a registration statement on form S-3 to
register the shares of common stock to be offered. This prospectus is part of
that registration statement and, as permitted by the SEC's rules, does not
contain all the information included in the registration statement. For further
information about us and our common stock, you should refer to that registration
statement and to the exhibits and schedules filed as part of that registration
statement, as well as the documents we have incorporated by reference which are
discussed below. You can review and copy the registration statement, its
exhibits and schedules, as well as the documents we have incorporated by
reference, at the public reference facilities maintained by the SEC as described
above. The registration statement, including its exhibits and schedules, are
also available on the SEC's web site, given above.
Stock Market.
Shares of our common stock are traded on the Nasdaq SmallCap Market.
INCORPORATION BY REFERENCE
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 incorporated by reference is an
important part of this prospectus, and information that we file later with the
SEC will automatically update and supersede this information. We incorporate by
reference the documents listed below and any further filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, until this
offering has been completed:
o the Annual Report on Form 10-KSB for the year ended December 31,
2003;
o 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;
o quarterly report on Form 10-QSB for the quarter ended March 31,
2004;
o quarterly report on Form 10-QSB for the quarter ended June 30, 2004;
o quarterly report on Form 10-QSB for the quarter ended September 30,
2004; and
o our current reports on Form 8-K filed on July 22, 2003, January 13,
2004, January 30, 2004, March 22, 2004, April 21, 2004, June 1,
2004, June 9, 2004, July 6, 2004, August 25, 2004
18
(as amended on August 25, 2004), September 14, 2004, October 5,
2004, October 25, 2004 November 15, 2004 and November 24, 2004.
We will furnish to any person to whom this prospectus is delivered,
without charge, a copy of these documents upon written or oral request to Thomas
N. Konatich, Chief Financial Officer, 420 Lexington Avenue, Suite 601, New York,
New York 10170, tel. (212) 672-9100.
19
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
------------
SEC filing fee....................................... $175.48
Printing expenses.................................... $2,000.00
Legal Fees and Expenses.............................. $15,000.00
Accounting Fees and Expenses......................... $5,000.00
Miscellaneous........................................ $325.00
Total..................................... $22,500.00
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.
Item 16. Exhibits
Exhibit No. Description
- ----------- -----------
5.1 Opinion of Kramer Levin Naftalis & Frankel LLP.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Kramer Levin Naftalis & Frankel LLP (contained in
the opinion filed as Exhibit 5.1 hereto).
24.1 Power of Attorney (included on the signature page of this
Registration Statement).
II-1
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act.
(ii) 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 together, 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 Securities and Exchange Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement.
(iii) Include any additional or change material information
with respect to the plan of distribution not previously
disclosed in the Registration Statement.
Notwithstanding anything contained herein to the contrary,
paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the
information required to be included in a post-effective amendment is
incorporated by reference from periodic reports filed by the
Registrant under the Exchange Act.
(2) For the purpose of determining any liability under the Securities
Act, treat each post-effective amendment as a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time as the initial bona fide
offering thereof.
(3) To file a post-effective amendment to remove from registration any
of the securities being registered that remain unsold at the end of
the offering.
(b) Insofar as indemnification for liabilities arising under the Securities Act
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 Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the 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 it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-2
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
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, New York on November 24, 2004.
SIGA Technologies, Inc.
By: /s/ Thomas N. Konatich
----------------------------------
Name: Thomas N. Konatich
Title: Chief Financial Officer
KNOW ALL PERSONS BY THESE PRESENTS, that the persons whose signatures
appear below each severally constitutes and appoints Thomas N. Konatich and
Bernard L. Kasten his true and lawful attorneys-in-fact and agents, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
pre-effective and post-effective amendments) to this registration statement and
to sign any registration statement (and any post-effective amendments) relating
to the same offering as this registration statement that is to be effective upon
filing pursuant to Rule 462(b) under the Securities Act of 1933, and to file the
same, with all exhibits, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all which said attorneys-in-fact and agents, or their substitute, may
lawfully do, or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
/s/ Bernard L. Kasten
- ---------------------------- Chief Executive Officer,
Bernard L. Kasten, Jr., M.D. Director November 24, 2004
/s/ Thomas N. Konatich
- ----------------------------
Thomas N. Konatich Chief Financial Officer November 24, 2004
/s/ Donald G. Drapkin
- ----------------------------
Donald G. Drapkin Chairman of the Board November 24, 2004
- ----------------------------
Roger Brent, Ph.D. Director
/s/ Charles Cantor
- ----------------------------
Charles Cantor, Ph.D Director November 24, 2004
/s/ Thomas E. Constance
- ----------------------------
Thomas E. Constance Director November 24, 2004
/s/ Adnan M. Mjalli
- ----------------------------
Adnan M. Mjalli, Ph.D. Director November 24, 2004
/s/ Mehmet C. Oz
- ----------------------------
Mehmet C. Oz Director November 24, 2004
/s/ Eric A. Rose
- ----------------------------
Eric A. Rose Director November 24, 2004
/s/ Paul G. Savas
- ----------------------------
Paul G. Savas Director November 24, 2004
/s/ Michael Weiner
- ----------------------------
Michael Weiner Director November 24, 2004
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
5.1 Opinion of Kramer Levin Naftalis & Frankel LLP.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Kramer Levin Naftalis & Frankel LLP (contained in
the opinion filed as Exhibit 5.1 hereto).
24.1 Power of Attorney (included on the signature page of this
Registration Statement).
Exhibit 5.1
[LETTERHEAD OF KRAMER LEVIN NAFTALIS & FRANKEL LLP]
November 24, 2004
SIGA Technologies, Inc.
420 Lexington Avenue
Suite 601
New York, New York 10170
Ladies and Gentlemen:
We have acted as counsel to SIGA Technologies, Inc., a Delaware
corporation (the "Registrant"), in connection with the preparation and filing of
a Registration Statement on Form S-3 (the "Registration Statement") with the
Securities and Exchange Commission (the "Commission"), with respect to the
registration under the Securities Act of 1933, as amended (the "Act"), of an
aggregate of 1,000,000 shares (the "Shares") of common stock, par value $0.0001
per share, of the Company (the "Common Stock").
We have reviewed copies of the Registration Statement, the Restated
Certificate of Incorporation of the Registrant, the Bylaws of the Registrant, as
amended, and resolutions of the Board of Directors of the Registrant.
We have also reviewed such other documents and made such other
investigations as we have deemed appropriate. As to various questions of fact
material to this opinion, we have relied upon statements, representations and
certificates of officers or representatives of the Registrant, public official
and others. We have not independently verified the facts so relied on.
Based upon the foregoing, and subject to the qualifications,
limitations and assumptions set forth herein, we are of the opinion that the
Shares have been legally issued, and are fully paid and non-assessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the prospectus included in the Registration Statement. 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 Securities Act or the rules and
regulations promulgated thereunder.
We do not express any opinion with respect to any law other than the
Delaware General Corporation Law and the federal laws of the United States of
America. This opinion is rendered only with respect to the laws and legal
interpretations and the facts and circumstances in effect on the date hereof.
Thomas E. Constance, a member of this Firm, is also a director of
the Company.
Very truly yours,
/s/ KRAMER LEVIN NAFTALIS & FRANKEL LLP
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 17, 2004 relating to the
financial statements, which appears in SIGA Technologies, Inc.'s Annual Report
on Form 10-KSB for the year ended December 31, 2003. We also consent to the
reference to us under the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
New York, New York
November 23, 2004
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 July 17, 2003 relating to the
financial statements of Plexus Vaccine Inc., which appears in Amendment No. 1 to
the Current Report on Form 8-K of SIGA Technologies, Inc., dated May 23, 2003
(filed on July 22, 2003). We also consent to the reference to us under the
heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
New York, New York
November 23, 2004