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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
(Mark One)
|X| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarter Ended June 30, 2005
OR
|_| Transition Report Pursuant To Section 13 Or 15(d) Of the Securities
Exchange Act of 1934
For the Transition Period from ___________ to _____________
Commission File No. 0-23047
SIGA Technologies, Inc.
(Exact name of registrant as specified in its charter)
A Delaware Corporation IRS Employer No. 13-3864870
420 Lexington Avenue, Suite 408, New York, NY 10170
Telephone Number (212) 672-9100
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|.
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes |_| No|X|.
As of August 11, 2005 the registrant had 24,500,648 shares of common stock
outstanding.
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SIGA Technologies, Inc.
Form 10-Q
Table of Contents
Page No.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements................................................................................2
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations...............9
Item 3. Quantitative and Qualitative Disclosure About Market Risk..........................................15
Item 4. Controls and Procedures............................................................................15
PART II OTHER INFORMATION
Item 1. Legal Proceedings..................................................................................16
Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities...................16
Item 3. Defaults Upon Senior Securities....................................................................16
Item 4. Submission of Matters to Vote of Security Holders..................................................16
Item 5. Other Information..................................................................................16
Item 6. Exhibits...........................................................................................16
SIGNATURES.................................................................................................17
1
SIGA TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
June 30,
2005 December 31,
(Unaudited) 2004
------------ ------------
ASSETS
Current assets
Cash and cash equivalents ......................................................... $ 689,046 $ 2,020,938
Accounts receivable ............................................................... 62,730 108,904
Prepaid expenses .................................................................. 104,418 278,547
------------ ------------
Total current assets ............................................................. 856,194 2,408,389
Property, plant and equipment, net ................................................ 1,042,800 508,015
Goodwill .......................................................................... 898,334 898,334
Intangible assets, net ............................................................ 1,481,433 2,114,297
Other assets ...................................................................... 234,126 181,725
------------ ------------
Total assets ..................................................................... $ 4,512,887 $ 6,110,760
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable .................................................................. $ 2,110,303 $ 1,148,277
Accrued expenses and other ........................................................ 301,359 403,072
Note payable to General Electric Capital Corporation .............................. 267,986 --
------------ ------------
Total liabilities ................................................................ 2,679,648 1,551,349
Commitments and contingencies ........................................................ -- --
Stockholders' equity
Series A convertible preferred stock ($.0001 par value, 10,000,000 shares
authorized, 68,038 issued and outstanding at June 30, 2005
and December 31, 2004) ........................................................... 58,672 58,672
Common stock ($.0001 par value, 50,000,000 shares authorized,
24,500,648 issued and outstanding at June 30, 2005
and December 31, 2004) ........................................................... 2,450 2,450
Additional paid-in capital ........................................................ 48,691,350 48,679,650
Accumulated deficit ............................................................... (46,919,233) (44,181,361)
------------ ------------
Total stockholders' equity ....................................................... 1,833,239 4,559,411
------------ ------------
Total liabilities and stockholders' equity ....................................... $ 4,512,887 $ 6,110,760
============ ============
The accompanying notes are an integral part of these financial statements.
2
SIGA TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
------------ ------------ ------------ ------------
Revenues
Research and development ....................... $ 1,863,995 $ 298,537 $ 3,322,560 $ 459,754
------------ ------------ ------------ ------------
Operating expenses
Selling, general and administrative ............ 811,238 1,111,534 1,655,948 2,117,394
Research and development ....................... 2,582,752 1,026,450 4,134,391 2,045,991
Patent preparation fees ........................ 90,852 54,901 265,890 146,740
Loss on impairment of intangible assets ........ 610,063 610,063
------------ ------------ ------------ ------------
Total operating expenses ..................... 3,484,842 2,802,948 6,056,229 4,920,188
------------ ------------ ------------ ------------
Operating loss ............................... (1,620,847) (2,504,411) (2,733,669) (4,460,434)
Other income (loss), net ........................... (9,600) 14,776 (4,203) 31,231
------------ ------------ ------------ ------------
Net loss ..................................... $ (1,630,447) $ (2,489,635) $ (2,737,872) $ (4,429,203)
============ ============ ============ ============
Weighted average shares outstanding:
Basic and diluted ............................ 24,500,648 23,443,881 24,500,648 23,227,213
============ ============ ============ ============
Net loss per share: basic and diluted .............. $ (0.07) $ (0.11) $ (0.11) $ (0.19)
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
3
SIGA TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended
June 30,
2005 2004
----------- -----------
Cash flows from operating activities:
Net loss ..................................................................... $(2,737,872) $(4,429,203)
Adjustments to reconcile net loss to net
cash used in operating activities:
Loss on impairment of intangible assets .................................... -- 610,063
Loss on impairment of investments .......................................... 15,000 --
Loss on write-off of prepaid expenses ...................................... 91,083
Depreciation ............................................................... 78,793 178,304
Amortization of intangible assets .......................................... 632,864 278,152
Issuance of stock options to non-employee directors ........................ 11,700 --
Changes in assets and liabilities:
Accounts receivable ...................................................... 46,174 (8,195)
Prepaid expenses ......................................................... 83,046 (19,695)
Other assets ............................................................. (67,401) (28,274)
Accounts payable and accrued expenses .................................... 860,313 312,386
----------- -----------
Net cash used in operating activities .................................... (986,300) (3,106,462)
----------- -----------
Cash flows from investing activities:
Capital expenditures ......................................................... (613,578) (30,222)
----------- -----------
Net cash used in investing activities .................................... (613,578) (30,222)
----------- -----------
Cash flows from financing activities:
Proceeds from note payable to GE Capital ..................................... 267,986
Net proceeds from issuance of common stock ................................... -- 6,784,607
Proceeds from exercise of options and warrants ............................... -- 19,375
----------- -----------
Net cash provided from financing activities .............................. 267,986 6,803,982
----------- -----------
Net increase (decrease) in cash and cash equivalents ........................... (1,331,892) 3,667,298
Cash and cash equivalents at beginning of period ............................... 2,020,938 1,440,724
----------- -----------
Cash and cash equivalents at end of period ..................................... $ 689,046 $ 5,108,022
=========== ===========
The accompanying notes are an integral part of these financial statements.
4
Notes to the June 30, 2005 Consolidated Financial Statements (Unaudited)
1. Basis of Presentation
The financial statements of SIGA Technologies, Inc. (the "Company") have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the rules of the Securities and Exchange Commission
(the "SEC") for quarterly reports on Forms 10-Q and do not include all of the
information and footnote disclosures required by generally accepted accounting
principles for complete financial statements. These statements should be read in
conjunction with the Company's audited financial statements and notes thereto
for the year ended December 31, 2004, included in the 2004 Form 10-K. In the
opinion of management, all adjustments (consisting of normal and recurring
adjustments) considered necessary for a fair presentation of the results of the
interim periods presented have been included. The results of operations for the
three and six months ended June 30, 2005 are not necessarily indicative of the
results expected for the full year.
The accompanying financial statements have been prepared on a basis which
assumes that the Company will continue as a going concern and which contemplates
the realization of assets and the satisfaction of liabilities and commitments in
the normal course of business. The Company has incurred cumulative net losses
and expects to incur additional losses to perform further research and
development activities. The Company does not have commercial products and has
limited capital resources. Management's plans with regard to these matters
include continued development of its products as well as seeking additional
research support funds and financial arrangements. Although management continues
to pursue these plans, there is no assurance that the Company will be successful
in obtaining sufficient financing on commercially reasonable terms. Management
believes that its anticipated cash flows, including receipt of funding from
government contracts and grants, are sufficient to support its operations
through the second quarter of 2006 and that sufficient cash flows will be
available to meet the Company's business objectives. In the event that
sufficient funds are not available, the Company will need to postpone or
discontinue some or all of its planned operations and projects. Continuance of
the Company as a going concern is dependent upon, among other things, the
success of the Company's research and development programs and the Company's
ability to obtain adequate financing. The financial statements do not include
any adjustments relating to the recoverability of the carrying amount of
recorded assets and liabilities that might result from the outcome of these
uncertainties.
2. Significant Accounting Policies
Use of Estimates
The financial statements and related disclosures are prepared in conformity with
accounting principles generally accepted in the United States of America.
Management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements and revenue and expenses
during the period reported. These estimates include the realization of deferred
tax assets, useful lives and impairment of tangible and intangible assets, and
the value of options and warrants granted by the Company. Estimates and
assumptions are reviewed periodically and the effects of revisions are reflected
in the financial statements in the period they are determined to be necessary.
Actual results could differ from these estimates.
Cash and cash equivalents
Cash and cash equivalents consist of short term, highly liquid investments, with
original maturities of less than three months when purchased and are stated at
cost. Interest income is accrued as earned.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation.
Depreciation is provided on the straight-line method over the estimated useful
lives of the various asset classes. Estimated lives are 5 years for laboratory
equipment; 3 years for computer equipment; 7 years for furniture and fixtures;
and the shorter of the estimated lives or the life of the lease for leasehold
improvements. Maintenance, repairs and minor replacements are charged to expense
as incurred. Upon retirement or disposal of assets, the cost and related
accumulated depreciation are removed from the Balance Sheet and any gain or loss
is reflected in the Statement of Operations.
Revenue Recognition
The Company recognizes revenue from contract research and development and
research payments in accordance with SEC Staff Accounting Bulletin No. 104,
Revenue Recognition, ("SAB 104"). In accordance with SAB 104, revenue is
recognized when persuasive evidence of an arrangement exists, delivery has
occurred, the fee is fixed or determinable, collectibility is reasonably
assured, contractual obligations have been satisfied and title and risk of loss
have been transferred to the customer. The Company recognizes revenue from
non-refundable up-front payments, not tied to
5
achieving a specific performance milestone, over the period which the Company is
obligated to perform services or based on the percentage of costs incurred to
date, estimated costs to complete and total expected contract revenue. Payments
for development activities are recognized as revenue as earned, over the period
of effort. Substantive at-risk milestone payments, which are based on achieving
a specific performance milestone, are recognized as revenue when the milestone
is achieved and the related payment is due, providing there is no future service
obligation associated with that milestone. In situations where the Company
receives payment in advance of the performance of services, such amounts are
deferred and recognized as revenue as the related services are performed.
For the three month periods ended June 30, 2005 and 2004, revenues from National
Institute of Health ("NIH") Small Business Innovation Research ("SBIR") grants
approximated 95% and 61%, respectively, of total revenues recognized by the
Company. For the six month periods ended June 30, 2005 and 2004, revenues from
NIH SBIR grants approximated 94% and 55%, respectively, of total revenues
recognized by the Company.
Accounts Receivable
Accounts receivable are recorded net of provisions for doubtful accounts. An
allowance for doubtful accounts is based on specific analysis of the
receivables. At June 30, 2005 and December 31, 2004 the Company had no allowance
for doubtful accounts.
Research and development
Research and development expenses include costs directly attributable to the
conduct of research and development programs, including employee related costs,
materials, supplies, depreciation on and maintenance of research equipment, the
cost of services provided by outside contractors, and facility costs, such as
rent, utilities, and general support services. All costs associated with
research and development are expensed as incurred. Costs related to the
acquisition of technology rights, for which development work is still in
process, and that have no alternative future uses, are expensed as incurred.
Goodwill
Goodwill is recorded when the purchase price paid for an acquisition exceeds the
estimated fair value of the net identified tangible and intangible assets
acquired.
The Company performs an annual review in the fourth quarter of each year, or
more frequently if indicators of potential impairment exist, to determine if the
carrying value of the recorded goodwill is impaired. Goodwill impairment is
determined using a two-step approach in accordance with Statement of Financial
Accounting Standards No. 142 "Goodwill and Other Intangible Assets" ("SFAS
142"). The impairment review process compares the fair value of the reporting
unit in which goodwill resides to its carrying value.
Identified Intangible Assets
Acquisition-related intangible assets include acquired technology, customer
contracts, grants and covenants not to compete, and are amortized on a straight
line basis over periods ranging from 3.5 to 4 years.
In accordance with Statement of Financial Accounting Standards No. 144
"Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"),
the Company performs a review of its identified intangible assets to determine
if facts and circumstances exist which indicate that the useful life is shorter
than originally estimated or that the carrying amount of assets may not be
recoverable. If such facts and circumstances do exist, the Company assesses the
recoverability of identified intangible assets by comparing the projected
undiscounted net cash flows associated with the related asset or group of assets
over their remaining lives against their respective carrying amounts.
Impairment, if any, is based on the excess of the carrying amount over the fair
value of those assets. Changes in events or circumstances that may affect
long-lived assets include, but are not limited to, cancellations or terminations
of research contracts or pending government grants.
Income taxes
Income taxes are accounted for under the asset and liability method prescribed
by Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes." Deferred income taxes are recorded for temporary differences between
financial statement carrying amounts and the tax basis of assets and
liabilities. Deferred tax assets and liabilities reflect the tax rates expected
to be in effect for the years in which the differences are expected to reverse.
A valuation allowance is provided if it is more likely than not that some or all
of the deferred tax asset will not be realized.
6
Net loss per common share
The Company computes, presents and discloses earnings per share in accordance
with SFAS 128 "Earnings Per Share" ("EPS") which specifies the computation,
presentation and disclosure requirements for earnings per share of entities with
publicly held common stock or potential common stock. The statement defines two
earnings per share calculations, basic and diluted. The objective of basic EPS
is to measure the performance of an entity over the reporting period by dividing
income (loss) by the weighted average shares outstanding. The objective of
diluted EPS is consistent with that of basic EPS, that is to measure the
performance of an entity over the reporting period, while giving effect to all
dilutive potential common shares that were outstanding during the period. The
calculation of diluted EPS is similar to basic EPS except the denominator is
increased for the conversion of potential common shares.
The Company incurred losses for the six months ended June 30, 2005 and June 30,
2004 and as a result, certain equity instruments are excluded from the
calculation of diluted loss per share. At June 30, 2005 and 2004, 68,038 shares
of the Company's Series A convertible preferred stock have been excluded from
the computation of diluted loss per share as they are anti-dilutive. At June 30,
2005 and 2004, outstanding options to purchase 9,652,061 and 6,460,811 shares,
respectively, of the Company's common stock with exercise prices ranging from
$1.00 to $5.50 have been excluded from the computation of diluted loss per share
as they are anti-dilutive. At June 30, 2005 and 2004, outstanding warrants to
purchase 8,469,594 and 8,619,594 shares, respectively, of the Company's common
stock, with exercise prices ranging from $1.00 to $3.63 have been excluded from
the computation of diluted loss per share as they are anti-dilutive.
Fair value of financial instruments
The carrying value of cash and cash equivalents, accounts payable and accrued
expenses approximates fair value due to the relatively short maturity of these
instruments.
Concentration of credit risk
The Company has cash in bank accounts that exceed the Federal Deposit Insurance
Corporation insured limits. The Company has not experienced any losses on its
cash accounts. No allowance has been provided for potential credit losses
because management believes that any such losses would be minimal.
Stock compensation
The Company applies the recognition and measurement principles of Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB 25") and related interpretations in accounting for its stock-based
compensation program. Accordingly, employees' and directors' related
compensation expense is recognized only to the extent of the intrinsic value of
the compensatory options or shares granted.
The following table illustrates the effect on net income (loss) available to
common stockholders and earnings (loss) per share as if the Company had applied
the fair value recognition provisions of SFAS No. 123, "Accounting for
Stock-Based Compensation" ("SFAS 123"), as amended by SFAS 148, "Accounting for
Stock-Based Compensation - Transaction and Disclosure, an amendment to FASB
Statement No. 123."
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
----------- ----------- ----------- -----------
Net loss, as reported ....................................... ($1,630,447) ($2,489,635) ($2,737,872) ($4,429,203)
=========== =========== =========== ===========
Add: Stock-based employee compensation expense
recorded under APB No. 25 ................................... -- -- -- --
Deduct: Total stock-based employee compensation
expense determined under fair value based method for
all awards, net of related tax effects ...................... (240,907) (169,653) (452,043) (267,803)
----------- ----------- ----------- -----------
Pro forma net loss applicable to common shareholders ........ ($1,871,354) ($2,659,288) ($3,189,915) ($4,697,006)
=========== =========== =========== ===========
Net loss per share:
Basic and diluted -as reported .............................. $ (0.07) $ (0.11) $ (0.11) $ (0.19)
=========== =========== =========== ===========
Basic and diluted -pro forma ................................ $ (0.08) $ (0.11) $ (0.13) $ (0.20)
=========== =========== =========== ===========
During the three months ended June 30, 2005 the Company granted each of its
non-employee directors their annual award of 10,000 options under the Company's
Amended and Restated 1996 Incentive and Non-Qualified Option Plan.
7
The options were granted on June 2, 2005, with an exercise price of $1.22 per
share, the price of the Company's common shares as of the Company's 2005 annual
meeting. The difference between the exercise price and the fair market value of
the Company's common shares on the date of the grant resulted in non-cash
compensation expense of $11,700. No options were awarded by the Company during
the six months ended June 30, 2004.
Segment information
The Company is managed and operated as one business. The entire business is
managed by a single management team that reports to the Chief Executive Officer.
The Company does not operate separate lines of business or separate business
entities with respect to any of its product candidates. Accordingly, the Company
does not prepare discrete financial information with respect to separate product
areas or by location and only has one reportable segment as defined by SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information".
3. Intangible Assets
Amortization expense recorded for the six months ended June 30, 2005 and 2004
was as follows:
Six Months Ended
June 30,
2005 2004
------------ ------------
Amortization of acquired grants $ 490,673 $ --
Amortization of customer contract and grants 16,714 72,630
Amortization of covenants not to compete 84,167 95,972
Amortization of acquired technology 41,310 109,550
------------ ------------
$ 632,864 $ 278,152
============ ============
4. Stockholders' Equity
At June 30, 2005, the Company's authorized share capital consisted of 60,000,000
shares, of which 50,000,000 are designated common shares and 10,000,000 are
designated preferred shares. The Company's Board of Directors is authorized to
issue preferred shares in series with rights, privileges and qualifications of
each series determined by the Board.
Holders of the Series A Convertible Preferred Stock are entitled to (i)
cumulative dividends at an annual rate of 6% payable when and if declared by the
Company's board of directors; (ii) in the event of liquidation of the Company,
each holder is entitled to receive $1.4375 per share (subject to certain
adjustments) plus all accrued but unpaid dividends; (iii) convert each share of
Series A to a number of fully paid and non-assessable shares of common stock as
calculated by dividing $1.4375 by the Series A Conversion Price (shall initially
be $1.4375); and (iv) vote with the holders of other classes of shares on an
as-converted basis.
5. Related Parties
During the first six months of 2005, the Company incurred costs of $238,600
related to work performed by Transtech Pharma, Inc., a related party, and its
affiliates in connection with one of the Company's lead product programs. On
June 30, 2005, the Company's outstanding payables included $218,600 payable to
the related party and its affiliates.
6. Note Payable
On May 20, 2005, the Company borrowed approximately $276,000 under a Promissory
Note payable to General Electric Capital Corporation. The note is payable in 36
monthly installments of principal and interest of 10.31% per annum. The note is
secured by a master security agreement dated as of April 29, 2005 and by
specific property listed under the master security agreement.
8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion should be read in conjunction with our financial
statements and notes to those statements and other financial information
appearing elsewhere in this Quarterly Report. In addition to historical
information, the following discussion and other parts of this Quarterly Report
contain forward-looking information that involves risks and uncertainties.
Overview
Since our inception in December 1995, we have been principally engaged in
the research and development of novel products for the prevention and treatment
of serious infectious diseases, including products for use in the defense
against biological warfare agents such as Smallpox and Arenaviruses. The effort
to develop a drug for Smallpox is being aided by SBIR grants from the NIH
totaling approximately $5.8 million that were awarded in the third quarter of
2004 and a $1.6 million contract with the U.S. Army which began in January 2003.
The Arenavirus program is being supported by SBIR grants from the NIH totaling
approximately $6.3 million that were awarded in the third quarter of 2004.
Our anti-viral programs are designed to prevent or limit the replication
of the viral pathogen. Our anti-infectives programs are aimed at the
increasingly serious problem of drug resistance. These programs are designed to
block the ability of bacteria to attach to human tissue, the first step in the
infection process. We are also developing a technology for the mucosal delivery
of our vaccines which may allow the 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.
We do not have commercial biomedical products, and we do not expect to
have such products for one to three years, if at all. We believe that we will
need additional funds to complete the development of our biomedical products.
Our plans with regard to these matters include continued development of our
products as well as seeking additional research support funds and financial
arrangements. Although we continue to pursue these plans, there is no assurance
that we will be successful in obtaining sufficient financing on terms acceptable
to us. The financial statements do not include any adjustments that might result
from the outcome of these uncertainties.
Our biotechnology operations are run out of our research facility in
Corvallis, Oregon. We continue to seek to fund a major portion of our ongoing
antiviral, antibiotic and vaccine programs through a combination of government
contracts and grants and strategic alliances. While we have had success in
obtaining strategic alliances, contract and grants, no assurance can be given
that we will continue to be successful in obtaining funds from these sources.
Until additional relationships are established, we expect to continue to incur
significant research and development costs and costs associated with the
manufacturing of product for use in clinical trials and pre-clinical testing. It
is expected that general and administrative costs, including patent and
regulatory costs, necessary to support clinical trials and research and
development will continue to be significant in the future.
To date, we have not marketed, or generated revenues from the commercial
sale of any products. Our biopharmaceutical product candidates are not expected
to be commercially available for one to three years, if at all. Accordingly, we
expect to incur operating losses for the foreseeable future. There can be no
assurance that we will ever achieve profitable operations.
Critical Accounting Estimates
The methods, estimates and judgments we use in applying our accounting
policies have a significant impact on the results we report in our financial
statements, which we discuss under the heading "Results of Operations" following
this section of our MD&A. Some of our accounting policies require us to make
difficult and subjective judgments, often as a result of the need to make
estimates of matters that are inherently uncertain. Our most critical accounting
estimates include the assessment of recoverability of goodwill, which impacts
goodwill impairments; assessment of recoverability of long-lived assets, which
primarily impacts operating income when we impair intangible assets. Below, we
discuss these policies further, as well as the estimates and judgments involved.
We also have other policies that we consider key accounting policies, such as
for revenue recognition; however, these policies do not require us to make
estimates or judgments that are difficult or subjective.
9
Revenue Recognition
The Company recognizes revenue from contract research and development and
research progress payments in accordance with SEC Staff Accounting Bulletin No.
104, Revenue Recognition, ("SAB 104"). In accordance with SAB 104, revenue is
recognized when persuasive evidence of an arrangement exists, delivery has
occurred, the fee is fixed or determinable, collectibility is reasonably
assured, contractual obligations have been satisfied and title and risk of loss
have been transferred to the customer. The Company recognizes revenue from
non-refundable up-front payments, not tied to achieving a specific performance
milestone, over the period which the Company is obligated to perform services or
based on the percentage of costs incurred to date, estimated costs to complete
and total expected contract revenue. Payments for development activities are
recognized as revenue is earned, over the period of effort. Substantive at-risk
milestone payments, which are based on achieving a specific performance
milestone, are recognized as revenue when the milestone is achieved and the
related payment is due, providing there is no future service obligation
associated with that milestone. In situations where the Company receives payment
in advance of the performance of services, such amounts are deferred and
recognized as revenue as the related services are performed.
Goodwill
Goodwill is recorded when the purchase price paid for an acquisition
exceeds the estimated fair value of the net identified tangible and intangible
assets acquired.
The Company performs an annual review in the fourth quarter of each year,
or more frequently if indicators of potential impairment exist, to determine if
the carrying value of the recorded goodwill is impaired. Goodwill impairment is
determined using a two-step approach in accordance with Statement of Financial
Accounting Standards No. 142 "Goodwill and Other Intangible Assets" ("SFAS
142"). The impairment review process compares the fair value of the reporting
unit in which goodwill resides to its carrying value. In 2004, the Company
operated as one business and one reporting unit. Therefore, the goodwill
impairment analysis was performed on the basis of the Company as a whole using
the market capitalization of the Company as an estimate of its fair value. The
estimated fair values might produce significantly different results if other
reasonable assumptions and estimates were to be used.
Identified Intangible Assets
Acquisition-related intangibles include acquired technology, customer
contracts, grants and covenants not to compete, and are amortized on a straight
line basis over periods ranging from 3.5-4 years.
In accordance with Statement of Financial Accounting Standards No. 144
"Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"),
the Company performs a review of its identified intangible assets to determine
if facts and circumstances exist which indicate that the useful life is shorter
than originally estimated or that the carrying amount of assets may not be
recoverable. If such facts and circumstances do exist, the Company assesses the
recoverability of identified intangible assets by comparing the projected
undiscounted net cash flows associated with the related asset or group of assets
over their remaining lives against their respective carrying amounts.
Impairment, if any, is based on the excess of the carrying amount over the fair
value of those assets.
10
Contractual Obligations, Commercial Commitments and Purchase Obligations
As of June 30, 2005, our purchase obligations are not material. We lease
certain facilities and office space under operating leases. Minimum future
rental commitments under operating leases having non-cancelable lease terms in
excess of one year are as follows:
Year ended December 31,
2005 $ 239,700
2006 255,400
2007 261,800
2008 133,200
2009 135,900
2010 22,700
--------------
Total $ 1,048,700
==============
Results of Operations
Three months ended June 30, 2005 and June 30, 2004
Revenues from grants and research and development contracts were
approximately $1.9 million for the three months ended June 30, 2005, compared to
$299,000 for the three months ended June 30, 2004. The increase relates to the
award of two Phase I and two Phase II SBIR grants by the NIH during the third
quarter of 2004. The Phase II grants are for a two year period ending in the
third quarter of 2006. The total award for these grants was approximately $12.1
million. For the three months ended June 30, 2005 we recorded revenues of $1.7
million from these grants. We also received a one year SBIR grant from the NIH
for $252,000 in August 2004 to support our Strep vaccine program. For the three
months ended June 30, 2005 we recorded revenue of $60,600 from this grant.
Revenue from our contract with the U.S. Army approximated $94,100 for the three
month period ending June 30, 2005; compared to $92,600 for the same period in
2004. During the three months ending June 30, 2004 we recognized revenue of
$182,000 from an SBIR grant that ended in the second quarter of 2004 for our
DegP anti infective.
Selling, general and administrative expenses ("SG&A") for the three months
ended June 30, 2005 and 2004 approximated $811,000 and $1.1 million,
respectively. The decline of $300,000 or 27% is mainly attributed to a decline
of $99,000 in legal fees, a decline of $112,000 in payroll expenses and a
decline of $106,300 in consulting fees. Higher legal fees during the three
months ending June 30, 2004 were due to the review and amendment of our
corporate governance policies and procedures to ensure compliance with Sarbanes
Oxley and NASDAQ requirements. Legal expenses in the second quarter of 2004 were
also incurred in connection with the sale of certain non-core vaccine assets and
a legal action that the Company initiated against a former founder. The decline
in payroll expenses relates to severance payment of approximately $270,000 made
in May 2004 in connection with the termination of our former Presidents'
employment agreement. The decline in payroll expenses for the three months was
partially offset by the addition of a Chief Executive Officer and a Vice
President of Business Development during the third quarter of 2004. Higher
consulting expenses during the three months ended June 30, 2004 were incurred in
connection with our efforts to secure certain government contracts.
Research and development expenses were $2.6 million for the three months
ended June 30, 2005; an increase of approximately 152% from the $1.0 million of
expenses incurred for the three months ended June 30, 2004. Approximately $1.4
million of the increase related to preclinical development work in connection
with our lead product programs. Amortization of intangible assets in the amount
of $274,000 and $87,000 for the three months ended June 30, 2005 and 2004,
respectively, represented approximately 12% of the increase.
Patent preparation expenses for the three months ended June 30, 2005 were
$91,000 compared to $55,000 for the three months ended June 30, 2004. The 60%
increase is the result of increased costs arising from the Plexus Vaccine Inc.
and ViroPharma Incorporated asset acquisitions.
11
Loss on impairment of intangible assets of $610,000 was recorded in the
three months ended June 30, 2004. In May 2004, we sold intangible assets from
our immunological bioinformatics technology and certain non-core vaccine
development assets to a privately-held company, Pecos Labs, Inc. ("Pecos") in
exchange for 150,000 shares of Pecos' common stock. In addition, concurrent with
the asset transfer, we terminated our employment agreement with our former
President and reduced the covenants not to compete with the former President to
one year from the date of termination. As a result of that transaction, we
performed an impairment review of our intangible assets in accordance with SFAS
144 and recorded an impairment charge of $610,000. The impairment of intangible
assets consists of $307,000 of impairment related to grants transferred to Pecos
and $303,000 of impairment related to the reduction in the covenants not to
compete to one year from the date of terminating the Presidents' employment
agreement with us.
All of our product programs are in the early stage of development. At this
stage of development, we cannot estimate the potential cost for any program to
be completed or the time it will take to complete the project. There is a high
risk of non-completion for any program because of the lead time to program
completion and uncertainty relating to costs. Net cash inflows from any products
developed from these programs is at least one to three years away. However, we
could receive additional grants, contracts or technology licenses in the
short-term. The potential cash and timing is not known and we cannot be certain
if they will ever occur.
The risk of failure to complete any program is high, as each is in the
relatively early stage of development. Products for the biological warfare
defense market, such as the Smallpox anti-viral, could be available for sale in
one to three years. We expect the future research and development cost of this
program to increase as the potential products enter animal studies and safety
testing. Funds for future development will be partially paid for by NIH SBIR
grants, the contract we have with the U.S. Army, additional government funding
and from future financing. If we are unable to obtain additional federal grants
and contracts or funding in the required amounts, the development timeline for
these products would slow or possibly be suspended. Delay or suspension of any
of our programs could have an adverse impact on our ability to raise funds in
the future, enter into collaborations with corporate partners or obtain
additional federal funding from contracts or grants.
Other loss of $9,600 for the three months ended June 30, 2005 comprised of
interest income of approximately $5,400 and loss on impairment of our investment
in Pecos' common stock of $15,000. Other income of $14,800 for the same period
in 2004 comprised of interest income. The decline in interest income is the
result of lower cash balances in the three months ended June 30, 2005 compared
to the prior year period.
Six months ended June 30, 2005 and June 30, 2004
Revenues from grants and research and development contracts were
approximately $3.3 million for the six months ended June 30, 2005, compared to
$460,000 for the six months ended June 30, 2004. The increase relates to the
award of two Phase I and two Phase II SBIR grants by the NIH during the third
quarter of 2004. The Phase II grants are for a two year period ending in the
third quarter of 2006. The total award for these grants was approximately $12.1
million. For the six months ended June 30, 2005 we recorded revenues of $3.0
million from these grants. We also received a one year SBIR grant from the NIH
for $252,000 in August 2004 to support our Strep vaccine program. For the six
months ended June 30, 2005 we recorded revenue of $127,400 from this grant.
Revenue from our contract with the U.S. Army approximated $188,000 for the six
month period ending June 30, 2005; compared to $181,000 for the same period in
2004. During the six months ending June 30, 2004 we recognized revenue of
$255,000 from an SBIR grant for our DegP anti infective that we completed in the
second quarter of 2004.
Selling, general and administrative expenses ("SG&A") for the six months
ended June 30, 2005 and 2004 approximated $1.7 million and $2.1 million,
respectively. The decline of $461,000 or 22% is mainly attributed to a decline
of $307,000 in legal fees, a decline of $75,000 in accounting fees and a decline
of $193,000 in consulting fees. Higher legal fees during the six months ending
June 30, 2004 were due to the review and amendment of our corporate governance
policies and procedures to ensure compliance with Sarbanes Oxley and NASDAQ
requirements. Legal expenses in the first six months of 2004 were also incurred
in connection with the sale of certain non-core vaccine assets and a legal
action that the Company initiated against a former founder. The higher
accounting expenses during the six months period ended June 30, 2004 was mainly
related to the sale of certain non-core vaccine assets and the review of a
potential acquisition. Higher consulting expenses during the six months ended
June 30, 2004 were incurred in connection with our efforts to secure certain
government contracts.
Research and development expenses were $4.1 million for the six months
ended June 30, 2005; an increase of approximately 102% or $2.1 from the $2.0
million of expenses incurred for the six months ended June 30, 2004.
12
Approximately $1.8 million of the increase related to preclinical development
work in connection with our lead product programs. Amortization of intangible
assets in the amount of $549,000 and $183,000 for the six months ended June 30,
2005 and 2004, respectively, represented approximately 18% of the increase.
Patent preparation expenses for the six months ended June 30, 2005 were
$265,600 compared to $146,700 for the six months ended June 30, 2004. The 82%
increase is the result of increased costs arising from the Plexus Vaccine Inc.
and ViroPharma Incorporated asset acquisitions.
Loss on impairment of intangible assets of $610,000 was recorded during
the six months ended June 30, 2004. In May 2004, we sold intangible assets from
our immunological bioinformatics technology and certain non-core vaccine
development assets to a privately-held company, Pecos Labs, Inc. ("Pecos") in
exchange for 150,000 shares of Pecos' common stock. In addition, concurrent with
the asset transfer, we terminated our employment agreement with our former
President and reduced the covenants not to compete with the former President to
one year form the date of termination. As a result of that transaction, we
performed an impairment review of our intangible assets in accordance with SFAS
144 and recorded an impairment charge of $610,000. The impairment of intangible
assets consists of $307,000 of impairment related to grants transferred to Pecos
and $303,000 of impairment related to the reduction in the covenants not to
compete to one year from the date of terminating the former Presidents'
employment agreement with us.
All of our product programs are in the early stage of development. At this
stage of development, we cannot estimate the potential cost for any program to
be completed or the time it will take to complete the project. There is a high
risk of non-completion for any program because of the lead time to program
completion and uncertainty relating to costs. Net cash inflows from any products
developed from these programs is at least one to three years away. However, we
could receive additional grants, contracts or technology licenses in the
short-term. The potential cash and timing is not known and we cannot be certain
if they will ever occur.
The risk of failure to complete any program is high, as each is in the
relatively early stage of development. Products for the biological warfare
defense market, such as the Smallpox anti-viral, could be available for sale in
one to three years. We expect the future research and development cost of this
program to increase as the potential products enter animal studies and safety
testing. Funds for future development will be partially paid for by NIH SBIR
grants, the contract we have with the U.S. Army, additional government funding
and from future financing. If we are unable to obtain additional federal grants
and contracts or funding in the required amounts, the development timeline for
these products would slow or possibly be suspended. Delay or suspension of any
of our programs could have an adverse impact on our ability to raise funds in
the future, enter into collaborations with corporate partners or obtain
additional federal funding from contracts or grants.
Other loss of $4,200 for the six months ended June 30, 2005 comprised of
interest income of approximately $10,800 and loss on impairment of our
investment in Pecos' common stock of $15,000. Other income of $31,200 for the
same period in 2004 was comprised of interest income. The decline in interest
income is the result of lower cash balances in the six months ended June 30,
2005 compared to the prior year period.
Liquidity and Capital Resources
The financial statements of SIGA Technologies have been prepared on a
basis which assumes that the Company will continue as a going concern and which
contemplates the realization of assets and the satisfaction of liabilities and
commitments in the normal course of business.
As of June 30, 2005 we had approximately $689,000 in cash and cash
equivalents. We believe that these funds and our anticipated cash flows,
including receipt of funding from government contracts and grants, will be
sufficient to support our operations through the second quarter of 2006.
We have incurred cumulative net losses and expect to incur additional
losses to perform further research and development activities. We do not have
commercial products and have limited capital resources. Our plans with regard to
these matters include continued development of our products as well as seeking
additional working capital through a combination of collaborative agreements,
strategic alliances, research grants, equity and debt financing. Although we
continue to pursue these plans, there is no assurance that we will be successful
in obtaining sufficient financing on commercially reasonable terms.
Our working capital and capital requirements will depend upon numerous
factors, including pharmaceutical research and development programs;
pre-clinical and clinical testing; timing and cost of obtaining regulatory
approvals; levels of resources that we devote to the development of
manufacturing and marketing capabilities; technological advances; status of
competitors; and our ability to establish collaborative arrangements with other
organizations.
13
Off-Balance Sheet Arrangements
SIGA does not have any off-balance sheet arrangements.
Safe Harbor Statement
This report 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
management's estimates, assumptions and projections, and are subject to
uncertainties, many of which are beyond the control of SIGA. 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 anticipated funding for its development projects or other needed
funding, (d) SIGA may not be able to secure funding from anticipated government
contracts and grants, (e) SIGA may not be able to secure or enforce adequate
legal protection, including patent protection, for its products and (f)
unanticipated internal control deficiencies or weaknesses or ineffective
disclosure controls and procedures. 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 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, 2004, 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. Forward-looking statements speak only as of
the date they are made, and except for our ongoing obligations under the U.S.
federal securities laws, we undertake no obligation to publicly update any
forward-looking statements whether as a result of new information, future events
or otherwise.
14
Item 3. Quantitative and Qualitative Disclosure About Market Risk
None
Item 4. Controls and Procedures
(a) Disclosure Controls and Procedures. The Company's management, with the
participation of the Company's Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness of the Company's disclosure controls
and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act) as of the end of the fiscal period covered by this Quarterly Report on Form
10-Q. Based upon such evaluation, the Chief Executive Officer and Chief
Financial Officer have concluded that, as of the end of such period, the
Company's disclosure controls and procedures are effective.
(b) Internal Control Over Financial Reporting. There have not been any
changes in the Company's internal control over financial reporting (as such term
is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
fiscal period covered by this Quarterly Report on Form 10-Q that have materially
affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.
15
Part II
Other information
Item 1. Legal Proceedings - SIGA is not a party, nor is its property the subject
of, any legal proceedings other than routine litigation incidental to its
business.
Item 2. Changes in Securities and Use of Proceeds and Issuer Purchases of Equity
Securities - None
Item 3. Defaults upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company held its annual meeting of Stockholders on May 12, 2005.
(b) Proxies for the meeting were solicited pursuant to Regulation 14A of
the Securities Exchange Act of 1934, as amended. There was no
solicitation in opposition to management's nominees for the
directors as listed in the definitive proxy statement of the Company
dated May 2, 2005, and all such nominees were elected.
(c) Briefly described below is each matter voted upon at the annual
meeting of Stockholders.
(1) Election of the following individuals to hold office as
Directors of the Company for terms of one year Total common
stock voted was 21,653,369
Number of
Shares Voted For Withheld
------------ ---------- --------
Donald G. Drapkin 21,653,369 20,948,838 704,531
James J. Antal 21,653,369 21,509,389 143,980
Thomas E. Constance 21,653,369 21,456,927 196,442
Bernard L. Kasten, M.D 21,653,369 21,508,189 145,180
Adnan M. Mjalli, Ph.D 21,653,369 21,509,969 143,400
Mehmet C. Oz, M.D 21,653,369 20,951,838 701,531
Eric A. Rose, M.D 21,653,369 21,510,389 142,980
Paul G. Savas 21,653,369 20,950,838 702,531
Judy S. Slotkin 21,653,369 21,509,969 143,400
Michael A. Weiner, M.D 21,653,369 21,456,927 196,442
(2) Ratification and confirmation of the appointment of
PricewaterhouseCoopers LLP as independent registered public
accounting firm of the Company for the fiscal year ending
December 31, 2005. Total common stock voted was 21,621,619 in
favor, 24,250 against and 7,500 abstained.
(3) Approval of the amendment to the SIGA amended and restated
1996 Incentive and Non-Qualified Stock Option Plan (the
"Plan") to increase the maximum number of shares of common
stock available for issuance under the Plan from 10,000,000 to
11,000,000. Total common stock voted was 10,964,286 in favor,
1,317,282 against and 9,500 abstained.
Item 5. Other Information - None
Item 6. Exhibits
* 31.1 Certification of Chief Executive Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
* 31.2 Certification of Chief Financial Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2 Certification of Chief Financial Officer Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
* Filed herewith
16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SIGA Technologies, Inc.
(Registrant)
Date: August 15, 2005 By: /s/ Thomas N. Konatich
-----------------------------
Thomas N. Konatich
Chief Financial Officer
17
Exhibit 31.1
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Bernard L. Kasten, M.D., certify that:
1. I have reviewed this quarterly report on Form 10-Q of SIGA
Technologies, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented
in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and have:
(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under
our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly
during the period in which this quarterly report is being
prepared;
(b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this quarterly report
our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during
the registrant's most recent fiscal quarter that has
materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial
reporting; and
5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing
the equivalent functions);
(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the
registrant's ability to record, process, summarize and report
financial information; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal control over financial reporting.
Date: August 15, 2005 By: /s/ Bernard L. Kasten, M.D.
------------------------------
Bernard L. Kasten, M.D.
Chief Executive Officer
18
Exhibit 31.2
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Thomas N. Konatich, certify that:
1. I have reviewed this quarterly report on Form 10-Q of SIGA
Technologies, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented
in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and have:
(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under
our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly
during the period in which this quarterly report is being
prepared;
(b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this quarterly report
our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during
the registrant's most recent fiscal quarter that has
materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial
reporting; and
5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing
the equivalent functions);
(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the
registrant's ability to record, process, summarize and report
financial information; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal control over financial reporting.
Date: August 15, 2005 By: /s/ Thomas N. Konatich
----------------------
Thomas N. Konatich
Chief Financial Officer
19
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of SIGA Technologies, Inc. (the
"Company") on Form 10-Q for period ending June 30, 2005 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Bernard
L. Kasten, M.D., Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002,
that, to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
August 15, 2005
/s/ Bernard L. Kasten, M.D.
---------------------------
Bernard L. Kasten, M.D.
Chief Executive Officer
20
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of SIGA Technologies, Inc. (the
"Company") on Form 10-Q for the period ending June 30, 2005 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Thomas
N. Konatich., Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002,
that, to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
August 15, 2005
/s/ Thomas N. Konatich
----------------------
Thomas N. Konatich
Chief Financial Officer
21