x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the Quarterly Period Ended June 30, 2018 | |
Or | |
¨ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from ________ to ___________ |
Delaware | 13-3864870 |
(State or other jurisdiction of | (IRS Employer Identification. No.) |
incorporation or organization) | |
31 East 62nd Street | 10065 |
New York, NY | (zip code) |
(Address of principal executive offices) |
Large accelerated filer ¨ | Accelerated filer x | |
Non-accelerated filer ¨ | (Do not check if a smaller reporting company) | Smaller reporting company ¨ |
Emerging growth company ¨ |
Page No. | ||
June 30, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 10,581,112 | $ | 19,857,833 | |||
Restricted cash, short-term | 11,028,824 | 10,701,305 | |||||
Accounts receivable | 2,128,957 | 1,802,107 | |||||
Inventory | 2,908,249 | 2,983,249 | |||||
Deferred costs | 94,339,146 | — | |||||
Prepaid expenses and other current assets | 1,389,933 | 2,019,999 | |||||
Total current assets | 122,376,221 | 37,364,493 | |||||
Property, plant and equipment, net | 132,574 | 138,640 | |||||
Restricted cash, long-term | 1,701,843 | 6,542,448 | |||||
Deferred costs | — | 96,592,334 | |||||
Deferred tax asset, net | 2,441,740 | 2,431,963 | |||||
Goodwill | 898,334 | 898,334 | |||||
Other assets | 789,913 | 702,167 | |||||
Total assets | $ | 128,340,625 | $ | 144,670,379 | |||
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY | |||||||
Current liabilities | |||||||
Accounts payable | $ | 1,412,595 | $ | 1,328,867 | |||
Accrued expenses and other current liabilities | 3,288,437 | 4,226,261 | |||||
Deferred revenue | 376,562,998 | 1,255,318 | |||||
Total current liabilities | 381,264,030 | 6,810,446 | |||||
Deferred revenue | — | 377,641,485 | |||||
Warrant liability | 14,408,991 | 11,466,162 | |||||
Other liabilities | 704,858 | 840,253 | |||||
Long-term debt | 73,280,477 | 71,050,324 | |||||
Total liabilities | 469,658,356 | 467,808,670 | |||||
Commitments and contingencies | |||||||
Stockholders’ deficiency | |||||||
Common stock ($.0001 par value, 600,000,000 shares authorized, 79,160,058 and 79,039,000 issued and outstanding at June 30, 2018, and December 31, 2017, respectively) | 7,916 | 7,904 | |||||
Additional paid-in capital | 214,906,962 | 214,229,581 | |||||
Accumulated deficit | (556,232,609 | ) | (537,375,776 | ) | |||
Total stockholders’ deficiency | (341,317,731 | ) | (323,138,291 | ) | |||
Total liabilities and stockholders’ deficiency | $ | 128,340,625 | $ | 144,670,379 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues | |||||||||||||||
Research and development | $ | 2,661,216 | $ | 4,264,561 | $ | 4,409,150 | $ | 9,466,347 | |||||||
Operating expenses | |||||||||||||||
Selling, general and administrative | 2,880,394 | 3,058,244 | 5,936,940 | 5,928,113 | |||||||||||
Research and development | 3,312,181 | 5,067,838 | 6,320,007 | 11,428,327 | |||||||||||
Patent expenses | 178,332 | 197,017 | 396,805 | 437,615 | |||||||||||
Total operating expenses | 6,370,907 | 8,323,099 | 12,653,752 | 17,794,055 | |||||||||||
Operating loss | (3,709,691 | ) | (4,058,538 | ) | (8,244,602 | ) | (8,327,708 | ) | |||||||
Gain (loss) from change in fair value of warrant liability | 360,285 | 294,356 | (2,942,829 | ) | (331,853 | ) | |||||||||
Interest expense | (3,843,161 | ) | (3,652,496 | ) | (7,591,979 | ) | (7,261,412 | ) | |||||||
Other income, net | 144,152 | 8,066 | 146,387 | 12,484 | |||||||||||
Loss before income taxes | (7,048,415 | ) | (7,408,612 | ) | (18,633,023 | ) | (15,908,489 | ) | |||||||
Provision for income taxes | (2,849 | ) | (92,825 | ) | (497 | ) | (207,895 | ) | |||||||
Net and comprehensive loss | $ | (7,051,264 | ) | $ | (7,501,437 | ) | $ | (18,633,520 | ) | $ | (16,116,384 | ) | |||
Loss per share: basic and diluted | $ | (0.09 | ) | $ | (0.10 | ) | $ | (0.24 | ) | $ | (0.20 | ) | |||
Weighted average shares outstanding: basic and diluted | 79,094,230 | 78,840,312 | 79,066,768 | 78,808,903 |
Six months ended June 30, | ||||||||
2018 | 2017 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (18,633,520 | ) | $ | (16,116,384 | ) | ||
Adjustments to reconcile net loss to net cash (used in) operating activities: | ||||||||
Depreciation and other amortization | 33,929 | 75,837 | ||||||
Increase in fair value of warrant liability | 2,942,829 | 331,853 | ||||||
Stock-based compensation | 689,721 | 373,492 | ||||||
Deferred income taxes (benefit) provision | (9,777 | ) | 21,190 | |||||
Write down of inventory | — | 536,000 | ||||||
Non-cash interest expense | 2,230,153 | 2,230,154 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (219,547 | ) | 1,385,389 | |||||
Inventory | — | 10,257,156 | ||||||
Deferred costs | 54,776 | (10,540,755 | ) | |||||
Prepaid expenses and other current assets | 705,066 | 382,780 | ||||||
Accounts payable, accrued expenses and other current liabilities | (854,097 | ) | (528,807 | ) | ||||
Deferred revenue | (553,755 | ) | 8,996,221 | |||||
Other liabilities | (135,395 | ) | (9,666 | ) | ||||
Net cash (used in) operating activities | (13,749,617 | ) | (2,605,540 | ) | ||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (27,863 | ) | (39,326 | ) | ||||
Net cash (used in) investing activities | (27,863 | ) | (39,326 | ) | ||||
Cash flows from financing activities: | ||||||||
Net proceeds from exercise of stock options | — | 27,497 | ||||||
Buy back of stock options | — | (84,000 | ) | |||||
Payment of employee tax obligations for common stock tendered | (12,327 | ) | (193,052 | ) | ||||
Net cash (used in) financing activities | (12,327 | ) | (249,555 | ) | ||||
Net decrease in cash and cash equivalents | (13,789,807 | ) | (2,894,421 | ) | ||||
Cash, cash equivalents and restricted cash at the beginning of period | 37,101,586 | 56,174,046 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 23,311,779 | $ | 53,279,625 |
As of June 30, 2018 | |||||
Balance at December 31, 2017 | $ | 378,896,803 | |||
Cumulative effect of accounting change | (1,780,050 | ) | |||
Billings in advance of revenue recognized | 186,526 | ||||
Revenue recognized | (740,281 | ) | |||
Balance at June 30, 2018 | $ | 376,562,998 |
As of | ||||||||
June 30, 2018 | December 31, 2017 | |||||||
Cash and cash equivalents | $ | 10,581,112 | $ | 19,857,833 | ||||
Restricted cash - short-term | 11,028,824 | 10,701,305 | ||||||
Restricted cash - long-term | 1,701,843 | 6,542,448 | ||||||
Cash, cash equivalents and restricted cash | $ | 23,311,779 | $ | 37,101,586 | ||||
June 30, 2017 | December 31, 2016 | |||||||
Cash and cash equivalents | $ | 30,865,937 | $ | 28,701,824 | ||||
Restricted cash - short-term | 10,322,289 | 10,138,890 | ||||||
Restricted cash - long-term | 12,091,399 | 17,333,332 | ||||||
Cash, cash equivalents and restricted cash | $ | 53,279,625 | $ | 56,174,046 |
As of | ||||||
June 30, 2018 | December 31, 2017 | |||||
Work in-process | $ | 1,950,445 | 2,025,445 | |||
Finished goods | 957,804 | 957,804 | ||||
Inventory | $ | 2,908,249 | 2,983,249 |
As of | |||||||
June 30, 2018 | December 31, 2017 | ||||||
Leasehold improvements | $ | 2,420,028 | $ | 2,420,028 | |||
Computer equipment | 718,241 | 701,762 | |||||
Furniture and fixtures | 363,588 | 363,588 | |||||
3,501,857 | 3,485,378 | ||||||
Less - accumulated depreciation | (3,369,283 | ) | (3,346,738 | ) | |||
Property, plant and equipment, net | $ | 132,574 | $ | 138,640 |
As of | |||||||
June 30, 2018 | December 31, 2017 | ||||||
Bonus | $ | 893,888 | $ | 2,538,340 | |||
Accrued interest | 936,695 | 87,955 | |||||
Professional fees | 372,204 | 381,980 | |||||
Vacation | 393,214 | 328,588 | |||||
Other (primarily R&D vendors and CMOs) | 692,436 | 889,398 | |||||
Accrued expenses and other current liabilities | $ | 3,288,437 | $ | 4,226,261 |
• | Level 1 – Quoted prices for identical instruments in active markets. |
• | Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations where inputs are observable or where significant value drivers are observable. |
• | Level 3 – Instruments where significant value drivers are unobservable to third parties. |
Fair Value Measurements of Level 3 liability classified warrant | |||
Warrant liability at December 31, 2017 | $ | 11,466,162 | |
Increase in fair value of warrant liability | 2,942,829 | ||
Warrant liability at June 30, 2018 | $ | 14,408,991 |
Three months ended June 30, | Six months ended June 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Stock Options | 1,038,071 | 1,541,472 | 1,050,202 | 1,625,254 | |||||||
Stock-Settled Stock Appreciation Rights | 160,939 | 360,031 | 161,662 | 360,031 | |||||||
Restricted Stock Units | 1,473,155 | (1) | 1,332,817 | 1,472,581 | 1,320,211 | ||||||
Warrants | 2,690,950 | 2,690,950 | 2,690,950 | 2,690,950 |
Lease Termination liability | |||
Balance at December 31, 2017 | $ | 814,622 | |
Charges (included in selling, general and administrative expenses) | 7,534 | ||
Cash payments, net of sublease income | (156,305 | ) | |
Balance at June 30, 2018 | $ | 665,851 |
Exhibit No. | Description | |
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
Second Amendment to Credit Agreement dated June 25, 2018 | ||
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |
101.LAB | XBRL Taxonomy Extension Label Linkbase | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
SIGA TECHNOLOGIES, INC. | ||||
(Registrant) | ||||
Date: | August 7, 2018 | By: | /s/ Daniel J. Luckshire | |
Daniel J. Luckshire | ||||
Executive Vice President and | ||||
Chief Financial Officer | ||||
(Principal Financial Officer and | ||||
Principal Accounting Officer) |
By: /s/ Daniel J. Luckshire _____ | ||
Name: Daniel J. Luckshire | ||
Title: Executive Vice President and Chief Financial Officer | ||
By: /s/ Emily Ergang Pappas_____ | ||
Name: Emily Ergang Pappas | ||
Title: Associate Counsel _______________________ |
By: Oaktree Fund GP IIA, LLC Its: Manager By: Oaktree Fund GP II, L.P. Its: Managing Member By: /s/ Nilay Mehta___ Name: Nilay Mehta Title: Authorized Signatory By: /s/ Edgar Lee | ||
Name: Edgar Lee | ||
Title: Authorized Signatory | ||
1. | I have reviewed this quarterly report on Form 10-Q of SIGA Technologies, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 7, 2018 |
/s/ Phillip L. Gomez, Ph.D. |
Phillip L. Gomez, Ph.D. |
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of SIGA Technologies, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 7, 2018 |
/s/ Daniel J. Luckshire |
Daniel J. Luckshire |
Executive Vice President and Chief Financial Officer |
(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. |
/s/ Phillip L. Gomez, Ph.D. |
Phillip L. Gomez, Ph.D. |
Chief Executive Officer |
August 7, 2018 |
(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. |
/s/ Daniel J. Luckshire |
Daniel J. Luckshire |
Executive Vice President and Chief Financial Officer |
August 7, 2018 |
Document and Entity Information Document - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jul. 27, 2018 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | SIGA TECHNOLOGIES INC | |
Entity Central Index Key | 0001010086 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | SIGAQ | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 79,160,058 |
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Balance Sheet Parenthetical [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 79,160,058 | 79,160,058 |
Common stock, shares outstanding | 79,160,058 | 79,160,058 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Revenues | ||||
Research and development | $ 2,661,216 | $ 4,264,561 | $ 4,409,150 | $ 9,466,347 |
Operating expenses | ||||
Selling, general and administrative | 2,880,394 | 3,058,244 | 5,936,940 | 5,928,113 |
Research and development | 3,312,181 | 5,067,838 | 6,320,007 | 11,428,327 |
Patent expenses | 178,332 | 197,017 | 396,805 | 437,615 |
Total operating expenses | 6,370,907 | 8,323,099 | 12,653,752 | 17,794,055 |
Operating loss | (3,709,691) | (4,058,538) | (8,244,602) | (8,327,708) |
Decrease In Fair Value Of Warrants | 360,285 | 294,356 | (2,942,829) | (331,853) |
Interest expense | (3,843,161) | (3,652,496) | (7,591,979) | (7,261,412) |
Gain (loss) from change in fair value of warrant liability | (400,000) | (300,000) | (2,942,829) | (331,853) |
Other income, net | 144,152 | 8,066 | 146,387 | 12,484 |
Loss before income taxes | (7,048,415) | (7,408,612) | (18,633,023) | (15,908,489) |
Current Income Tax Expense (Benefit) | (2,849) | (497) | ||
Provision for income taxes | (92,825) | (207,895) | ||
Net and comprehensive loss | $ (7,051,264) | $ (7,501,437) | $ (18,633,520) | $ (16,116,384) |
Loss per share: basic and diluted | $ (0.09) | $ (0.10) | $ (0.24) | $ (0.20) |
Weighted average shares outstanding: basic and diluted | 79,094,230 | 78,840,312 | 79,066,768 | 78,808,903 |
Condensed Consolidated Financial Statements |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed Consolidated Financial Statements | Condensed Consolidated Financial Statements The financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for quarterly reports on Form 10-Q and should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended December 31, 2017, included in the 2017 Annual Report on Form 10-K. All terms used but not defined elsewhere herein have the meaning ascribed to them in the Company’s 2017 Annual Report on Form 10-K filed on March 6, 2018. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair statement of the results of the interim periods presented have been included. The 2017 year-end condensed balance sheet data was derived from the audited financial statements but does not include all disclosures required by U.S. GAAP. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results expected for the full year. Liquidity The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. On July 13, 2018, the United States Food & Drug Administration (“FDA”) approved the Company’s orally-administered drug TPOXX® (“oral TPOXX®”) for the treatment of smallpox. There is no difference between the approved product and courses of oral TPOXX® that have been delivered to the U.S. Strategic National Stockpile (“Strategic Stockpile”). As such, the Company received $41 million that previously had been held back under the U.S. Biomedical Advanced Research and Development Authority (“BARDA”) Contract (see Note 3). Accordingly, management believes, based on currently forecasted operating costs that the Company will continue as a going concern for more than one year from the issuance date of these financial statements. Additionally, the Company invoiced BARDA for $50 million on July 31, 2018 and payment is due in August for a modification made to the BARDA Contract, in which BARDA exercised its option for a $50 million payment to the Company relating to FDA approval of 84-month expiry for oral TPOXX®. Priority Review Voucher Concurrent with the approval of oral TPOXX®, FDA granted the Company's request for a Priority Review Voucher (“PRV”). A PRV is a voucher that may be used to obtain an accelerated FDA review of future SIGA products or sold to a third party to obtain accelerated review of one of its future products. |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Revenue All of the Company’s revenue is derived from long-term contracts that span multiple years. The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Adoption of ASC 606. On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historical accounting under ASC 605, Revenue Recognition. The cumulative impact of adopting ASC 606 as of January 1, 2018 was a decrease to deferred revenue of approximately $1.8 million; a decrease to deferred costs of approximately $2.1 million; an increase to receivables of approximately $0.1 million and a net increase to opening accumulated deficit of $0.2 million, net of tax. For the three and six months ended June 30, 2018, the impact to revenues as a result of applying ASC 606 was an increase of approximately $0.1 million and $0.3 million, respectively. Performance Obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s research and development contract for the intravenous (IV) formulation of TPOXX® (“IV TPOXX®”) (see “IV Formulation R&D Contract” in Note 3) has a single performance obligation (research and development); individual services within the contract are not separately identifiable from other promises in the contract and, therefore, are not distinct from each other. The Company’s BARDA Contract has three performance obligations: one relates to the manufacture and delivery of product (and performance of services in connection with the manufacture and delivery of product), and the other two performance obligations relate to research and development in connection with oral TPOXX®. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using its best estimate of the standalone selling price of each distinct good or service in the contract. Contract modifications may occur during the course of performance of our contracts. Contracts are often modified to account for changes in contract specifications or requirements. In most instances, contract modifications are for services that are not distinct, and, therefore, are accounted for as part of the existing contract. The Company’s performance obligations are satisfied over time as work progresses or at a point in time. Substantially all of the Company’s revenue related to research and development performance obligations is recognized over time, because control transfers continuously to our customers. Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying the Company’s performance obligations. Incurred cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, material, overhead, and third-party services. Revenue connected with courses of oral TPOXX® delivered to the strategic stockpile and related services, milestones and advance payments (activities in combination that constitute one performance obligation) will be recognized at a point in time. Revenue associated with this performance obligation will be recognized when BARDA obtains control of the asset, which is upon delivery to and acceptance by the customer and at the point in time when the constraint on the consideration is resolved. The consideration, which is variable consideration, was constrained until the FDA approved oral TPOXX® for the treatment of smallpox on July 13, 2018. Prior to FDA approval, consideration had been constrained because the Replacement Obligation (as defined herein) had not been quantified or specified. With FDA approval, the replacement obligation has been quantified and specified as immaterial since there is no difference between the approved product and the courses of oral TPOXX® that have already been delivered to the strategic stockpile. Contract Estimates. Accounting for long-term contracts and grants involves the use of various techniques to estimate total contract revenue and costs. Contract estimates are based on various assumptions to project the outcome of future events that often span multiple years. These assumptions include labor productivity; the complexity of the work to be performed; external factors such as customer behavior and potential regulatory outcomes; and the performance of subcontractors, among other variables. The nature of the work required to be performed on many of the Company’s performance obligations and the estimation of total revenue and cost at completion is complex, subject to many variables and requires significant judgment. The consideration associated with manufacture and delivery of product as well as research and development services is variable as the consideration is either constrained or the total amount of services to be performed has not been finalized. The Company estimates variable consideration at the most likely amount to which it expects to be entitled. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur and when any uncertainty associated with variable consideration is resolved. The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our historical and anticipated performance, external factors, trends and all other information (historical, current and forecasted) that is reasonably available to us. A significant change in one or more of these estimates could affect the profitability of the Company’s contracts. As such, the Company reviews and updates its contract-related estimates regularly. The Company recognizes adjustments in estimated revenues, research and development expenses and cost of sales under the cumulative catch-up method. Under this method, the impact of the adjustment on revenues, research and development expenses and cost of sales recorded to date on a contract is recognized in the period the adjustment is identified. Contract Balances. The timing of revenue recognition, billings and cash collections may result in billed accounts receivable, unbilled receivables (contract assets) and customer advances and deposits (contract liabilities) in the condensed consolidated balance sheet. Generally, amounts are billed as work progresses in accordance with agreed-upon contractual terms either at periodic intervals (monthly) or upon achievement of contractual milestones. Under typical payment terms of fixed price arrangements, the customer pays the Company either performance-based payments or progress payments. For the Company’s cost type arrangements, the customer generally pays the Company for its actual costs incurred. Such payments occur within a short period of time. Remaining Performance Obligations. Remaining performance obligations represents the transaction price for which work has not been performed and excludes unexercised contract options. As of June 30, 2018 the aggregate amount of transaction price allocated to remaining performance obligations for the BARDA Contract and the IV Formulation R&D Contract was $11.5 million. The Company expects to recognize revenue over the next three to five years as the specific timing for satisfying the performance obligations is subjective and outside the Company’s control. Deferred Revenue When the Company receives consideration, or such consideration is unconditionally due, prior to transferring goods or services to the customer under the terms of a sales contract, the Company records deferred revenue, which represents a contract liability. The Company recognizes deferred revenue as net sales once control of goods and/or services has been transferred to the customer and all revenue recognition criteria have been met and any constraints have been resolved. The Company has deferred revenue in connection with the manufacture and delivery of oral TPOXX® under the BARDA contract. Revenue recognition as of June 30, 2018 was constrained by the possibility of product replacement pursuant to the Replacement Obligation. On July 13, 2018, the FDA approved oral TPOXX® for the treatment of smallpox. With FDA approval, the replacement obligation has been quantified and specified as immaterial since there is no difference between the approved product and the courses of oral TPOXX® that have already been delivered to the Strategic Stockpile. As such, deferred revenue associated with the BARDA contract will be recorded as net sales during the three months ended September 30, 2018. Therefore, as of June 30, 2018, in light of this expectation, deferred revenue and deferred costs related to the BARDA contract (see amounts in Note 3) have been classified as current in the condensed consolidated balance sheet. The following table presents changes in the Company's deferred revenue:
Restricted Cash and Cash Equivalents On January 1, 2018, the Company adopted ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, a consensus of the FASB’s Emerging Issues Task Force. The new standard required that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities are required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. Adoption of this guidance impacts the cash flow disclosure for the six months ended June 30, 2017; cash flows from operating activities, as disclosed herein, is $5.1 million less than the amount disclosed in the 2017 second quarter 10-Q. A portion of the Company’s cash received under the Loan Agreement is restricted. In accordance with the Loan Agreement, cash placed in the reserve account is restricted. Except for $5 million, cash in the reserve account can only be utilized to pay interest on the Term Loan. The aforementioned $5 million was withdrawn from the reserve account on July 12, 2018 upon confirmation that there have been no events of default, and was placed in the Company's cash operating account. See Note 7 for additional information. The following table reconciles cash, cash equivalents and restricted cash per the condensed consolidated statements of cash flows to the condensed consolidated balance sheet for each respective period:
Recent Accounting Pronouncements On January 26, 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. The revised guidance will be applied prospectively, and is effective for fiscal years beginning after December 15, 2019. The Company believes the adoption of ASU No. 2017-04 will not have a significant impact on its consolidated financial statements. On February 25, 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which relates to the accounting for leasing transactions. This standard requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by leases with lease terms of more than 12 months. In addition, this standard requires both lessees and lessors to disclose certain key information about lease transactions. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact that ASU No. 2016-02 will have on its consolidated financial statements. The Company expects its real estate leases to be capitalized on its balance sheet. Reclassification In connection with the FDA's approval of oral TPOXX® on July 13, 2018, the Company has classified all deferred revenue as of June 30, 2018 as current. The prior period presentation of $1.3 million of deferred revenue as accrued expenses and other current liabilities as of December 31, 2017 was reclassed to conform with the current year presentation. |
Procurement Contract and Research Agreements |
6 Months Ended |
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Jun. 30, 2018 | |
Research and Development [Abstract] | |
Procurement Contract and Research Agreements | Procurement Contract and Research Agreements On May 13, 2011, the Company signed a contract with BARDA pursuant to which SIGA agreed to deliver two million courses of oral TPOXX® to the Strategic Stockpile. The contract with BARDA (as amended, modified, or supplemented from time to time, the “BARDA Contract”) includes a base contract (“Base Contract”) as well as options (described below). The Base Contract contemplates approximately $472.3 million of payments, of which $409.8 million is consideration for the manufacture and delivery of 1.7 million courses of oral TPOXX® and $62.5 million is available for certain development and supportive activities. Under the Base Contract, BARDA agreed to buy from the Company 1.7 million courses of oral TPOXX®. Additionally, the Company agreed to contribute to BARDA 300,000 courses at no additional cost to BARDA. The delivery of 2.0 million courses of oral TPOXX® to the Strategic Stockpile was required in order for the Company to receive a $41 million hold back payment (see description of hold back payment below). For courses of oral TPOXX® that have been physically delivered to the Strategic Stockpile, the Company has a product replacement obligation, at no cost to BARDA, in the event that the final version of oral TPOXX® approved by the FDA is different from any courses of oral TPOXX® that have been delivered to the Strategic Stockpile or if oral TPOXX® does not meet any specified label claims, fails release testing or does not meet the 38-month expiry period (from time of delivery to the Strategic Stockpile), or if oral TPOXX® is recalled or deemed to be recalled for any reason (the “Replacement Obligation”). As of June 30, 2018, the Company has cumulatively delivered 2.0 million courses of oral TPOXX® to the Strategic Stockpile and received $368.9 million under the Base Contract in connection with the manufacture and delivery of courses of oral TPOXX®. Such receipts were received in the following manner; a $41.0 million advance payment in 2011 for the completion of certain planning and preparatory activities related to the Base Contract; a $12.3 million milestone payment in 2012 for the completion of the product labeling strategy for oral TPOXX®; an $8.2 million milestone payment in 2013 for the completion of the commercial validation campaign for oral TPOXX®; a $20.5 million payment in 2016 for submission of documentation to BARDA indicating that data covering the first 100 subjects enrolled in the phase III pivotal safety study had been submitted to and reviewed by a Data Safety and Monitoring Board (“DSMB”) and that such DSMB had recommended continuation of the safety study, as well as submission of the final pivotal rabbit efficacy study report to the FDA; and $286.9 million of payments for physical deliveries of oral TPOXX® to the Strategic Stockpile beginning in 2013. On July13, 2018, the FDA approved oral TPOXX® for the treatment of smallpox. There is no difference between the approved product and courses already delivered to the strategic stockpile. As such, pursuant to the terms of the BARDA Contract the Company received $41 million that previously had been held back; the hold back payment represented an approximate 10% hold back on the $409.8 million of total payments related to the manufacture and delivery of 1.7 million courses of oral TPOXX® under the Base Contract. In addition to the Base Contract, the BARDA Contract also includes options. On July 30, 2018, the BARDA Contract was modified and BARDA exercised its option relating to FDA approval of 84-month expiry for oral TPOXX®, for which the Company has invoiced BARDA for $50.0 million and payment is due August 2018. The other options, if all were exercised by BARDA, would result in aggregate payments to the Company of $72.7 million, including up to $58.3 million of funding for development and supportive activities such as work on a smallpox prophylaxis indication for TPOXX® and/or $14.4 million of funding for production-related activities related to warm-base manufacturing. BARDA may choose in its sole discretion not to exercise any or all of the unexercised options. In 2015, BARDA exercised two options related to extending the indication of the drug to the geriatric and pediatric populations. The stated value of those exercises was minimal. The BARDA Contract expires in September 2020. As described in Note 2, cash inflows related to delivery of courses under the BARDA Contract have been recorded as deferred revenue due to the constraint on the consideration received. As of June 30, 2018, the Company recorded $375.5 million of deferred revenue in connection with the BARDA contract (of which $368.9 million relates to the manufacture and delivery of 1.7 million courses of oral TPOXX® and the remainder relates to supportive activities). In addition, direct costs incurred by the Company to fulfill the delivery of courses also have been deferred. As of June 30, 2018 and December 31, 2017, deferred direct costs under the BARDA Contract were approximately $94.4 million and $96.5 million, respectively. The Company expects this deferred revenue and related deferred costs to be recognized as revenue and expense on the income statement in the third quarter of 2018 since the constraint on consideration was resolved with the FDA approval of oral TPOXX® on July 13, 2018. Research Agreements and Grants The Company has an R&D program for IV TPOXX®. This program is funded by a development contract with BARDA (“IV Formulation R&D Contract”). This contract has a period of performance that terminates on December 30, 2020. Contracts and grants include, among other things, options that may or may not be exercised at BARDA’s discretion. Moreover, contracts and grants contain customary terms and conditions including BARDA’s right to terminate or restructure a contract or grant for convenience at any time. As such, we may not be able to utilize all available funds. |
Inventory |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | Inventory Due to the deferral of revenue under the BARDA Contract (see Note 2 for additional information), amounts that would be otherwise recorded as cost of goods sold for delivered courses are recorded as deferred costs on the condensed consolidated balance sheet. Inventory includes costs related to the manufacture of TPOXX®. Inventory consisted of the following:
For the three and six months ended June 30, 2017, research and development expenses included net inventory-related losses of approximately $0 and $536,000. The $536,000 loss for the six months ended June 30, 2017, related to a $686,000 inventory write-down, partially offset by credits received from contract manufacturing organizations (“CMOs”) in connection with the inventory write-down. |
Property, Plant and Equipment |
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Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment consisted of the following:
Depreciation and amortization expense on property, plant, and equipment was $4,139 and $39,663 for the three months ended June 30, 2018 and 2017, respectively, and $33,929 and $75,837 for the six months ended June 30, 2018 and 2017, respectively. |
Accrued Expenses and Other Current Liabilities |
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Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following:
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Financial Instruments |
6 Months Ended |
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Jun. 30, 2018 | |
Equity [Abstract] | |
Financial Instruments | Financial Instruments 2016 Warrant On September 2, 2016, in connection with the entry into the Loan Agreement (see Note 8 for additional information), the Company issued a warrant (the “Warrant”) to the Lender to purchase a number of shares of the Company’s common stock equal to $4.0 million divided by the lower of (i) $2.29 per share and (ii) the subscription price paid in connection with the Rights Offering. The Warrant provides for weighted average anti-dilution protection and is exercisable in whole or in part for ten (10) years from the date of issuance. The per share subscription price paid was $1.50 in connection with the Rights Offering; accordingly, the exercise price of the Warrant was set at $1.50 per share. The Company accounted for the Warrant in accordance with the authoritative guidance which requires that free-standing derivative financial instruments with certain anti-dilution and cash settlement features be classified as assets or liabilities at the time of the transaction, and recorded at their fair value. Any changes in the fair value of the derivative instruments are reported in earnings or loss as long as the derivative contracts are classified as assets or liabilities. Accordingly, the Company classified the Warrant as a liability and reports the change in fair value in the statement of operations. On September 2, 2016, the issuance date of the Warrant, the fair value of the liability classified Warrant was $5.8 million. The Company applied a Monte Carlo Simulation-model to calculate the fair value of the liability classified Warrant using the following assumptions: risk free interest rate of 1.60%; no dividend yield; an expected life of 10 years; and a volatility factor of 80%. The Company compared the Monte Carlo simulation model calculation to a Black-Scholes model calculation as of December 31, 2016. These models generated substantially equal fair values for the Warrant. As such, the Company continued to utilize a Black-Scholes model for June 30, 2018 to determine the fair value of the Warrant. As of June 30, 2018, the fair value of the Warrant was $14.4 million. The fair value of the liability classified Warrant was calculated using the following assumptions: risk free interest rate of 2.84%; no dividend yield; an expected life of 8.17 years; and a volatility factor of 80%. For the three months ended June 30, 2018 and 2017, the Company recorded a gain of $360,285, and $294,356, respectively, as a result of the change in fair value of the liability classified Warrant. For the six months ended June 30, 2018 and 2017, the Company recorded a loss of $2.9 million and $331,853, respectively, as a result of the change in fair value of the liability classified Warrant. |
Debt |
6 Months Ended |
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Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt On September 2, 2016, the Company entered into a loan and security agreement (as amended from time to time, the “Loan Agreement”) with OCM Strategic Credit SIGTEC Holdings, LLC (“Lender”), pursuant to which the Company received $80.0 million (less fees and other items) on November 16, 2016 having satisfied certain pre-conditions. Such $80.0 million had been placed in an escrow account on September 30, 2016 (the “Escrow Funding Date”). Prior to the Escrow Release Date (November 16, 2016), the Company did not have access to, or any ownership interest in, the escrow account. Until the Escrow Release Date occurred, the Company did not have an obligation to make any payments under the Loan Agreement, no security was granted under the Loan Agreement and no affirmative or negative covenants or events of default were effective under the Loan Agreement. Amounts were held in the escrow account until the satisfaction of certain conditions including the closing of the Rights Offering (see Note 7) on November 16, 2016. As part of the satisfaction of a litigation claim, funds were released from the escrow account (the date on which such transfer occurred, the “Escrow Release Date”). The Loan Agreement provides for a first-priority senior secured term loan facility in the aggregate principal amount of $80.0 million (the “Term Loan”), of which (i) $25.0 million was placed in a reserve account (the “Reserve Account”) only to be utilized to pay interest on the Term Loan as it becomes due; (ii) an additional $5.0 million was also placed in the Reserve Account and up to the full amount of such $5.0 million was eligible to be withdrawn after June 30, 2018 upon the satisfaction of certain conditions, provided that any of such amount is required to fund any interest to the extent any interest in excess of the aforementioned $25.0 million is due and owing and any of such $5.0 million remains in the Reserve Account; and (iii) $50.0 million (net of fees and expenses then due and owing to the Lender) was paid as part of the final payment to satisfy a litigation claim. Interest on the Term Loan is at a per annum rate equal to the Adjusted LIBOR rate plus11.5%, subject to adjustments as set forth in the Loan Agreement. At June 30, 2018, the effective interest rate on the Term Loan, which includes interest payments and accretion of unamortized costs and fees, was 19.1%. The Company incurred approximately $3.8 million of interest expense during the three months ended June 30, 2018, of which $2.7 million was paid from restricted cash and the remaining $1.1 million accreted to the Term Loan balance. For the six months ended June 30, 2018, the Company incurred approximately $7.6 million of interest expense, of which $5.4 million was paid from restricted cash and the remaining $2.2 million accreted to the Term Loan balance. On July 12, 2018, upon confirmation that there have been no events of default, $5 million was withdrawn by the Company from the Reserve Account and was placed in the Company's cash operating account. The Term Loan shall mature on the earliest to occur of (i) the four-year anniversary of the Escrow Release Date, and (ii) the acceleration of certain obligations pursuant to the Loan Agreement. At maturity, $80.0 million of principal will be repaid, and an additional $4.0 million will be paid (see below). Prior to maturity, there are no scheduled principal payments. Through the three and one-half year anniversary of the Escrow Release Date, any prepayment of the Term Loan is subject to a make-whole provision in which interest payments related to the prepaid amount are due (subject to a discount of treasury rate plus 0.50%). In connection with the Term Loan, the Company has granted the Lender a lien on and security interest in all of the Company’s right, title and interest in substantially all of the Company’s tangible and intangible assets, including all intellectual property. The Loan Agreement contains customary representations and warranties and customary affirmative and negative covenants. These covenants, among other things, require a minimum cash balance throughout the term of the Term Loan and the achievement of regulatory milestones by certain dates, and contain certain limitations on the ability of the Company to incur unreimbursed research and development expenditures over a certain threshold, make capital expenditures over a certain threshold, incur indebtedness, dispose of assets outside of the ordinary course of business and enter into certain merger or consolidation transactions. The minimum cash requirement is $5.0 million until August 27, 2018 (45 days after FDA approval of oral TPOXX®), at which point the minimum cash requirement will become $20.0 million. The Loan Agreement includes customary events of default, including, among others: (i) non-payment of amounts due thereunder, (ii) the material inaccuracy of representations or warranties made thereunder, (iii) non-compliance with covenants thereunder, (iv) non-payment of amounts due under, or the acceleration of, other material indebtedness of the Company and (v) bankruptcy or insolvency events. Upon the occurrence and during the continuance of an event of default under the Loan Agreement, the interest rate may increase by 2.00% per annum above the rate of interest otherwise in effect, and the Lenders would be entitled to accelerate the maturity of the Company’s outstanding obligations thereunder. As of June 30, 2018, the Company is in compliance with the Loan Agreement covenants. In connection with the Loan Agreement, the Company incurred $8.2 million of costs (including interest on amounts held in the escrow account between September 30, 2016 and November 15, 2016). Furthermore, an additional $4.0 million will become payable when principal of the Term Loan is repaid. As part of the Company's entry into the Loan Agreement, the Company issued the Warrant (see Note 7) with a fair market value of $5.8 million. The fair value of the Warrant, as well as costs related to the Term Loan issuance, were recorded as deductions to the Term Loan balance on the Balance Sheet. These amounts are being amortized on a straight-lined basis over the life of the related Term Loan. The Company compared the amortization under the effective interest method with the straight-lined basis and determined the results were not materially different. The $4.0 million that will be paid when principal is repaid is being accreted to the Term Loan balance each quarter on a per diem basis. As of June 30, 2018, the Term Loan balance is $73.3 million. |
Fair Value of Financial INstruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of cash and cash equivalents, restricted cash, accounts payable and accrued expenses and other current liabilities approximates fair value due to the relatively short maturity of these instruments. Common stock warrants which are classified as a liability are recorded at their fair market value as of each reporting period. The measurement of fair value requires the use of techniques based on observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. The inputs create the following fair value hierarchy:
The Company uses model-derived valuations where certain inputs are unobservable to third parties to determine the fair value of certain common stock warrants on a recurring basis and classify such liability classified warrants in Level 3. As described in Note 7, the fair value of the liability classified warrant was $14.4 million at June 30, 2018. At June 30, 2018, the fair value of the debt was $75.7 million and the carrying value of the debt was $73.3 million. The Company used a discounted cash flow model to estimate the fair value of the debt by applying a discount rate to future payments expected to be made as set forth in the Loan Agreement. The fair value of the loan was measured using Level 3 inputs. The discount rate was determined using market participant assumptions. There were no transfers between levels of the fair value hierarchy for the six months ended June 30, 2018. In addition, there were no Level 1 or Level 2 financial instruments as of June 30, 2018 and December 31, 2017. The following table presents changes in the liability-classified warrant measured at fair value using Level 3 inputs:
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Per Share Data |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per Share Data | Per Share Data The Company incurred losses for the three and six months ended June 30, 2018 and 2017 and as a result, the equity instruments listed below are excluded from the calculation of diluted earnings (loss) per share as the effect of the exercise, conversion or vesting of such instruments would be anti-dilutive. The weighted average number of equity instruments excluded consists of:
(1) Includes 294,118 restricted stock units that have vested but have not converted into common stock. The appreciation of each stock-settled stock appreciation right was capped at a determined maximum value. As a result, the weighted average number shown in the table above for stock-settled stock appreciation rights reflects the weighted average maximum number of shares that could be issued. |
Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time, we may be involved in a variety of claims, suits, investigations and proceedings arising from the ordinary course of our business, collections claims, breach of contract claims, labor and employment claims, tax and other matters. Although such claims, suits, investigations and proceedings are inherently uncertain and their results cannot be predicted with certainty, we believe that the resolution of such current pending matters, if any, will not have a material adverse effect on our business, consolidated financial position, results of operations or cash flow. Regardless of the outcome, litigation can have an adverse impact on us because of legal costs, diversion of management resources and other factors. |
Related Party Transactions |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||
Related Party Transactions | Related Party Transactions Board of Directors and Outside Counsel A member of the Company’s Board of Directors is a member of the Company’s outside counsel. During the three months ended June 30, 2018 and 2017, the Company incurred expenses of $112,500 and $139,000, respectively, related to services provided by the outside counsel. During the six months ended June 30, 2018 and 2017, the Company incurred expenses of $220,000 and $217,000, respectively, related to services provided by the outside counsel. On June 30, 2018 the Company’s outstanding payables and accrued expenses included an approximate $75,000 liability to the outside counsel. Real Estate Leases On May 26, 2017 the Company and MacAndrews & Forbes Incorporated (“M&F”) entered into a ten-year Office Lease agreement (the “New HQ Lease”), pursuant to which the Company agreed to lease 3,200 square feet at 27 East 62nd Street, New York, New York. The Company is utilizing premises leased under the New HQ Lease as its corporate headquarters. The Company's rental obligations consist of a fixed rent of $25,333 per month in the first sixty-three months of the term, subject to a rent abatement for the first six months of the term. From the first day of the sixty-fourth month of the term through the expiration or earlier termination of the lease, the Company's rental obligations consist of a fixed rent of $29,333 per month. In addition to the fixed rent, the Company will pay a facility fee in consideration of the landlord making available certain ancillary services, commencing on the first anniversary of entry into the lease. The facility fee will be $3,333 per month for the second year of the term and increasing by five percent each year thereafter, to $4,925 per month in the final year of the term. On July 31, 2017, the Company and M&F entered into a Termination of Sublease Agreement (the “Old HQ Sublease Termination Agreement”), pursuant to which the Company and M&F agreed to terminate the sublease dated January 9, 2013 for 6,676 square feet of rental square footage located at 660 Madison Avenue, Suite 1700, New York, New York (such sublease being the “Old HQ Sublease” and the location being the “Old HQ”). Effectiveness of the Old HQ Sublease Termination Agreement was conditioned upon the commencement of a sublease for the Old HQ between M&F and a new subtenant (the “Replacement M&F Sublease”), which occurred on August 2, 2017. The Old HQ Sublease Termination Agreement obligates the Company to pay, on a monthly basis, an amount equal to the discrepancy (the “Rent Discrepancy”) between the sum of certain operating expenses and taxes (“Additional Rent”) and fixed rent under the overlease between M&F and the landlord at 660 Madison Avenue and the sum of Additional Rent and fixed rent under the Replacement M&F Sublease. Under the Old HQ Sublease Termination Agreement, the Company and M&F release each other from any liability under the Old HQ Sublease. For the time period between August 2, 2017 and August 31, 2020 (the expiration date of the Old HQ Sublease), the Company estimates that it will pay a total of approximately $1.1 million in Rent Discrepancy under the Old HQ Sublease Termination Agreement. As a result of the above-mentioned transactions, the Company discontinued usage of Old HQ in the third quarter of 2017. As such, during the year ended December 31, 2017 the Company recorded a loss of approximately $1.1 million in accordance with Accounting Standards Codification (“ASC”) 420, Exit or Disposal Obligations. This loss primarily represented the discounted value of estimated Rent Discrepancy payments to occur in the future, and included costs related to the termination of the old HQ Sublease. The Company also wrote-off approximately $0.1 million of leasehold improvements and furniture and fixtures related to the Old HQ. The following table summarizes activity relating to the liability that was recorded as a result of the lease termination:
As of June 30, 2018, approximately $0.3 million of the lease termination liability is included in Other liabilities on the Condensed Consolidated Balance sheet with the remainder included in accrued expenses. Pre-Clinical Development Program On May 17, 2018, the Company and vTv Therapeutics LLC (“vTv”) entered into an asset purchase agreement, pursuant to which the Company acquired data related to certain pre-clinical development activities. Such data contains information that could be used to potentially develop clinical drug candidates. A de minimis amount ($10) was paid by the Company to vTv in order to execute the asset purchase agreement. vTv, which is majority owned by M&F, will receive a royalty of 1-4% of sales in the event that SIGA is able to (i) successfully develop a drug from the acquired data and (ii) there are drug sales. Additionally, vTv will receive up to 10% of development revenues in the event that SIGA receives revenues in connection with any development activities. |
Income Taxes |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes ASC 740, Income Taxes requires that a valuation allowance be established when it is “more likely than not” that all or a portion of deferred tax assets will not be realized. A review of all available positive and negative evidence needs to be considered, including the company's performance, the market environment in which the company operates, the utilization of past tax credits, length of carryback and carryforward periods, existing contracts, and unsettled circumstances that, if unfavorably resolved, would adversely affect future operations and profit levels in the future years. Based on the available evidence, as of June 30, 2018, the Company continues to conclude that its deferred tax assets are not realizable on a more-likely-than-not basis. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin (“SAB”) No. 118, which provides guidance on accounting for the tax effects of the 2017 Tax Cuts and Jobs Act (“TCJA”). The purpose of SAB No. 118 was to address any uncertainty or diversity of view in applying ASC Topic 740, Income Taxes in the reporting period in which the TCJA was enacted. SAB No. 118 addresses situations where the accounting is incomplete for certain income tax effects of the TCJA upon issuance of a company’s financial statements for the reporting period that includes the enactment date. SAB No. 118 allows for a provisional amount to be recorded if it is a reasonable estimate of the impact of the TCJA. Additionally, SAB No. 118 allows for a measurement period to finalize the effects of the TCJA, not to extend beyond one year from the date of enactment. The Company’s accounting for certain elements of the TCJA was incomplete as of the period ended December 31, 2017, and remains incomplete as of June 30, 2018. However, the Company was able to make reasonable estimates of the effect of the TCJA and, therefore, recorded provisional estimates for these items. The final impact of the TCJA may differ from the provisional amounts that have been recognized, due to, among other things, legislative or administrative actions to clarify the intent of the statutory language as well as any changes in accounting standards for income taxes or related interpretations in response to the TCJA. Additionally, the Company expects to file its U.S. tax returns for the tax year ended December 31, 2017 in the third quarter of 2018 and any changes to the tax positions for temporary differences compared to the estimates used may result in an adjustment of the estimated tax benefit recorded as of December 31, 2017. For the three and six months ended June 30, 2018, the Company recorded an income tax provision of $2,849 and $497, respectively, on a pre-tax loss of $7.1 million and $18.7 million, respectively. The effective tax rate differs from the statutory rate as no income tax benefit was recorded for current year operating losses due to the Company’s assessment, as of June 30, 2018, regarding realizability of its deferred tax assets. |
Summary of Significant Accounting Policies (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Restricted Cash and Cash Equivalents | Restricted Cash and Cash Equivalents On January 1, 2018, the Company adopted ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, a consensus of the FASB’s Emerging Issues Task Force. The new standard required that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities are required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. Adoption of this guidance impacts the cash flow disclosure for the six months ended June 30, 2017; cash flows from operating activities, as disclosed herein, is $5.1 million less than the amount disclosed in the 2017 second quarter 10-Q. A portion of the Company’s cash received under the Loan Agreement is restricted. In accordance with the Loan Agreement, cash placed in the reserve account is restricted. Except for $5 million, cash in the reserve account can only be utilized to pay interest on the Term Loan. The aforementioned $5 million was withdrawn from the reserve account on July 12, 2018 upon confirmation that there have been no events of default, and was placed in the Company's cash operating account. See Note 7 for additional information. |
Summary of Significant Accounting Policies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents and Restricted Cash | The following table reconciles cash, cash equivalents and restricted cash per the condensed consolidated statements of cash flows to the condensed consolidated balance sheet for each respective period:
|
Inventory (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | Inventory consisted of the following:
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Property, Plant and Equipment (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, plant and equipment | Property, plant and equipment consisted of the following:
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Accrued Expenses and Other Current Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following:
|
Fair Value of Financial INstruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents changes in the liability-classified warrant measured at fair value using Level 3 inputs:
|
Per Share Data (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of antidilutive securities excluded from computation of earnings per share | The weighted average number of equity instruments excluded consists of:
|
Related Party Transactions (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||
Schedule of Restructuring Reserve by Type of Cost | The following table summarizes activity relating to the liability that was recorded as a result of the lease termination:
|
Condensed Consolidated Financial Statements - Narrative (Details) - USD ($) $ in Millions |
Jul. 31, 2018 |
May 13, 2011 |
---|---|---|
BARDA Contract | ||
Procurement Contract [Line Items] | ||
Reduced holdback amount | $ 41.0 | |
Subsequent Event | ||
Procurement Contract [Line Items] | ||
Contract value, option, FDA approval | $ 50.0 |
Summary of Significant Accounting Policies - Contract with Customer, Asset and Liability (Details) |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
| |
Accounting Policies [Abstract] | |
Balance at December 31, 2017 | $ 378,896,803 |
Cumulative effect of accounting change | (1,780,050) |
Billings in advance of revenue recognition | 186,526 |
Revenue recognized | (740,281) |
Balance at March 31, 2018 | $ 376,562,998 |
Summary of Significant Accounting Policies - Cash, Cash Equivalents, Restricted Cash (Details) - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 10,581,112 | $ 19,857,833 | $ 30,865,937 | $ 28,701,824 |
Restricted cash - short-term | 11,028,824 | 10,701,305 | 10,322,289 | 10,138,890 |
Restricted cash - long-term | 1,701,843 | 6,542,448 | 12,091,399 | 17,333,332 |
Cash, cash equivalents and restricted cash | $ 23,311,779 | $ 37,101,586 | $ 53,279,625 | $ 56,174,046 |
Inventory (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Inventory Disclosure [Abstract] | ||||
Work in process | $ 1,950,445 | $ 2,025,445 | ||
Finished goods | 957,804 | 957,804 | ||
Inventory | 2,908,249 | $ 2,983,249 | ||
Write down of inventory | $ 0 | $ 0 | $ 536,000 | |
Inventory write-downs | $ 686,000 |
Property, Plant and Equipment (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Property, Plant and Equipment [Abstract] | |||||
Leasehold improvements, gross | $ 2,420,028 | $ 2,420,028 | $ 2,420,028 | ||
Computer equipment, gross | 718,241 | 718,241 | 701,762 | ||
Furniture and fixtures, gross | 363,588 | 363,588 | 363,588 | ||
Property, plant and equipment, gross | 3,501,857 | 3,501,857 | 3,485,378 | ||
Accumulated depreciation, depletion and amortization, property, plant, and equipment | (3,369,283) | (3,369,283) | (3,346,738) | ||
Property, plant and equipment, net | 132,574 | 132,574 | $ 138,640 | ||
Depreciation and other amortization | $ 4,139 | $ 39,663 | $ 33,929 | $ 75,837 |
Accrued Expenses and Other Current Liabilities (Details) - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Payables and Accruals [Abstract] | ||
Bonus | $ 893,888 | $ 2,538,340 |
Accrued interest | 936,695 | 87,955 |
Professional fees | 372,204 | 381,980 |
Vacation | 393,214 | 328,588 |
Other (primarily R&D vendors and CMOs) | 692,436 | 889,398 |
Accrued expenses and other current liabilities | $ 3,288,437 | $ 4,226,261 |
Fair Value of Financial INstruments - Narrative (Details) - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
Sep. 02, 2016 |
---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of warrant | $ 14,408,991 | $ 11,466,162 | |
Loan outstanding | 73,280,477 | $ 71,050,324 | |
Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of warrant | 14,400,000 | $ 5,800,000 | |
Senior Secured Term Loan | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loan outstanding | 73,300,000 | ||
Fair Value, Measurements, Recurring | Senior Secured Term Loan | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loan outstanding | $ 75,700,000 |
Fair Value of Financial INstruments - Change in Level 3 Liability (Details) |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
| |
Fair Value Disclosures [Abstract] | |
Warrant liability at December 31, 2017 | $ 11,466,162 |
Increase in fair value of warrant liability | 2,942,829 |
Warrant liability at June 30, 2018 | $ 14,408,991 |
Per Share Data (Details) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Restricted stock units | 294,118 | |||
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted average | 1,038,071 | 1,541,472 | 1,050,202 | 1,625,254 |
Stock-Settled Stock Appreciation Rights | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted average | 160,939 | 360,031 | 161,662 | 360,031 |
Restricted Stock Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted average | 1,473,155 | 1,332,817 | 1,472,581 | 1,320,211 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted average | 2,690,950 | 2,690,950 | 2,690,950 | 2,690,950 |
Related Party Transactions - Related Party Activity (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2017 | $ 814,622 |
Charges (included in selling, general and administrative expenses) | 7,534 |
Cash payments, net of sublease income | (156,305) |
Balance at June 30, 2018 | $ 665,851 |
Income Taxes (Details) - USD ($) |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2018 |
|
Income Tax Disclosure [Abstract] | ||
Current income tax expense (benefit) | $ 2,849 | $ 497 |
Pre-tax loss | $ (7,089,725) | $ (18,674,333) |
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