siga_8k.htm
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________

FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported): September 28, 2010
________

SIGA TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
 
Delaware 0-23047 13-3864870
(State or other jurisdiction of (Commission file number) (I.R.S. employer
incorporation or organization)   identification no.)
 
35 East 62nd Street    
New York, New York   10065
(Address of principal executive   (Zip code)
offices)    

Registrant’s telephone number, including area code: (212) 672-9100
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

 

Item 4.02(a) Non-Reliance on Previously Issued Financial Statements or Related Audit Report or Completed Interim Report.
 
     On September 28, 2010, SIGA Technologies, Inc., a Delaware corporation (“SIGA” or “the Company”), concluded, based on the recommendation of management, that the previously issued consolidated financial statements for the years ended December 31, 2009 and 2008, included in the Company’s most recently filed annual report on Form 10-K, and the quarterly periods from June 30, 2008 through June 30, 2010 included in the Company’s quarterly reports on Forms 10-Q (collectively, the “Affected Financial Statements”), are no longer reliable because they failed to incorporate non-cash charges resulting from required adjustments to certain outstanding warrants (the “Warrants”). These adjustments were triggered by the application of anti-dilution provisions included in the agreements governing the Warrants and, for the quarterly periods from June 30, 2008 through June 30, 2010, have resulted in the issuance of additional warrants to acquire approximately 710,000 shares of SIGA common stock. The required non-cash charges, totaling approximately $4.54 million for the period from June 30, 2008 through June 30, 2010, were not recorded in the affected accounting periods. The Company has determined that the Affected Financial Statements should be restated to reflect these non-cash charges.
 
     The Company has concluded that the only change required to its previously filed balance sheets and statements of operations will be the recording of the appropriate non-cash charges in the appropriate reporting periods and the effects therefrom. No other change to its previously filed balance sheets or statements of operations is anticipated.
 
     There is no impact on net cash flows for the 2008 and 2009 annual periods and the first two 2010 quarterly periods because the changes in the fair value of common stock warrants are recorded as non-cash charges that adjust net loss to reconcile to net cash used in operating activities on the Company’s consolidated statements of cash flows.
 
     These non-cash charges arise because the Company has accounted for the Warrants under the provisions of Emerging Issues Task Force No. 00-19 (now ASC 815), which requires that free-standing derivative financial instruments that require net cash settlement be classified as assets or liabilities at the time of the transaction, and recorded at their fair value. ASC 815 also requires that any subsequent change in the fair value of the derivative instruments be reported in earnings or loss for so long as the derivative contracts are classified as assets or liabilities.
 
     The effects of these non-cash adjustments on the Company’s financial statements for the years ended December 31, 2009 and 2008 and the quarters ended June 30, 2010 and March 31, 2010, are detailed below, by reporting period.
 
     The Company is currently preparing amendments to its prior filings with the Securities and Exchange Commission in order to restate its financial statements for each of the nine quarters in the period ended June 30, 2010. The Company’s management has determined that there was a material weakness in the Company’s internal control over financial reporting that did not allow for timely identification and recording with respect to anti-dilution provisions included in the Warrants. The Company is in the process of implementing additional accounting controls and procedures to remediate the internal control that was ineffective where contractual terms are reviewed on a quarterly basis to assess financial statements implications and is considering further enhancements to its existing internal controls and procedures.
 
     The Company’s Audit Committee has discussed with the Company’s independent registered public accounting firm the matters disclosed in this filing.
 
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Balance Sheet Summaries
Unaudited, In Thousands
 
    June 30, 2010
        As Originally Reported       Adjustments          As Restated
Total Current assets     19,341             19,341  
Total Noncurrent assets     2,819             2,819  
Total assets   $                           22,160           $      22,160  
Total current liabilities     9,835             9,835  
Common stock warrants     8,495                        4,543       13,038  
Total liabilities     18,330     4,543       22,873  
Common Stock, Additional Paid in Capital                      
and Other     103,744             103,744  
Accumulated deficit     (99,914 )   (4,543 )     (104,457 )
Total stockholders' equity     3,830     (4,543 )     (713 )
Total liabilities and stockholders' equity   $ 22,160           $ 22,160  
                       
    March 31, 2010
    As Originally Reported   Adjustments   As Restated
Total Current assets     21,239             21,239  
Total Noncurrent assets     2,476             2,476  
Total assets   $ 23,715           $ 23,715  
Total current liabilities     8,890             8,890  
Common stock warrants     7,387     3,863       11,250  
Total liabilities     16,277     3,863       20,140  
Common Stock, Additional Paid in Capital                      
and Other     102,781             102,781  
Accumulated deficit     (95,343 )   (3,863 )     (99,206 )
Total stockholders' equity     7,438     (3,863 )     3,575  
Total liabilities and stockholders' equity   $ 23,715           $ 23,715  
                       
    December 31, 2009
    As Originally Reported   Adjustments      As Restated
Total Current assets     23,487             23,487  
Total Noncurrent assets     2,429             2,429  
Total assets   $ 25,916           $ 25,916  
Total current liabilities     9,029             9,029  
Common stock warrants     6,398     3,336       9,734  
Total liabilities     15,427     3,336       18,763  
Common Stock, Additional Paid in Capital                      
and Other     101,422             101,422  
Accumulated deficit     (90,933 )   (3,336 )     (94,269 )
Total stockholders' equity     10,489     (3,336 )     7,153  
Total liabilities and stockholders' equity   $ 25,916           $ 25,916  

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    December 31, 2008
        As Originally Reported       Adjustments       As Restated
Total Current assets     6,255               6,255  
Total Noncurrent assets     2,542               2,542  
Total assets   $                            8,797             $       8,797  
Total current liabilities     4,319               4,319  
Common stock warrants     2,924       1,553       4,477  
Total liabilities     7,243       1,553       8,796  
Common Stock, Additional Paid in Capital                        
and Other     72,160               72,160  
Accumulated deficit     (70,606 )     (1,553 )     (72,159 )
Total stockholders' equity     1,554       (1,553 )     1  
Total liabilities and stockholders' equity   $ 8,797             $ 8,797  
                         
Statement of Operations Summaries                    
Unaudited, In Thousands                        
                         
    Three months ended June 30, 2010
    As Originally Reported   Adjustments   As Restated
Revenues   $ 4,447             $ 4,447  
Total operating expenses     7,469               7,469  
Operating Loss     (3,022 )             (3,022 )
Decrease (increase) in fair value of common                        
stock rights and common stock warrants     (1,549 )     (679 )     (2,228 )
Net loss   $ (4,571 )   $          (679 )   $ (5,250 )
Weighted average shares outstanding: basic                        
and diluted     43,620               43,620  
Net loss per share: basic and diluted   $ (0.10 )   $ (0.02 )   $ (0.12 )
     
    Three months ended March 31, 2010
    As Originally Reported   Adjustments   As Restated
Revenues   $ 5,075             $ 5,075  
Total operating expenses     8,116               8,116  
Operating Loss     (3,041 )             (3,041 )
Decrease (increase) in fair value of common                        
stock rights and common stock warrants     (1,369 )     (527 )     (1,896 )
Net loss   $ (4,410 )   $ (527 )   $ (4,937 )
Weighted average shares outstanding: basic                        
and diluted     43,196               43,196  
Net loss per share: basic and diluted   $ (0.10 )   $ (0.01 )   $ (0.11 )

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    Year ended December 31, 2009
        As Originally Reported       Adjustments       As Restated
Revenues   $ 13,812             $       13,812  
Total operating expenses     25,691               25,691  
Operating Loss     (11,879 )             (11,879 )
Decrease (increase) in fair value of common                        
stock rights and common stock warrants     (5,740 )     (1,783 )     (7,523 )
Other income (expense), net     1               1  
Net loss   $                            (17,618 )   $          (1,783 )   $ (19,401 )
Weighted average shares outstanding: basic                        
and diluted     37,463               37,463  
Net loss per share: basic and diluted   $ (0.47 )   $ (0.05 )   $ (0.52 )
                         
    Year ended December 31, 2008
    As Originally Reported   Adjustments   As Restated
Revenues   $ 8,066             $ 8,066  
Total operating expenses     16,803               16,803  
Operating Loss     (8,737 )             (8,737 )
Decrease (increase) in fair value of common                        
stock rights and common stock warrants     43       (1,553 )     (1,510 )
Other income (expense), net     94               94  
Net loss   $ (8,600 )   $ (1,553 )   $ (10,153 )
Weighted average shares outstanding: basic                        
and diluted     34,733               34,733  
Net loss per share: basic and diluted   $ (0.25 )   $ (0.04 )   $ (0.29 )
 
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SIGNATURE
 
     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 hereunto duly authorized.
 
  SIGA TECHNOLOGIES, INC.
   
  By:  /s/ Ayelet Dugary  
    Ayelet Dugary
    Chief Financial Officer  

Date: September 28, 2010
 
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