SIGA Technologies(SIGA) - 2019 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) The unaudited condensed consolidated financial statements show $14.4 million in revenues and a $1.5 million net loss for the six months ended June 30, 2019, primarily from TPOXX® sales Condensed Consolidated Balance Sheet Summary (Unaudited) | Account | June 30, 2019 ($) | December 31, 2018 ($) | | :--- | :--- | :--- | | Total Current Assets | 121,534,950 | 121,289,845 | | Total Assets | 203,092,260 | 203,443,741 | | Total Current Liabilities | 11,123,209 | 11,337,405 | | Total Liabilities | 99,637,793 | 100,529,054 | | Total Stockholders' Equity | 103,454,467 | 102,914,687 | Condensed Consolidated Statements of Operations Summary (Unaudited) | Metric | Three Months Ended June 30, 2019 ($) | Three Months Ended June 30, 2018 ($) | Six Months Ended June 30, 2019 ($) | Six Months Ended June 30, 2018 ($) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | 3,907,611 | 2,661,216 | 14,366,695 | 4,409,150 | | Operating (Loss) Income | (1,705,250) | (3,709,691) | 486,704 | (8,244,602) | | Net and Comprehensive Loss | (3,162,492) | (7,051,264) | (1,532,715) | (18,633,520) | | Basic Loss Per Share | (0.04) | (0.09) | (0.02) | (0.24) | | Diluted Loss Per Share | (0.05) | (0.09) | (0.06) | (0.24) | Condensed Consolidated Statements of Cash Flows Summary (Unaudited) | Cash Flow Activity | Six Months Ended June 30, 2019 ($) | Six Months Ended June 30, 2018 ($) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (4,338,433) | (13,749,616) | | Net Cash Used in Investing Activities | (8,948) | (27,863) | | Net Cash Used in Financing Activities | (56,590) | (12,328) | | Net Decrease in Cash | (4,403,971) | (13,789,807) | | Cash, Cash Equivalents and Restricted Cash at End of Period | 175,992,939 | 23,311,779 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's focus on the health security market with TPOXX®, attributing significant H1 2019 revenue growth to BARDA contract deliveries and noting stable financial condition with $100.3 million in cash - The company is a commercial-stage pharmaceutical company focused on the health security market, with its lead product being oral TPOXX®, an antiviral drug for smallpox[96] - The 2018 BARDA Contract has a potential value of up to approximately $600.1 million, including a $51.7 million base period, $23.4 million in exercised options, and up to $525.0 million in unexercised options as of June 30, 2019[97] Comparison of Results of Operations (Six Months Ended June 30) | Metric | 2019 ($) | 2018 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenues | 14.4 million | 4.4 million | +227% | | - Product Sales | 7.1 million | 0 | N/A | | - R&D Revenues | 7.2 million | 4.4 million | +64% | | SG&A Expenses | 6.6 million | 5.9 million | +10% | | R&D Expenses | 6.0 million | 6.3 million | -5% | | Pre-tax Loss | (2.1 million) | (18.6 million) | -88.7% | - As of June 30, 2019, the company held $100.3 million in cash and cash equivalents and $75.7 million in restricted cash for Term Loan payments[127] Item 3. Quantitative and Qualitative Disclosures about Market Risk The company faces interest rate risk from its LIBOR-based Term Loan and stock price risk from a liability-classified warrant, with a 0.5% LIBOR increase raising annual interest by $0.4 million - The company is exposed to rising LIBOR rates on its Term Loan, where a 0.5% increase in the minimum LIBOR rate would raise annual interest payments by approximately $0.4 million[138] - The company is subject to stock price fluctuation risk due to a liability-classified warrant, with every $1 increase in SIGA's stock price increasing the intrinsic value of this warrant liability by approximately $1.5 million[139] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2019, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of June 30, 2019, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[141] - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2019, that materially affected, or are reasonably likely to materially affect, these controls[142] PART II - OTHER INFORMATION Item 1. Legal Proceedings The company believes that the resolution of any current legal matters will not materially adversely affect its business or financial condition - The company believes that the resolution of any current pending legal matters will not have a material adverse effect on its business, financial position, results of operations, or cash flow[144] Item 1A. Risk Factors This section refers investors to the detailed discussion of risks and uncertainties in the company's 2018 Annual Report on Form 10-K - The company's operations and financial condition are subject to numerous risks and uncertainties which are described in its 2018 Annual Report on Form 10-K[145] Item 2. Unregistered Sale of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None[146] Item 3. Defaults upon Senior Securities The company reported no defaults upon senior securities during the period - None[147] Item 4. Mine Safety Disclosures No mine safety disclosures were required for the company - No disclosure is required pursuant to this item[148] Item 5. Other Information No other information was required to be disclosed - No disclosure is required pursuant to this item[149] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including Sarbanes-Oxley certifications and amendments to key contracts - The exhibits filed include CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906, amendments to contracts with BARDA, a promotion agreement with Meridian Medical Technologies, Inc., an amendment to the Loan and Security Agreement, and XBRL data files[151]