CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	*June 30, 2022*			*December 31, 2021*
ASSETS
Current assets
Cash and cash equivalents	$	114,530,926		$	103,138,819
Accounts receivable		19,598,122			83,650,450
Inventory		16,431,382			19,510,379
Prepaid expenses and other current assets		3,083,027			2,453,444
Total current assets		153,643,457			208,753,092

Property, plant and equipment, net		2,109,720			2,365,957
Deferred income taxes, net		3,039,814			2,422,607
Goodwill		898,334			898,334
Other assets		249,170			286,585
Total assets	$	159,940,495		$	214,726,575
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	1,214,617		$	2,028,004
Accrued expenses and other current liabilities		14,844,830			9,252,812
Income tax payable		634,619			19,207,042
Total current liabilities		16,694,066			30,487,858

Warrant liability		0			6,521,441
Other liabilities		3,477,575			3,402,869
Total liabilities		20,171,641			40,412,168
Commitments and contingencies
Stockholders’ equity
Common stock ($.0001 par value, 600,000,000 shares authorized, 73,024,147 and 73,543,602, issued and outstanding at June 30, 2022 and December 31, 2021, respectively)		7,302			7,354
Additional paid-in capital		232,942,666			226,070,308
Accumulated deficit		(93,181,114	)		(51,763,255	)
Total stockholders’ equity		139,768,854			174,314,407
Total liabilities and stockholders’ equity	$	159,940,495		$	214,726,575

September 30, 2017 December 31, 2016
ASSETS
Current assets
Cash and cash equivalents $ 25,798,125
$ 28,701,824
Restricted cash and cash equivalents, short-term 10,408,810
10,138,890
Accounts receivable 612,166
3,154,370
Inventory 2,983,249
26,209,964
Prepaid expenses and other current assets 1,092,396
954,426
Total current assets $ 40,894,746
$ 69,159,474

Property, plant and equipment, net 119,735
299,477
Restricted cash and cash equivalents, long-term 9,430,016
17,333,332
Deferred costs 96,741,244
72,649,277
Goodwill 898,334
898,334
Other assets 642,083
642,083
Total assets $ 148,726,158
$ 160,981,977
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current liabilities
Accounts payable $ 1,362,331
$ 2,517,072
Accrued expenses and other current liabilities 4,320,994
4,584,752
Warrant liability 7,355,033
6,727,409
Total current liabilities 13,038,358
13,829,233
Deferred revenue 377,447,093
367,483,905
Deferred income tax liability, net 306,449
286,066
Other liabilities 844,407
247,989
Long-term debt 69,916,765
66,553,053
Total liabilities 461,553,072
448,400,246
Commitments and Contingencies

Stockholders’ deficiency
Common stock ($.0001 par value, 600,000,000 shares authorized, 78,908,929 and 78,692,612 issued and outstanding at September 30, 2017, and December 31, 2016, respectively) 7,890
7,869
Additional paid-in capital 214,238,249
213,714,154
Accumulated deficit (527,073,053 ) (501,140,292 )
Total stockholders’ deficiency (312,826,914 ) (287,418,269 )
Total liabilities and stockholders’ deficiency $ 148,726,158
$ 160,981,977

The accompanying notes are an integral part of these financial statements.

Table of Contents

SIGA TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE ~~LOSS~~INCOME (LOSS) (UNAUDITED)

	*Three Months Ended June 30,*						*Six Months Ended June 30,*
	*2022*			*2021*			*2022*			*2021*
Revenues
Product sales and supportive services	$	8,615,765		$	6,924,162		$	15,936,637		$	10,447,505
Research and development		8,051,280			1,729,127			11,269,708			3,019,528
Total revenues		16,667,045			8,653,289			27,206,345			13,467,033

Operating expenses
Cost of sales and supportive services		882,096			995,990			5,602,212			1,246,838
Selling, general and administrative		5,874,139			5,392,226			9,585,427			9,641,744
Research and development		6,840,099			2,263,971			10,386,876			4,566,756
Total operating expenses		13,596,334			8,652,187			25,574,515			15,455,338
Operating income/(loss)		3,070,711			1,102			1,631,830			(1,988,305	)
Gain from change in fair value of warrant liability		49,559			442,269			400,663			1,361,070
Other income, net		72,373			24,235			95,694			49,803
Income/(loss) before income taxes		3,192,643			467,606			2,128,187			(577,432	)
Provision for income taxes		(1,155,581	)		(298,406	)		(452,175	)		(65,473	)
Net and comprehensive income/(loss)	$	2,037,062		$	169,200		$	1,676,012		$	(642,905	)
Basic income/(loss) per share	$	0.03		$	0.00		$	0.02		$	(0.01	)
Diluted income/(loss) per share	$	0.03		$	(0.00	)	$	0.02		$	(0.03	)
Weighted average shares outstanding: basic		72,678,333			75,810,641			72,873,366			76,281,211
Weighted average shares outstanding: diluted		73,332,888			76,660,054			73,699,226			77,128,973

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Revenues
Research and development $ 1,390,254
$ 4,658,355
$ 10,856,601
$ 7,829,402

Operating expenses
Selling, general and administrative 3,093,926
2,855,255
9,022,039
9,276,507
Research and development 2,470,835
6,068,567
13,899,162
11,553,469
Patent expenses 250,857
230,246
688,471
689,651
Lease termination 1,225,421
—
1,225,421
—
Interest on PharmAthene liability —
3,566,451
—
10,716,276
Total operating expenses 7,041,039
12,720,519
24,835,093
32,235,903
Operating loss (5,650,785 ) (8,062,164 ) (13,978,492 ) (24,406,501 )
Interest expense (3,737,175 ) (94,776 ) (10,995,900 ) (104,991 )
Loss from change in fair value of warrant liabilities (295,771 ) (1,121,530 ) (627,624 ) (1,121,530 )
Other income, net 2,021
30,756
11,818
100,556
Reorganization items, net —
—
—
(3,716,902 )
Loss before income taxes (9,681,710 ) (9,247,714 ) (25,590,198 ) (29,249,368 )
(Provision)/Benefit for income taxes (134,668 ) 4,072
(342,563 ) (8,692 )
Net and comprehensive loss $ (9,816,378 ) $ (9,243,642 ) $ (25,932,761 ) $ (29,258,060 )

Loss per share: basic and diluted $ (0.12 ) $ (0.17 ) $ (0.33 ) $ (0.54 )
Weighted average shares outstanding: basic and diluted 78,908,929
54,284,296
78,842,611
54,205,354

The accompanying notes are an integral part of these financial statements.

Table of Contents

SIGA TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	*Six Months Ended June 30,*
	*2022*			*2021*
Cash flows from operating activities:
Net income (loss)	$	1,676,012		$	(642,905	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and other amortization		256,237			264,834
Gain on change in fair value of warrant liability		(400,663	)		(1,361,070	)
Stock-based compensation		764,208			713,817
Write down of inventory, net		157,740			630,707
Deferred income taxes, net		(617,207	)		(187,420	)
Changes in assets and liabilities:
Accounts receivable		64,052,328			(3,865,872	)
Inventory		2,921,257			34,921
Prepaid expenses and other assets		(592,168	)		622,109
Accounts payable, accrued expenses and other liabilities		1,582,679			(1,927,150	)
Income tax payable		(18,572,423	)		(892,148	)
Deferred revenue		3,270,658			373,593
Net cash provided by/(used in) operating activities		54,498,658			(6,236,584	)
Cash flows from investing activities:
Capital expenditures		0			(24,424	)
Cash used in investing activities		0			(24,424	)
Cash flows from financing activities:
Payment of employee tax obligations for common stock tendered		(12,533	)		(13,361	)
Repurchase of common stock		(10,149,704	)		(13,129,858	)
Payment of dividend		(32,944,314	)		0
Cash used in financing activities		(43,106,551	)		(13,143,219	)
Net increase/(decrease) in cash, cash equivalents and restricted cash		11,392,107			(19,404,227	)
Cash, cash equivalents and restricted cash at the beginning of period		103,138,819			117,890,240
Cash and cash equivalents at end of period	$	114,530,926		$	98,486,013

Supplemental disclosure of non-cash financing activities:
Conversion of warrant to common stock	$	6,120,778		$	0

Nine months ended September 30,
2017 2016
Cash flows from operating activities:
Net loss $ (25,932,761 ) $ (29,258,060 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and other amortization 105,212
130,704
Loss on change in fair value of warrant liability 627,624
1,121,530
Lease termination 1,225,421
—
Stock-based compensation 773,671
521,666
            Deferred income taxes, net 20,383
16,246
Write down of inventory, net 536,000
—
Non-cash interest expense 3,363,712
—
Interest expense on term loan - paid with restricted cash 7,633,396
—
Changes in assets and liabilities:
                     Accounts receivable 2,542,204
(35,070,347 )
                     Inventory 22,690,715
(5,304,431 )
                     Deferred costs (24,091,967 ) (21,452,562 )
                     Prepaid expenses and other current assets (137,970 ) (1,835,322 )
                     Other assets —
1,347,437
                     Accounts payable, accrued expenses and other current liabilities (1,719,229 ) 385,680
                     PharmAthene liability —
93,654,855
                     Liabilities subject to compromise —
(206,972,170 )
                     Deferred revenue 9,963,188
111,865,203
                     Other liabilities (199,501 ) (63,171 )
Net cash used in operating activities (2,599,902 ) (90,912,742 )
Cash flows from investing activities:
              Capital expenditures (54,242 ) (10,997 )
                    Net cash used in investing activities (54,242 ) (10,997 )
Cash flows from financing activities:
                    Net proceeds from exercise of warrants and options 27,497
—
                    Buy back of stock options (84,000 ) —
              Payments associated with loan agreement and rights offering

(1,294,501 )
                    Payment of employee tax obligations for common stock tendered (193,052 ) —
               Net cash used in financing activities (249,555 ) (1,294,501 )
Net decrease in cash and cash equivalents (2,903,699 ) (92,218,240 )
Cash and cash equivalents at beginning of period 28,701,824
112,711,028
Cash and cash equivalents at end of period $ 25,798,125
$ 20,492,788

Supplemental disclosure of cash flows information:
Cash interest paid on term loan from restricted cash $ 7,633,396
$ —
Fair value of warrant, at issuance date, in connection with loan agreement and recorded as warrant liability

—
(5,832,624 )

The accompanying notes are an integral part of these financial statements

Table of Contents

SIGA TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.Condensed Consolidated Financial Statements

The financial statements of SIGA Technologies, Inc. (“we,” “our,” “us,” “SIGA” or the “Company”) 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~~10-Q and should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended December 31, ~~2016,~~2021, included in the ~~2016~~Company's 2021 Annual Report on Form ~~10-K.~~10-K filed on March 3, 2022 (the "2021 Form 10-K"). All terms used but not defined elsewhere herein have the meaning ascribed to them in the ~~Company’s 2016 Annual Report on~~2021 Form ~~10-K filed on March 7, 2017.~~10-K. 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 ~~2016~~2021 year-end condensed consolidated balance sheet data ~~was~~were derived from the audited financial statements but ~~does~~ do not include all disclosures required by U.S. GAAP. The results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 are not necessarily indicative of the results expected for the full year.

~~Closing~~

2. Summary of ~~Chapter 11 Case~~

~~On April 12, 2016, the Company emerged from chapter 11~~Significant Accounting Policies

Revenue Recognition

All of the Bankruptcy Code when the Company's plan of reorganization (the “Plan”) became effective, and on December 22, 2016 the Company's chapter 11 case was closed by the Bankruptcy Court. Under the Plan, the Company fully paid all of its claims.Company’s revenue is derived from long-term contracts that span multiple years. The Company ~~did not apply the provision of fresh start accounting as ownership of existing shares of the Company's common stock remained unaltered by the Plan.~~

~~Prior to April, 12 2016, the effective date of the Plan, the Company was operating its business as a “debtor-in-possession.” The Company had filed on September 16, 2014 a voluntary petition~~accounts for ~~relief under chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”)~~revenue in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) chapter 11 Case Number 14-12623 (SHL). The chapter 11 case preserved the Company's ability to satisfy its commitments under the BARDA Contract (as defined in ~~Note 3) and preserved its operations, which likely would have been jeopardized by the enforcement of a judgment stemming~~accordance with ASC Topic 606,Revenue from ~~the Company's litigation~~Contracts with ~~PharmAthene, Inc.~~Customers (“PharmAthene”) (see “PharmAthene Litigation” below). While operating as a debtor-in-possession under chapter 11, the Company pursued an appeal of the Delaware Court of Chancery Final Order and Judgment, without having to post a bond.

~~PharmAthene Litigation~~

~~On November 16, 2016, the Company satisfied the Outstanding Judgment (as defined in~~ ~~Note 11) owed to PharmAthene in connection with the Company's litigation with PharmAthene. In total, PharmAthene was paid $217.0 million in connection with the Outstanding Judgment. See~~ ~~Note 11~~ ~~for additional details related to this litigation.~~

~~Liquidity~~

The accompanying 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. The Company is not entitled to receive any additional procurement-related payments under the current BARDA Contract (~~Note 3) if and until U.S. Food and Drug Administration (~~“~~FDA~~”~~) approval of TPOXX® has been achieved, and there is no difference between the approved product and courses of TPOXX® which have been delivered to the U.S. Strategic National Stockpile (~~“~~Strategic Stockpile~~”ASC 606”). ~~Upon meeting these requirements,~~In all transactions, the Company is ~~entitled~~the principal as it controls the specified good or service before it is transferred to ~~a $41 million hold back payment under~~ the ~~BARDA Contract. Based~~customer and therefore recognizes revenue on a ~~targeted New Drug Application (~~“~~NDA~~”~~) filing~~gross basis. A contract’s transaction price is allocated to distinct performance obligations and recognized as revenue when, or as, a performance obligation is satisfied. The Company accounts for ~~TPOXX® by~~shipping and handling activities as fulfillment costs rather than as an additional promised service. As of June 30, 2022, the ~~end of 2017, it is currently anticipated that the Company will be eligible to receive the $41 million hold back payment~~Company's active contractual performance obligations are referenced in ~~the second half of 2018.~~

~~In the event that the Company does not receive a substantial portion~~Note 3 and consist of the ~~hold back payment,~~following: five performance obligations relate to research and development services; and six relate to manufacture and delivery of product. The aggregate amount of the transaction price allocated to remaining performance obligations was $64.8 million as of June 30, 2022. Remaining performance obligations represent the transaction price for which work has not been performed and excludes unexercised contract options. The Company expects to recognize this amount as revenue within the next three years as the specific timing for satisfying performance obligations is subjective and largely outside the Company's control.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or ~~other substantial cash inflows, by October~~service to the customer and is the unit of ~~2018, then, based on currently forecasted operating costs,~~account in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the ~~Company will require additional sources~~performance obligation is satisfied.

Contract modifications may occur during the course of ~~funding~~performance of our contracts. Contracts are often modified to ~~continue operations~~account for changes in contract specifications or requirements. In most instances, contract modifications are for services that are not distinct, and, ~~prevent an event of default under its term loan (Note 8). In this case, the Company would seek to increase cash liquidity by: raising proceeds through a financing, entering into a new contract~~therefore, are accounted for ~~TPOXX® or any other product, a sale of assets, or the modification~~as part of the existing ~~BARDA Contract; significantly reducing~~contract.

The Company’s performance obligations are satisfied over time as work progresses or at a point in time. All of the Company’s revenue related to current research and development performance obligations is recognized over time, because the customer simultaneously receives and consumes the benefits provided by the services as the Company performs these services. The Company recognizes revenue related to these services based on the progress toward complete satisfaction of the performance obligation and measures this progress under an input method, which is based on the Company’s cost incurred relative to total estimated costs. Under this method, progress is measured based on the cost of resources consumed (i.e., cost of third-party services performed, cost of direct labor hours incurred, and cost of materials consumed) compared to the total estimated costs to completely satisfy the performance obligation. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. The incurred and estimated costs used in the measure of progress include third-party services performed, direct labor hours, and material consumed.

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 sheets. 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; as of June 30, 2022, the accounts receivable balance in the condensed balance sheet includes approximately $14.0 million of unbilled receivables. This amount includes net proceeds, net of Meridian fee (as defined below) from international sales, which will be billed and collected by Meridian and paid to SIGA. 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 ~~operating expenses;~~actual costs incurred, as well as its allocated overhead and general and administrative costs. Such payments occur within a short period of time from billing. When the Company receives consideration, or ~~modifying~~such consideration is unconditionally due, prior to transferring goods or services to the customer under the terms of ~~the Loan Agreement. There can be no assurance that TPOXX® will receive FDA approval on~~ a timely basis, if at all, or that there will be no difference between the approved product and courses of TPOXX® which have been delivered to the Strategic Stockpile. Furthermore, there can be no assurance thatsales contract, the Company ~~would be able to increase cash liquidity, if needed, through~~records deferred revenue, which represents a ~~financing, a new~~ contract ~~for TPOXX® or~~ ~~any other product, a sale~~liability. During the six months ended June 30, 2022, the Company recognized $3.0 million of ~~assets, the modification of the existing BARDA Contract, or a significant reduction of its operating expenses or operations, or~~revenue that ~~the lenders would agree to modify the term loan~~

~~agreement, if needed. Because of these uncertainties, substantial doubt exists about the Company’s ability to continue as a going concern~~ ~~for~~ ~~one year from the financial statement issuance date.~~

~~2. Recent Accounting Pronouncements~~

~~In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-11,~~ ~~Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). The amendments~~was included in Part I of this ASU change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The amendments in Part II of this ASU recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as ofdeferred revenue at the beginning of the ~~fiscal year that~~period.

Table of Contents

Repurchase of shares

When shares recognized as equity are repurchased, the amount of the consideration paid, which includes ~~that interim period. The Company~~directly attributable costs, is ~~currently evaluating the impact that ASU 2017-11 will have on its consolidated financial statements.~~

~~On May 10, 2017, the FASB issued ASU 2017-09,~~ ~~Compensation—Stock Compensation (Topic 718) - Scope of Modification Accounting~~.~~The guidance clarifies when to account for a change to the terms or conditions of a share-based payment award~~recognized as a ~~modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification~~deduction from equity. The excess of the award (as equity or liability) changes as a result of the change in terms or conditions. The standard is effective for financial statements issued for fiscal years beginning after December 13, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company believes the adoption of ASU 2017-09 will not have a significant impact on its consolidated financial statements.

~~On January 26, 2017, the FASB issued ASU 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~~above par value ~~exceeds its fair value, not~~of repurchased shares that are retired is presented as an increase 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 calendar year ends in 2020. Early adoption is permitted for any impairment tests performed after January 1, 2017. The Company believes the adoption of ASU 2017-04 will not have a significant impact on its consolidated financial statements.

~~On November 17, 2016, the FASB issued ASU 2016-18,~~ ~~Statement of Cash Flows (Topic 230): Restricted Cash, a consensus of the FASB’s Emerging Issues Task Force~~. The new standard requires 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 will also be required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The guidance requires application using a retrospective transition method. The Company believes the adoption of ASU 2016-18 will have a significant impact due to the fact the Company will reflect sources and uses of restricted cash and cash equivalents in the consolidated statement of cash flows and provide a reconciliation of restricted cash balances.

~~On August 26, 2016, the FASB issued ASU 2016-15,~~ ~~Statement of Cash Flows (Topic 230), a consensus of the FASB’s Emerging Issues Task Force~~. The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The standard is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The guidance requires application using a retrospective transition method. The Company believes the adoption of ASU 2016-15 will not have a significant impact on its consolidated financial statements.

~~In March 2016, the FASB amended the existing accounting standards for stock-based compensation, ASU 2016-09,~~ ~~Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.~~ The amendments impact several aspects of accounting for share-based payment transactions, including the income tax consequences, expected forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted the amendments in the first quarter of 2017. Prior to adoption of ASU 2016-09, tax attributes related to stock option windfall deductions were not recorded until they resulted inaccumulated deficit (or a reduction of cash tax payable. As of December 31, 2016, the excluded windfall deductions for federal and state purposes were $1.6 million. Upon adoption of ASU 2016-09, the Company recognized the excluded windfall deductions as a deferred tax asset with a corresponding offset to the related valuation allowance.retained earnings, if any).

~~In respect of the forfeiture policy election, we will continue to estimate the number of awards expected to be forfeited.~~

~~On February 25, 2016, the FASB issued ASU 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 2016-02 will have on its consolidated financial statements. Based upon its current evaluation, the Company believes that the majority of its leases which primarily consist of facility leases will be capitalized on its balance sheet.

~~In May 2014, the FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606). ASU No. 2014-09 supersedes the revenue recognition requirements in Topic 605,~~ ~~Revenue Recognition~~, and most industry-specific revenue recognition guidance throughout the Industry Topics of the Accounting Standards Codification. Additionally, this update supersedes some cost guidance included in Subtopic 605-35, ~~Revenue Recognition-Construction-Type and Production-Type Contracts~~. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It is effective for the first interim period within annual reporting periods beginning after December 15, 2017, and early adoption is permitted for the first interim periods beginning after December 15, 2016. The Company expects to adopt this standard when it becomes effective in the first quarter of 2018 using the modified retrospective method. Any adjustment upon adoption will be recorded as an accumulated adjustment due to a change in accounting in the stockholders’ deficiency section. The Company has determined that revenue connected with courses delivered to BARDA and related services, milestones and advance payments (activities in combination that constitute one performance obligation), will be recognized at a point in time when the product is delivered. The Company has determined that revenue associated with this performance obligation is subject to a constraint. The Company does not expect revenue to be recognized in connection with these activities upon the adoption of this standard because the constraint of FDA approval of TPOXX is not expected to be satisfied prior to the adoption date of this standard in early 2018. As such, the Company does not expect adoption of this standard to have an impact on the timing of revenue recognition for the above-mentioned activities. Separately, the Company has determined that revenue for performance obligations associated with R&D activities will be recognized over time. With respect to these R&D activities, the Company expects to finalize the quantitative impact assessment upon the filing of its Annual Report on Form 10-K for the year ended December 31, 2017.

3. Procurement ~~Contract~~Contracts and Research Agreements

~~Procurement~~

19C BARDA Contract

On ~~May 13, 2011,~~ September 10, 2018, the Company ~~signed~~entered into a contract with the U.S. Biomedical Advanced Research and Development Authority ~~(“BARDA”~~("BARDA") pursuant to which SIGA agreed to deliver ~~two million~~up to 1,488,000 courses of oral TPOXX® to the U.S. Strategic ~~Stockpile. The contract with BARDA (as modified, the “BARDA Contract”~~National Stockpile ("Strategic Stockpile") ~~is worth approximately $472.3 million, including $409.8 million related~~, and to ~~the~~ manufacture and ~~delivery of 1.7 million courses of TPOXX® and $62.5 million of potential reimbursements connected to development and supportive activities (the “Base Contract”).~~

Under the Base Contract, BARDA has agreed to buy from the Company 1.7 million courses of TPOXX®. Additionally, the Company is required to contribute to BARDA 300,000 courses at no additional cost to BARDA. A total of 2.0 million courses of TPOXX® is required to be delivered to the Strategic Stockpile in order for the Company to be eligible to receive the $40.9 million hold back payment (see description of hold back payment below).

For courses of TPOXX® that are physically delivered to the Strategic Stockpile, the Company has replacement obligations, at no cost to BARDA, in the event that the final version of TPOXX® approved by the FDA is different from any courses of TPOXX® that have been delivereddeliver to the Strategic Stockpile, or ifstore as vendor-managed inventory, up to 212,000 courses of the intravenous (IV) formulation of TPOXX® ~~does not meet~~(“IV TPOXX®”). Additionally, the contract includes funding from BARDA for a range of activities, including: advanced development of IV TPOXX®, post-marketing activities for oral and IV TPOXX®, and procurement activities. As of June 30, 2022, the contract with BARDA (as amended, modified, or supplemented from time to time, the "19C BARDA Contract") contemplates up to approximately $602.5 million of payments, of which approximately $51.7 million of payments are included within the base period of performance of five years, approximately $239.7 million of payments are related to exercised options and up to approximately $311.1 million of payments are currently specified as unexercised options. BARDA may choose in its sole discretion when, or whether, to exercise any ~~specified label claims, fails release testing or does not meet~~of the ~~38-month expiry~~unexercised options. The period ~~(from~~of performance for options is up to ten years from the date of entry into the 19C BARDA Contract and such options could be exercised at any time during the contract term, including during the base period of performance.

The base period of performance specifies potential payments of approximately $51.7 million for the following activities: payments of approximately $11.1 million for the delivery of approximately 35,700 courses of oral TPOXX® to the Strategic ~~Stockpile)~~Stockpile; payments of $8.0 million for the manufacture of 20,000 courses of final drug product of IV TPOXX® ("IV FDP"), ~~or if TPOXX® is recalled or deemed~~of which $3.2 million of payments are related to the manufacture of bulk drug substance ("IV BDS") to be ~~recalled~~used in the manufacture of IV FDP; payments of approximately $32.0 million to fund advanced development of IV TPOXX®; and payments of approximately $0.6 million for ~~any reason.~~

supportive procurement activities. As of ~~September~~June 30, ~~2017,~~2022, the Company has received ~~$368.9~~$11.1 million ~~under~~for the ~~Base Contract related to the manufacture and physical~~ delivery of approximately 35,700 courses of TPOXX®. Included in this amount are 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 TPOXX®, an $8.2 million milestone payment in 2013 for the completion of the commercial validation campaign for TPOXX®, the $20.5 million milestone 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 and Safety 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~~$3.2 million for the manufacture of IV BDS, $4.3 million for the delivery of IV FDP to the Strategic Stockpile and $15.5 million for other base period activities. IV BDS has been used for the manufacture of courses of IV FDP. The $3.2 million received for the completed manufacture of IV BDS had been recorded as deferred revenue as of December 31, 2021, but with the delivery of IV FDP to the Strategic Stockpile during the six months ended June 30, 2022, $2.9 million was recognized as revenue. The remaining $0.3 million of deferred revenue will be recognized as IV FDP containing such IV BDS is delivered to the Strategic Stockpile.

the 2020 manufacture of certain courses of oral TPOXX®; payments up to $213.9 million for the delivery of up to 726,140 courses of oral TPOXX®; and payments of up to $14.6 million for funding of post-marketing activities for oral TPOXX®. As of ~~September~~June 30, 2017, the Company is eligible under the Base Contract to receive a $40.9 million hold back payment, which represents 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 TPOXX® under the Base Contract. The $40.9 million hold back payment would be triggered by FDA approval of TPOXX®2022, ~~as long as~~ the Company has ~~cumulatively~~ delivered ~~2.0~~approximately $225.1 million ~~courses~~(including the value of raw materials) of oral TPOXX® to the Strategic Stockpile, of which approximately $112.5 million was delivered in 2021;and $7.6 million has been received or billed for in connection with post-marketing activities for oral TPOXX®.

Unexercised options specify potential payments up to approximately $311.1 million in total (if all such options are exercised). There are options for the ~~Company does not have a continuing product replacement obligation~~following activities: payments of up to ~~BARDA.~~

As$225.1 million for the delivery of ~~September 30, 2017, the Company has delivered 2.0 million courses of~~oral TPOXX® to the Strategic ~~Stockpile. Courses delivered~~Stockpile; payments of up to $76.8 million for the manufacture of courses of IV FDP, of which up to $30.7 million of payments would be paid upon the manufacture of IV BDS to be used in the manufacture of IV FDP; payments of up to approximately $3.6 million to fund post-marketing activities for IV TPOXX®; and payments of up to approximately $5.6 million for supportive procurement activities.

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The options related to IV TPOXX® are divided into two primary manufacturing steps. There are options related to the manufacture of bulk drug substance (“IV BDS Options”), and there are corresponding options (for the same number of IV courses) for the manufacture of final drug product (“IV FDP Options”). BARDA may choose to exercise any, all, or none of these options in its sole discretion. The 19C BARDA Contract includes: three separate IV BDS Options, each providing for the bulk drug substance equivalent of 64,000 courses of IV TPOXX®; and three separate IV FDP Options, each providing for 64,000 courses of final drug product of IV TPOXX®. BARDA has the sole discretion as to whether to simultaneously exercise IV BDS Options and IV FDP Options, or whether to exercise options at different points in time (or alternatively, to only exercise the IV BDS Option but not the IV FDP Option). If BARDA decides to only exercise IV BDS Options, then the Company would receive payments up to $30.7 million; alternatively, if BARDA decides to exercise both IV BDS Options and IV FDP Options, then the Company would receive payments up to $76.8 million. For each set of options relating to a specific group of courses (for instance, the IV BDS and IV FDP options that reference the same 64,000 courses), BARDA has the option to independently purchase IV BDS or IV FDP.

Revenues in connection with the 19C BARDA Contract are recognized either over time or at a ~~dosage of 600 mg administered twice per day (1,200 mg per day). Courses delivered~~point in time. Performance obligations related to ~~the Strategic Stockpile are currently subject to a~~ product ~~replacement obligation.~~

~~Starting in 2015, product deliveries of TPOXX® have been~~delivery generate revenue at a ~~provisional dosage~~point in time. Revenue from other performance obligations under the 19C BARDA Contract are recognized over time using an input method using costs incurred to date relative to total estimated costs at completion. For the three months ended June 30, 2022 and 2021, the Company recognized revenues of ~~600 mg administered twice per day (1,200 mg per day)~~$1.3 million and $0.8 million, respectively, on an over time basis. For the six months ended June 30, 2022 and 2021, the Company recognized revenues of $1.9 million and $1.7 million, respectively, on an over time basis. Revenue recognized for product delivery, and therefore at a point in time, for the six months ended June 30, 2022 was $7.2 million. In contrast, no revenue was recognized for product delivery, and therefore 0 revenue was recognized at a point in time, for the three months ended June 30, 2022 or for the three and six months ended June 30, 2021. ~~This was~~

U.S. Department of Defense Procurement Contract (“DoD Contract”)

On May 12, 2022, the Company announced a ~~change from~~procurement contract with the ~~provisional dosage that was in effect when product deliveries were made in 2013~~U.S. Department of Defense (“DoD”). The DoD Contract includes a firm commitment for the DoD to procure approximately $3.6 million of oral TPOXX®, and ~~2014 (600 mg per day)~~an option, exercisable at the sole discretion of the DoD, for the procurement of approximately $3.8 million of oral TPOXX®. In ~~2013 and 2014,~~ the ~~provisional dosage~~second quarter of ~~courses delivered to the Strategic Stockpile was 600 mg administered once a day. The change in the provisional dosage was based on FDA guidance received by~~2022, the Company ~~in 2014, subsequent to~~delivered and recognized revenue of $3.6 million for the delivery of ~~1.3~~oral TPOXX® to the DoD and fulfilled the firm commitment order noted above.

International Procurement Contracts

This year, through July 31, the Company has received firm commitment orders from ten international jurisdictions (including Canada) for the delivery of approximately $60 million of oral TPOXX®, of which approximately $39 million is for Canada and approximately $21 million is for jurisdictions in Europe, Asia Pacific, Asia and the Middle East. Additionally, the contract with CDND (defined below) has an option, exercisable at the sole discretion of CDND, for the purchase of up to an additional $6 million of oral TPOXX®. With respect to the $60 million of firm commitment orders that have been received this year, approximately $5 million of oral TPOXX® was delivered in the three months ended June 30, 2022. Through an International Promotion Agreement (defined below), Meridian Medical Technologies, Inc. (“Meridian”) is the counterparty to international contracts under which orders are placed for the purchase of oral TPOXX®. The Public Health Agency of Canada (“PHAC”) and the Canadian Department of National Defence (“CDND”) are among the contracting parties for the purchase of oral TPOXX® (see below for a summary description of these contracts).

On January 13, 2021, PHAC awarded a contract to Meridian (the “PHAC Contract”) for the purchase of up to approximately $33 million of oral TPOXX® (tecovirimat) within five years. In March 2022 and July 2022, PHAC executed amendments in which total procurement of oral TPOXX® under the PHAC Contract was increased to an amount of approximately $45 million. Prior to 2022, approximately $10 million of oral TPOXX® had been ordered and delivered to PHAC. No courses of oral TPOXX®~~. Based on~~ were delivered under this contract for the ~~current provisional dosage~~firstsix months of ~~600 mg administered twice per day (1,200 mg per day),~~ 2022. In July 2022, $16 million of oral TPOXX® was delivered to PHAC. As of July 31, 2022, after the delivery of $16 million of oral TPOXX® in mid- July, there are approximately $19 million of firm commitment orders that remain to be delivered under this contract.

On April 3, 2020, the Company ~~supplemented previously~~announced that the CDND awarded a contract (the "Canadian Military Contract") to Meridian, pursuant to which the CDND would purchase up to approximately $14 million of oral TPOXX® over four years. Prior to 2022, approximately $4 million of oral TPOXX® had been ordered and delivered to CDND. No courses of oral TPOXX®, were delivered under this contract for the firstsix months of 2022. As of June 30, 2022, an approximate firm commitment order of $4 million remains to be delivered under this contract. Additionally, there are approximately $6 million of unexercised options, exercisable at ~~no cost to BARDA,~~the sole discretion of CDND, remaining under this contract.

The above-listed contract awards were coordinated between SIGA and Meridian under the international promotion agreement (as amended, the "International Promotion Agreement") that was entered into by the parties on June 3, 2019. Under the International Promotion Agreement, Meridian is the counterparty in connection with ~~additional dosages so that all~~international contracts for oral TPOXX® and SIGA is responsible for manufacture and delivery of any oral TPOXX® purchased thereunder.

Under the terms of the ~~courses previously delivered~~International Promotion Agreement, Meridian was granted exclusive rights to ~~BARDA are now at the current provisional dosage. In February 2016, the FDA confirmed (through dose concurrence) its earlier dosage guidance of 600 mg administered twice per day (1,200 mg per day).~~

~~In addition to the Base Contract, the BARDA Contract also separately contains $122.7 million of remaining options that, if exercised by BARDA: would result~~market, advertise, promote, offer for sale, or sell oral TPOXX® in a ~~$50.0 million payment to the Company~~field of use specified in the ~~event of FDA approval~~International Promotion Agreement in all geographic regions except for ~~extension~~the United States (the “Territory”), and Meridian has agreed not to ~~84-month expiry for TPOXX® (from 38-month expiry~~commercialize any competing product, as ~~required~~defined in the Base Contract); would fund up to $58.3 million of development and supportive activities such as work on a smallpox prophylaxis indication for TPOXX®; and/or would fund $14.4 million of production-related activities related to warm-base manufacturing. In 2015, BARDA exercised two options related to extending the indication of the drug to the geriatric and pediatric populations. The stated value of these exercises was minimal. BARDA may choose not to exercise additional optionsInternational Promotion Agreement, in the ~~future. Options are exercisable by BARDA at its sole discretion. BARDA has indicated that it will evaluate, after the FDA’s review and evaluation~~specified field of ~~stability data, the Company's request that BARDA exercise the option for the $50.0 million payment to the Company~~use in the ~~event of FDA approval of 84-month expiry for~~Territory. SIGA retains ownership, intellectual property, distribution and supply rights and regulatory responsibilities in connection with TPOXX®.

~~The BARDA Contract expires~~, and, in ~~September 2020.~~

~~The BARDA Contract is a multiple deliverable arrangement comprising delivery of courses~~the United States market, also retains sales and ~~covered research and development activities. The BARDA Contract provides certain product replacement~~marketing rights with respect to ~~delivered courses. For this reason, recognition of revenue that might otherwise occur upon delivery of courses~~oral TPOXX®. SIGA’s consent is ~~expected~~required for the entry into any sales arrangement pursuant to ~~be deferred until~~ the ~~Company’s obligations related~~International Promotion Agreement.

The fee Meridian retains pursuant to ~~potential replacement of delivered courses are satisfied. The Company assessed~~ the ~~selling price for each~~International Promotion Agreement is a specified percentage of the ~~aforementioned deliverables - research and development activities and drug product. The selling price~~collected proceeds of sales of oral TPOXX® net of certain ~~reimbursed research~~expenses, for calendar years in which customer collected amounts net of such expenses are less than or equal to a specified threshold, and ~~development services was determined by reference to existing~~a higher specified percentage of such collected net proceeds for calendar years in which such net collected amounts exceed the specified threshold. It is probable that we will exceed the specified threshold in 2022 and, ~~past research and development grants and contracts between~~as a result, the Company and various government agencies. The selling price of drug product was determined by reference to other companies’ sales of drug products such as antiviral therapeutics, orphan drugs and drugs with potential life-saving impact similar to TPOXX®, including products delivered to the Strategic Stockpile.

~~The Company~~ has ~~recognized revenue for reimbursement of certain BARDA Contract research and development services. Cash inflows related to delivery of courses are~~ recorded as deferred revenue. In addition, direct costs incurred by the Company to fulfill the delivery of courses including the supplementing of courses previously delivered under the BARDA Contract are being deferred and will ~~be recognized as expenses over~~continue to record the ~~same period that the related deferred revenue is recognized as revenue.~~

~~As of September 30, 2017 and December 31, 2016, deferred direct costs under the BARDA Contract of approximately $96.4 million and $72.2 million, respectively, are included~~higher specified percentage for all International Promotion Agreement sales in ~~deferred costs on the consolidated balance sheets. As of September 30, 2017, the Company recorded $377.4 million of deferred revenue. Deferred revenue has been recorded~~2022.

Revenue in connection with international procurement contracts for the delivery of ~~courses of TPOXX® to~~product are recognized at a point in time on a gross basis, as the ~~Strategic Stockpile~~Company acts as the principal in the transaction. During the three and ~~certain supportive services provided as part of the BARDA Contract. For the three and nine~~six months ended ~~September~~June 30, ~~2017, revenue from reimbursed research~~2022, the Company recognized $5.0 million of sales in connection with international contracts. During the three and ~~development under~~six months ended June 30, 2021, the ~~BARDA Contract was $641,000~~Company recognized $6.9 million and ~~$8.3~~$10.3 million ~~respectively.~~of sales, respectively, for delivery to PHAC.

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Research Agreements and Grants

~~The~~

In July 2019, the Company ~~obtains funding~~was awarded a multi-year research contract valued at a total of $19.5 million, with an initial award of $12.4 million, from the ~~contracts and grants it obtains from various agencies of the U.S. Government~~DoD to support ~~its research~~work in pursuit of a potential label expansion for oral TPOXX® that would include post-exposure prophylaxis ("PEP") of smallpox (such work known as the "PEP Label Expansion Program" and development activities. Currently, the Company has one contract with an expiration date of December 30, 2020 and one grant with an expiration date of April 30, 2018, which in combination provide for potential future aggregate research and development funding for specific projects of approximately $15.4 million. During the three months ended March 31, 2017, the contract ~~was amended~~referred to ~~increase~~as the "PEP Label Expansion R&D Contract"). In subsequent modifications, the DoD increased the scope and the available funding ~~for~~under the PEP Label Expansion R&D ~~program related~~Contract to ~~the IV formulation of TPOXX® by~~ approximately ~~$10.1 million and to extend the end date of the~~$27 million. The period of performance ~~from~~ for this contract, as modified, terminates on January 31, 2025. As of June 30, ~~2020~~2022, remaining revenue to ~~December~~be recognized in the future under the PEP Label Expansion R&D Contract is up to $15.4 million. Revenue from the performance obligation under the PEP Label Expansion R&D Contract is recognized over time using an input method using costs incurred to date relative to total estimated costs at completion. For the three months ended June 30, ~~2020.~~

~~The funded amount includes,~~2022 and 2021, the Company, under the PEP Label Expansion R&D Contract, recognized revenue of $6.6 million and $0.5 million, respectively, on an over time basis. For the six months ended June 30, 2022 and 2021, the Company, under the PEP Label Expansion R&D Contract, recognized revenue of $8.9 million and $0.6 million, respectively, on an over time basis.

Contracts and grants include, among other things, options that may or may not be exercised at the U.S. Government’s discretion. Moreover, ~~the contract~~contracts and ~~grant~~grants contain customary terms and conditions including the U.S. Government’s right to terminate or restructure a contract or grant for convenience at any time. As such, we the Company may not be ~~able~~eligible to ~~utilize~~receive all available ~~funds under the contract and/or grant.~~funds.

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4.Inventory

~~Due~~

Inventory includes costs related to the ~~deferral~~manufacture of ~~revenue under the BARDA Contract (see~~ ~~Note 3~~ for additional information), amounts that would be otherwise recorded as cost of goods sold for delivered courses are recorded as deferred costs on the balance sheet. The value of inventory represents the costs incurred to manufacture TPOXX®.

Inventory consisted of the following:

	*As of*
	*June 30, 2022*		*December 31, 2021*
Raw materials	$	22,047	$	22,047
Work in-process		9,287,024		17,453,358
Finished goods		7,122,311		2,034,974
Inventory	$	16,431,382	$	19,510,379

As of
September 30, 2017 December 31, 2016
Work in-process $ 2,025,445
$ 18,916,084
Finished goods 957,804
7,293,880
Inventory $ 2,983,249
$ 26,209,964

~~For the~~ ~~three and nine months ended September 30, 2017, research and development expenses include net inventory-related losses of approximately $0 and $536,000~~, respectively. The $536,000 loss for the nine months ended September 30, 2017 relates to a $686,000 inventory write-down, partially offset by credits received from contract manufacturing organizations (“~~CMO~~”) ~~in connection with the inventory write-down.~~

5.Property, Plant and Equipment

Property, plant and equipment consisted of the following:

As of
September 30, 2017 December 31, 2016
Leasehold improvements $ 2,420,028
$ 2,542,044
Computer equipment 655,880
770,479
Furniture and fixtures 363,588
455,220
3,439,496
3,767,743
Less - accumulated depreciation (3,319,761 ) (3,468,266 )
Property, plant and equipment, net $ 119,735
$ 299,477

	*As of*
	*June 30, 2022*			*December 31, 2021*
Leasehold improvements	$	2,420,028		$	2,420,028
Computer equipment		473,386			511,062
Furniture and fixtures		377,859			377,859
Operating lease right-of-use assets		3,678,647			3,678,647
		6,949,920			6,987,596
Less - accumulated depreciation and amortization		(4,840,200	)		(4,621,639	)
Property, plant and equipment, net	$	2,109,720		$	2,365,957

Depreciation and amortization expense on property, plant, and equipment was ~~$29,375 and $42,660~~$0.3 million for each of the ~~three~~six months ended ~~September~~June 30, ~~2017~~ 2022 and ~~2016, respectively, and was $105,212 and $130,704 for nine months ended September 30, 2017 and 2016, respectively. In connection with the lease termination discussed in~~ ~~Note 12, the Company wrote off $129,000 of leasehold improvements and furniture and fixtures during the three and nine months ended September 30, 2017.~~2021.

6.Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

	*As of*
	*June 30, 2022*		*December 31, 2021*
Deferred revenue	$	7,035,354	$	3,764,696
Research and development vendor costs		3,657,403		256,397
Compensation		1,424,067		2,811,700
Other		934,745		938,082
Professional fees		808,246		527,026
Lease liability, current portion		507,140		466,830
Inventory		477,875		488,081
Accrued expenses and other current liabilities	$	14,844,830	$	9,252,812

As of
September 30, 2017 December 31, 2016
Bonus $ 1,676,745
$ 2,357,194
Professional fees 661,194
481,641
Vacation 333,675
262,664
Other (primarily R&D vendors and CMOs) 1,649,380
1,483,253
Accrued expenses and other current liabilities $ 4,320,994
$ 4,584,752

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7.Financial Instruments

2016 Warrant

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”). The Company voluntarily prepaid this Loan Agreement in2020. Upon such prepayment and release, the Loan Agreement was terminated. In connection with the entry into the Loan Agreement, ~~(see~~ ~~Note 8~~ ~~for additional information),~~ the Company issued a warrant (the “~~Warrant~~”“Warrant”) to the Lender on September 2, 2016 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 ~~has been~~was set at $1.50 per ~~share.~~

~~The Company accounted for~~share, and there were 2.7 million shares underlying the Warrant. Taking into account partial exercises of the Warrant, ~~in accordance with~~there were approximately 1.0 million shares underlying the ~~authoritative guidance which requires that free-standing derivative financial instruments with certain anti-dilution features be classified~~outstanding Warrant as ~~assets or liabilities at~~of December 31, 2021.

During the ~~time~~three months ended June 30, 2022, the Warrant was fully exercised, and therefore there are 0 remaining underlying shares as of June 30, 2022. See Note 8. For the ~~transaction, and~~three months ended June 30, 2022, we recorded ~~at their fair value. Any changes~~a gain of approximately $50,000, reflecting a decrease in the fair value of the ~~derivative instruments are reported~~liability-classified warrant primarily due to the decrease in ~~earnings or loss as long as~~our stock price prior to the ~~derivative contracts are classified as assets or liabilities. Accordingly, the Company classified the Warrant as a liability and reported the change in fair value in the statement of operations.~~

~~On September 2, 2016, the issuance date~~exercise 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. These models generated substantially equal fair values for the Warrant. ~~As such, the Company utilized a Black-Scholes model for September 30, 2017 to determine the fair value of the Warrant.~~

As of ~~September 30, 2017,~~December 31, 2021, there were approximately 1.0 million shares underlying the outstanding Warrant and the fair value of the Warrant was ~~$7.4~~$6.5 million. ~~A Black Scholes model was applied to calculate the~~The fair value of the ~~liability classified~~liability-classified Warrant was calculated using the following assumptions: ~~risk free~~risk-free interest rate of ~~2.29%~~1.21%;no dividend yield; an expected life of ~~8.92~~4.7 years; and a volatility factor of ~~80%~~55%.

~~For the three and nine months ended September 30, 2017, the Company recorded a loss of $295,771 and $627,624, respectively as a result of the change in fair value of the liability classified Warrant.~~

~~Rights Offering~~

On November 16, 2016, the Company completed a rights offering (the “Rights Offering”), pursuant to which it raised approximately $35.3 million in gross proceeds through the sale of 23,523,195 shares of its common stock. The Rights Offering was made pursuant to a registration statement on Form S-1 and declared effective by the SEC on October 21, 2016. As part of the Rights Offering, each stockholder of the Company received a subscription right for each share of common stock owned as of the record date of October 12, 2016. Each subscription right entitled its holder to invest $0.65 towards the purchase of shares of the Company's common stock at a subscription price equal to the lower of $1.50 or 85% of the volume weighted average price of Company shares during market hours on the expiration date of the Rights Offering. The Rights Offering expired on November 8, 2016. Through basic subscriptions and oversubscriptions, the Rights Offering was fully subscribed. The subscription price was set at $1.50. The Company used the net proceeds of the Rights Offering, together with proceeds from the Loan Agreement and cash on hand, to fully satisfy PharmAthene's claim under the plan of reorganization.

~~Rights Offering - Backstop Agreement~~

On October 13, 2016, in connection with the Rights Offering as discussed above, the Company entered into an investment agreement or “backstop agreement”, with an affiliate of MacAndrews & Forbes Incorporated (“M&F”), and certain other backstop parties (the “Backstop Parties”). Under the terms of the backstop agreement, the Backstop Parties agreed to purchase, pursuant to a separate private placement, a number of shares of common stock equal to the numbers of shares that were not subscribed for in the Rights Offering. The backstop agreement provided that the subscription price for the Backstop Parties would be equal to the subscription price applicable to all shareholders under the Rights Offering. Because the Rights Offering was fully subscribed, the Backstop Parties were not required to draw on such commitment. The Company issued 708,530 shares to Backstop Parties, of which approximately 565,000 shares were received by M&F, in payment of the five percent backstop fee ($1,764,240) payable to the Backstop Parties in connection with the backstop agreement. When shares were issued to the Backstop Parties in payment of the backstop fee, the stock price of SIGA common stock was $2.49 per share (the closing price of the Company’s common stock on November 16, 2016). The fair value of the shares issued in satisfaction of the backstop fee was expensed to the income statement in the fourth quarter of 2016. There are no remaining payment obligations to the Backstop Parties under the Backstop Agreement.

8. ~~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 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 on November 16, 2016. As part of the satisfaction of the PharmAthene 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 may 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 to PharmAthene as part of the final payment to satisfy the PharmAthene claim. Interest on the Term Loan is at a per annum rate equal to the Adjusted LIBOR rate plus 11.5%, subject to adjustments as set forth in the Loan Agreement. At September 30, 2017, the effective interest rate on the Term Loan, which includes interest payments and accretion of unamortized costs and fees, was 18.6%. The Company incurred approximately $3.7 million of interest expense during the three months ended September 30, 2017, of which $2.6 million was paid from restricted cash and the remaining $1.1 million accreted to the Term Loan balance. For the nine months ended September 30, 2017, the Company incurred approximately $11.0

~~million of interest expense, of which $7.6 million was paid from restricted cash and the remaining $3.4 million accreted to the Term Loan balance.~~

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 aforementioned minimum cash requirement is $10.0 million for the remainder of 2017 and will reduce to $5.0 million for 2018 until the earlier of (i) December 31, 2018 and (ii) 45 days after FDA approval of TPOXX®; thereafter, the minimum cash requirement will be $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 September 30, 2017, 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 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 using the effective interest method over the life of the related Term Loan. 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 September 30, 2017, the Term Loan balance is $69.9 million.

9.Fair Value of Financial Instruments

The carrying value of cash ~~and cash equivalents, restricted cash and cash~~ equivalents, accounts receivable, accounts payable, ~~and~~ accrued expenses and other current liabilities, and income tax payable approximates fair value due to the relatively short maturity of these instruments. ~~Common~~Prior to being fully exercised, common stock warrants, which ~~are~~were classified as ~~liabilities are~~a liability, were 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:

~~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.~~

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 $7.4 million at September 30, 2017.~~

At September 30, 2017, the fair value of the debt was $73.2 million and the carrying value of the debt was $69.9 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. This valuation required significant judgment.

•

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.

There were no transfers between levels of the fair value hierarchy for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022.

As of each of June 30, 2022 and December 31, 2021, the Company had approximately $0.1 million of cash equivalents classified as Level 1 financial instruments. There were 0 Level 2 financial instruments as of June 30, 2022.

The following table presents changes in the ~~liability classified~~liability-classified warrant measured at fair value using Level 3 inputs:

	*Fair Value Measurements of Level 3 liability-classified warrant*
Warrant liability at December 31, 2021	$	6,521,441
Decrease in fair value of Warrant liability		(400,663	)
Exercise of Warrant		(6,120,778	)
Warrant liability at June 30, 2022	$	0

Fair Value Measurements of Level 3 liability classified warrant
Warrant liability at December 31, 2016 $ 6,727,409
Increase in fair value of warrant liability 627,624
Warrant liability at September 30, 2017 $ 7,355,033

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~~10.~~

9.Per Share Data

The Company computes, presents and discloses earnings per share in accordance with the authoritative guidance, which specifies the computation, presentation and disclosure requirements for earnings per share of entities with publicly held common stock or potential common stock. The objective of basic EPS is to measure the performance of an entity over the reporting period by dividing income (loss) by the weighted average shares outstanding. The objective of diluted EPS is consistent with that of basic EPS, except that it also gives effect to all potentially dilutive common shares outstanding during the period.

The following is a reconciliation of the basic and diluted loss per share computation:

	*Three Months Ended June 30,*					*Six Months Ended June 30,*
	*2022*		*2021*			*2022*		*2021*
Net income/(loss) for basic earnings per share	$	2,037,062	$	169,200		$	1,676,012	$	(642,905	)
Less: Change in fair value of warrants and cash-based RSUs		49,559		428,128			400,663		1,346,929
Net income/(loss), adjusted for change in fair value of warrants and cash-based RSUs for diluted earnings per share	$	1,987,503	$	(258,928	)	$	1,275,349	$	(1,989,834	)
Weighted-average shares		72,678,333		75,810,641			72,873,366		76,281,211
Effect of potential common shares		654,555		849,413			825,860		847,762
Weighted-average shares: diluted		73,332,888		76,660,054			73,699,226		77,128,973
Income/(loss) per share: basic	$	0.03	$	0.00		$	0.02	$	(0.01	)
Income/(loss) per share: diluted	$	0.03	$	(0.00	)	$	0.02	$	(0.03	)

For the three and six months ended June 30, 2022, the diluted earnings per share calculation reflects the effect of the exercise of outstanding warrants and any corresponding elimination of the impact included in operating results from the change in fair value of the warrants. Weighted-average diluted shares include the dilutive effect of in-the-money options, stock-settled RSUs and warrants. The dilutive effect of warrants, stock-settled RSUs and options is calculated based on the average share price for each fiscal period using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options, the average amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax benefits that would be recorded in additional paid-in capital when the award becomes deductible, are collectively assumed to be used to repurchase shares. Cash-settled RSUs were presumed to be cash-settled and therefore excluded from the diluted earnings per share calculations for the three and six months ended June 30, 2022 because the net effect of their inclusion, including the elimination of the impact in the operating results of the change in fair value of these RSUs, would have been anti-dilutive. For the three and six months ended June 30, 2022, the weighted average number of shares under the cash-settled RSUs excluded from the calculation of diluted earnings per share were 51,930 and 53,353, respectively.

For the three and six months ended June 30, 2021, the Company incurred losses ~~for the three and nine months ended September 30, 2017 and 2016~~ and as a result, the equity instruments listed below ~~are~~were excluded from the calculation of diluted earnings (loss) per share as the effect of the exercise, conversion or vesting of such instruments would behave been anti-dilutive. The weighted average number of equity instruments excluded consists of:

	*Three Months Ended June 30,*		*Six Months Ended June 30,*
	*2021*		*2021*
Stock options		123,667		154,617
Restricted stock units (stock settled)		166,683		165,309

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Stock Options 1,200,123
1,756,967
1,485,466
1,802,277

Stock-Settled Stock Appreciation Rights 360,031
360,031
360,031
360,125

Restricted Stock Units 1,472,001
586,675
(1 ) 1,371,364
603,427

Warrants 2,690,950
840,579
(2 ) 2,690,950
282,238
(2 )

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.

~~(1) Included 313,337 restricted stock units that had vested but had not converted into common stock.~~

~~(2) For the three and nine months ended September 30, 2016, the weighted average number of shares that could be purchased with the Warrant issued on September 2, 2016.~~

~~11.~~ 10.Commitments and Contingencies

After several years of proceedings in litigation initiated by PharmAthene in 2006, the Delaware Court of Chancery on August 8, 2014 issued an opinion and order in which it determined, among other things, that PharmAthene was entitled to a lump sum damages award for its lost profits including interest and fees, based on SIGA’s contract with BARDA for the purchase of 2.0 million courses of TPOXX® which was allegedly anticipated as of December 2006. On September 16, 2014, as a consequence of SIGA’s chapter 11 filing, the legal proceedings with PharmAthene were stayed (see ~~Note 1~~), except that the parties agreed by stipulation approved by the Court on October 8, 2014 that the litigation could proceed. On January 15, 2015, the Delaware Court of Chancery entered its Final Order and Judgment (the “~~Final Order and Judgment~~”) awarding PharmAthene approximately $195.0 million, including pre-judgment interest up to January 15, 2015 (the “Outstanding Judgment”). On December 23, 2015 the Delaware Supreme Court affirmed the Outstanding Judgment. Pursuant to the Final Order and Judgment, SIGA also was liable to PharmAthene for $30,663.89 per day in post-judgment interest. On a series of dates up to and including a final payment on November 16, 2016, the Company paid PharmAthene an aggregate of $217.0 million to fully satisfy the Outstanding Judgment, including post-judgment interest, in accordance with the bankruptcy plan of reorganization.

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.

Purchase Commitments

In the course of our business, the Company regularly enters into agreements with third party organizations to provide contract manufacturing services and research and development services. Under these agreements, the Company issues purchase orders, which obligate the Company to pay a specified price when agreed-upon services are performed. In connection with many CMO purchase orders, reimbursement by CMOs for inventory losses is limited. Commitments under the purchase orders do not exceed our planned commercial and research and development needs. As of June 30, 2022, the Company had approximately $21.7 million of purchase commitments associated with manufacturing obligations.

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~~12.~~

11.Related Party Transactions

Board of Directors and Outside Counsel

A former member of the Company’s Board of Directors who did not stand for re-election at the Company's 2021 annual meeting of stockholders is a ~~member of~~partner at a law firm used by the ~~Company’s~~Company. The Company did not incur any expenses related to services provided by the outside ~~counsel.~~counsel during the three months ended June 30, 2022 and 2021 or the six months ended June 30, 2022. During the ~~three~~six months ended ~~September~~June 30, ~~2017 and 2016,~~2021, the Company incurred ~~expenses~~$0.1 million of ~~$82,000 and $528,000, respectively,~~expenses related to services provided by the outside counsel. ~~During the nine months ended September 30, 2017 and 2016, the~~The Company ~~incurred~~had 0 outstanding payables or accrued expenses ~~of $298,000 and $1,066,000, respectively,~~ related to services ~~provided~~performed by the outside ~~counsel. On September~~counsel as of June 30, ~~2017 the Company’s outstanding payables and accrued expenses included a $76,000 liability to the outside counsel.~~

~~Rights Offering-Backstop Agreement~~

On October 13, 2016, in connection with the Rights Offering as discussed above, the Company entered into the Backstop Agreement with an affiliate of M&F and the other Backstop Parties. Under the terms of the Backstop Agreement, the Backstop Parties agreed to purchase, pursuant to a separate private placement, a number of shares of common stock equal to the numbers of shares that would have not been subscribed for in the Rights Offering. The Backstop Agreement provided that the subscription price for the Backstop Parties would be equal to the subscription price applicable to all shareholders under the Rights Offering. Because the Rights Offering was fully subscribed, the Backstop Parties were not required to draw on such commitment. The Company issued 708,530 shares to Backstop Parties, of which approximately 565,000 shares were received by M&F, in payment of the five percent backstop fee ($1,764,240) payable to the Backstop Parties in connection with the backstop agreement. When shares were issued to the Backstop Parties in payment of the backstop fee, the stock price of SIGA common stock was $2.49 per share (the closing price of the Company’s common stock on November 16, 2016)2022. The fair value of the shares issued in satisfaction of the backstop fee was expensed to the income statement in 2016. There are no remaining payment obligations to the Backstop Parties under the Backstop Agreement.

Real Estate Leases

On May 26, 2017, the Company and MacAndrews & Forbes Incorporated (“M&F”) entered into a ~~ten-year~~ten-year Office Lease agreement (the ~~“New HQ~~“HQ Lease”), pursuant to which the Company agreed to lease 3,200 square feet at 2731 East 62^nd Street, New York, New York. The Company is utilizing premises leased under the ~~New~~ HQ Lease as its new corporate headquarters. The Company's rental obligations consist of a fixed rent of $25,333 per month in the firstsixty-three months of the term, subject to a rent abatement for the firstsix 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~~was $3,333 per month for the second year of the term and ~~increasing~~increases by five percent each year thereafter, to $4,925 per month in the final year of the term. During the three and six months ended June 30, 2022, the Company paid expenses associated with this lease of $0.1 million and $0.2 million, respectively.

12.Revenues by Geographic Region

Revenues by geographic region were as follows:

	*Three Months Ended June 30,*				*Six Months Ended June 30,*
	*2022*		*2021*		*2022*		*2021*
United States	$	11,715,302	$	1,673,083	$	22,254,602	$	2,911,455

International
Asia-Pacific		4,929,423		0		4,929,423		0
Canada		0		6,980,206		0		10,555,578
Other		22,320		0		22,320		0
Total International		4,951,743		6,980,206		4,951,743		10,555,578

Total revenues	$	16,667,045	$	8,653,289	$	27,206,345	$	13,467,033

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13.Income Taxes

The Company’s provision for income taxes consists of federal and state taxes, as applicable, in amounts necessary to align the Company’s year-to-date tax provision with the effective rate that it expects to achieve for the full year. Each quarter the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as necessary.

For the three months ended June 30, 2022 and 2021, we incurred pre-tax income of $3.2 million and $0.5 million, respectively, and a corresponding income tax provision of $1.2 million and $0.3 million, respectively.

For the six months ended June 30, 2022 and 2021, we incurred pre-tax income of $2.1 million and losses of ($0.6) million, respectively, and a corresponding income tax provision of $0.5 million and $0.1 million, respectively.

The effective tax rate for the three months ended June 30, 2022 was 36.2% compared to 63.8% for the three months ended June 30, 2021. The effective tax rate for the three months ended June 30, 2022 differs from the U.S. statutory rate of 21% primarily as a result of state taxes, various non-deductible expenses, including executive compensation under Internal Revenue Code Section 162(m) and a non-taxable adjustment for the fair market value of the Warrant.

The effective tax rate for the six months ended June 30, 2022 was 21.2% compared to (11.3)% for the six months ended June 30, 2021. The effective tax rate for the six months ended June 30, 2022 differs from the U.S. statutory rate of 21% primarily as a result of state taxes, various non-deductible expenses, including executive compensation under Internal Revenue Code Section 162(m) and a non-taxable adjustment for the fair market value of the Warrant.

14. Equity

The tables below present changes in stockholders' equity for the three and six months ended June 30, 2022 and 2021.

	Common Stock						Additional Paid-in			Accumulated			Other Comprehensive		Total Stockholders'
	Shares			Amount			Capital			Deficit			Income		Equity
Balances at March 31, 2022		72,566,367		$	7,256		$	226,426,529		$	(58,696,989	)	$	0	$	167,736,796
Net income					0			0			2,037,062			0		2,037,062
Repurchase of common stock		(494,979	)		(49	)		0			(3,576,873	)		0		(3,576,922	)
Issuance of common stock upon vesting of RSUs		127,856			13			(13	)		0			0		0
Issuance of common stock upon exercise of warrants		824,903			82			6,120,696			0			0		6,120,778
Cash dividend ($0.45 per share)		—			0			0			(32,944,314	)		0		(32,944,314	)
Stock-based compensation		—			0			395,454			0			0		395,454
Balances at June 30, 2022		73,024,147		$	7,302		$	232,942,666		$	(93,181,114	)	$	0	$	139,768,854

	Common Stock						Additional Paid-in			Accumulated			Other Comprehensive		Total Stockholders'
	Shares			Amount			Capital			Deficit			Income		Equity
Balances at December 31, 2021		73,543,602		$	7,354		$	226,070,308		$	(51,763,255	)	$	0	$	174,314,407
Net income		—			0			0			1,676,012			0		1,676,012
Repurchase of common stock		(1,474,781	)		(147	)		0			(10,149,557	)		0		(10,149,704	)
Payment of common stock tendered for employee stock-based compensation tax obligations		(1,973	)		0			(12,533	)		0			0		(12,533	)
Issuance of common stock upon vesting of RSUs		132,396			13			(13	)		0			0		0
Issuance of common stock upon exercise of warrants		824,903			82			6,120,696			0			0		6,120,778
Cash dividend ($0.45 per share)		—			0			0			(32,944,314	)		0		(32,944,314	)
Stock-based compensation		—			0			764,208			0			0		764,208
Balances at June 30, 2022		73,024,147		$	7,302		$	232,942,666		$	(93,181,114	)	$	0	$	139,768,854

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	*Common Stock*						*Additional Paid-in*			*Accumulated*			*Other Comprehensive*		*Total Stockholders'*
	*Shares*			*Amount*			*Capital*			*Deficit*			*Income*		*Equity*
Balances at March 31, 2021		76,240,439		$	7,625		$	225,211,481		$	(102,534,239	)	$	0	$	122,684,867
Net income		—			0			0			169,200			0		169,200
Repurchase of common stock		(956,022	)		(96	)		0			(6,600,414	)		0		(6,600,510	)
Issuance of common stock upon vesting of RSUs		105,000			10			(10	)		0			0		0
Stock-based compensation		—			0			467,405			0			0		467,405
Balances at June 30, 2021		75,389,417		$	7,539		$	225,678,876		$	(108,965,453	)	$	0	$	116,720,962

	*Common Stock*						*Additional Paid-in*			*Accumulated*			*Other Comprehensive*		*Total Stockholders'*
	*Shares*			*Amount*			*Capital*			*Deficit*			*Income*		*Equity*
Balances at December 31, 2020		77,195,704		$	7,720		$	224,978,430		$	(95,192,881	)	$	0	$	129,793,269
Net loss		—			0			0			(642,905	)		0		(642,905	)
Repurchase of common stock		(1,913,927	)		(191	)		0			(13,129,667	)		0		(13,129,858	)
Payment of common stock tendered for employee stock-based compensation tax obligations		(1,902	)		0			(13,361	)		0			0		(13,361	)
Issuance of common stock upon vesting of RSUs		109,542			10			(10	)		0			0		0
Stock-based compensation		—			0			713,817			0			0		713,817
Balances at June 30, 2021		75,389,417		$	7,539		$	225,678,876		$	(108,965,453	)	$	0	$	116,720,962

On ~~July~~August 2, 2021, the Company's Board of Directors authorized a share repurchase program ("New Repurchase Authorization") under which the Company may repurchase up to $50 million of the Company's common stock through December 31, 2023. The Company started repurchasing shares under this program in the fourth quarter of 2021. Repurchases under the New Repurchase Authorization may be made from time to time at the Company's discretion in open market transactions, through block trades, in privately negotiated transactions and pursuant to any trading plan that may be adopted by the Company's management in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise. The timing and actual number of shares repurchased will depend on a variety of factors, including: timing of exercise of procurement options under government contracts; alternative opportunities for strategic uses of cash; the stock price of the Company’s common stock; market conditions; alternative capital management uses of cash; and other corporate liquidity requirements and priorities. During the three and six months ended June 30, 2022, the Company repurchased approximately 0.5 million and 1.5 million shares of common stock under the New Repurchase Authorization for approximately $3.6 million and $10.1 million, respectively.

Prior to the effective date of the New Repurchase Authorization, the Company repurchased shares under a program that was announced in March 2020. Under this program, $50 million of the Company's common stock was repurchased, including approximately 1.0 million shares of common stock for approximately $6.6 million that was repurchased during the three months ended June 30, 2021, and 1.9 million shares of common stock for approximately $13.1 million that was repurchased during the six months ended June 30, 2021.

On May 5, 2022, the Board of Directors declared a special dividend of $0.45 per share on the common stock of the Company, which resulted in an overall dividend payment of $32.9 million. The special dividend was paid on June 2, 2022 to shareholders of record at the close of business on May 17, 2022.

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15. Leases

The Company leases its Corvallis, Oregon, facilities and office space under an operating lease, which was signed on November 3, 2017 and commenced on January 1, 2018. The initial term of this lease was to expire on December 31, 2019 after which the Company had two successive renewal options; one for two years and the other for three years. In the second quarter of 2019, the Company exercised the first renewal option, which extended the lease expiration date to December 31, 2021. In the second quarter of 2021, the Company exercised the second renewal option, which extended the lease expiration date to December 31, 2024. In connection with the exercise of the second renewal option, the Company recorded an increase to operating lease right-of-use assets and operating lease liabilities of approximately $0.7 million in the second quarter 2021.

On May 26, 2017 the Company and M&F entered into the HQ Lease, a ~~Termination of Sublease Agreement (the “Old HQ Sublease Termination Agreement”),~~ten-year office lease agreement, pursuant to which the Company ~~and M&F~~ agreed to ~~terminate the sublease dated January 9, 2013 for 6,676~~lease 3,200 square feet ~~of rental square footage located at 660 Madison Avenue, Suite 1700,~~in 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.York. 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 fixed rent and Additional Rent (as defined below)~~is utilizing premises leased under the Old HQ Overlease (as defined below) and the sum of fixed rent and Additional 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.

Under the Old HQ Sublease, the Company was obligated to pay fixed rent of approximately $60,000 per month until August 2018 and approximately $63,400 per month thereafter until the Old HQ Sublease expiration date of August 31, 2020. Additionally, the Company was obligated to pay certain operating expenses and taxes (“Additional Rent”), such Additional Rent being specified in the overlease between M&F and the landlord at 660 Madison Avenue (the “Old HQ Overlease”).

~~Under the Replacement M&F Sublease, the subtenant’s rental obligations are excused for the first two (2) months of the lease term (“Rent Concession Period~~”). Thereafter, the subtenant is obligated to pay fixed rent of $36,996 per month for the first twelve (12) months, $37,831 per month for the next 12 months, and $38,665 per month until the scheduled expiration of the Replacement M&F Sublease on August 24, 2020. In addition to fixed rent, the subtenant is also obligated to pay, pursuant to the Replacement M&F Sublease, a portion of the Additional Rent specified in the Old HQ Overlease.

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 $0.9 million combined in fixed rent and additional amounts payable under the New HQ Lease ~~and a total of approximately $1.1~~as its corporate headquarters. The Company has no leases that qualify as finance leases.

Operating lease costs totaled $0.1 million ~~in Rent Discrepancy under the Old HQ Sublease Termination Agreement,~~ for a cumulative total of $2.0 million. In contrast, fixed rent and estimated Additional Rent under the Old HQ Sublease, for the aforementioned time period, would have been a total of approximately $2.4 million if each of the ~~New HQ Lease, Replacement M&F Sublease~~ three months ended June 30, 2022 and ~~Old HQ Sublease Termination Agreement had not been entered into by~~2021. Operating lease costs totaled $0.3 million for each of the ~~parties thereto. Because~~six months ended June 30, 2022 and 2021. Cash paid for amounts ~~such as~~included in the measurement of lease liabilities from operating ~~expenses and taxes may vary, the foregoing totals can only be estimated at this time and are subject to change.~~

~~As a result~~cash flows was $0.2 million for each of the ~~above-mentioned transactions, the Company has discontinued usage of Old HQ~~three months ended June 30, 2022 and 2021. Cash paid for amounts included in the ~~third quarter~~measurement of ~~2017. As such, during~~lease liabilities from operation cash flows was $0.3 million for each of the ~~three~~six months ended ~~September~~June 30, ~~2017~~2022 and 2021. As of June 30, 2022, 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~~weighted-average remaining lease term of the ~~old HQ Sublease. The Company also wrote-off approximately $0.1 million~~Company’s operating leases was 4.10 years while the weighted-average discount rate was 4.53%.

Future cash flows under operating leases as of ~~leasehold improvements and furniture and fixtures related~~June 30, 2022 are expected to ~~the Old HQ.~~

~~The following table summarizes activity relating to the liability that was recorded~~be as ~~a result of the lease termination:~~

Lease Termination liability
Balance at December 31, 2016 $ —
Charges (recorded in the quarter ended September 30) 1,096,648
Cash payments, net of sublease income (206,457 )
Balance at September 30, 2017 $ 890,191

follows:

2022	$	272,625
2023		669,048
2024		678,627
2025		406,994
2026		409,971
Thereafter		165,916
Total undiscounted cash flows under leases		2,603,181
Less: Imputed interest		(251,805	)
Present value of lease liabilities	$	2,351,376

As of ~~September~~June 30, ~~2017,~~2022, approximately ~~$0.6~~$1.8 million of the lease ~~termination~~ liability is included in ~~other~~Other liabilities on the ~~Condensed Consolidated Balance sheet.~~

~~13.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, the Company continues to conclude that its deferred tax assets are not realizable on a more-likely-than-not basis.

For the three and nine months ended September 30, 2017, the Company recorded an income tax provision of $134,668 and $342,563, respectively, on a pre-tax loss of $9.7 million and $25.6 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 regarding tax realizability of its deferred tax asset.

~~14. Reorganization Items, net:~~

~~Reorganization items represent expenses in connection~~condensed consolidated balance sheet with the ~~chapter 11 case. For the nine months ended September, 30 2016, reorganization items consisted~~current portion included in accrued expenses.

Table of ~~the following:~~

Contents

Nine months ended September 30,
2016
Legal fees $ 1,951,381
Professional fees 1,732,521
Trustee fees $ 33,000
Total $ 3,716,902

~~Subsequent to the Effective Date of the Plan, expenses directly attributable to the implementation of the Plan are reported in selling, general and administrative expenses. During the~~ ~~nine months ended September, 30 2016, the Company paid approximately $4.6 million for reorganization items.~~

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our condensed consolidated financial statements and notes to those statements and other financial information appearing elsewhere in this Quarterly Report on Form ~~10-Q.~~10-Q and in the Company's Annual Report on Form 10-K filed on March 3, 2022 (the "2021 Form 10-K"). In addition to historical information, the following discussion and other parts of this Quarterly Report contain forward-looking information that involves risks and uncertainties.

SIGA’s actual results could differ materially from those anticipated by such forward-looking statements due to a number of factors. See the factors set forth under the heading “Safe Harbor Statement” at the end of this Item 2.

Overview

We are a ~~company specializing in the development and commercialization of solutions for serious unmet medical needs and biothreats.~~commercial-stage pharmaceutical company. Our lead product, TPOXX® (“oral TPOXX®”, also known as "tecovirimat" in certain international markets), is ~~TPOXX®,~~ an ~~orally administered~~oral formulation antiviral drug ~~that targets orthopoxvirus infections, including smallpox. While TPOXX® is not yet approved as safe or effective~~for the treatment of human smallpox disease caused by variola virus. On July 13, 2018, the ~~U.S.~~United States Food & Drug Administration ~~it is a novel small-molecule drug that is being delivered to~~(“FDA”) approved oral TPOXX® for the ~~Strategic National Stockpile under Project Bioshield.~~

~~Closing~~treatment of ~~Chapter 11 Case~~

On April 12, 2016, the Company emerged from chapter 11 of the Bankruptcy Code when the Company's plan of reorganization (the “Plan”) became effective, and on December 22, 2016 the Company's chapter 11 case was closed by the Bankruptcy Court. Under the Plan, the Company fully paid all of its claims.smallpox. The Company ~~did not apply the provisions of fresh start accounting as ownership of existing shares of the Company's common stock remained unaltered by the Plan.~~

Prior to April 12, 2016, the effective date of the Plan, the Company was operating its business as a “debtor-in-possession.” The Company had filed on September 16, 2014 a voluntary petition for relief under chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) chapter 11 Case Number 14-12623 (SHL). The chapter 11 case preserved the Company's ability to satisfy its commitments under the BARDA Contract (as defined in ~~Note 3~~ to the financial statements) and preserved its operations, which likely would have been jeopardized by the enforcement of a judgment stemming from the Company's litigation with PharmAthene, Inc. (“PharmAthene”) (see “PharmAthene Litigation” below). While operating as a debtor-in-possession under chapter 11, the Company pursued an appeal of the Delaware Court of Chancery Final Order and Judgment, without having to post a bond.

~~PharmAthene Litigation~~

~~On November 16, 2016, the Company satisfied the Outstanding Judgment (as defined in~~ ~~Note 11~~ to the financial statements) owed to PharmAthene in connection with the Company's litigation with PharmAthene. In total, PharmAthene was paid $217.0 million in connection with the Outstanding Judgment. See ~~Note 11~~ ~~to the financial statements for additional details related to this litigation.~~

~~Liquidity~~

~~and until U.S. Food and Drug Administration (~~“~~FDA~~”~~) approval of TPOXX®~~ has been ~~achieved, and there is no difference between the approved product and courses of~~delivering oral TPOXX® ~~which have been delivered~~ to the U.S. Strategic National Stockpile (“("Strategic ~~Stockpile~~”Stockpile") since 2013.

In addition to being approved by the FDA, oral TPOXX® (tecovirimat) has regulatory approval with the European Medicines Agency ("EMA"), Health Canada and the Medicines and Healthcare Products Regulatory Agency ("MHRA") of the United Kingdom. The EMA and MHRA approved label indication covers the treatment of smallpox, monkeypox, cowpox, and vaccinia complications following vaccination against smallpox. The Health Canada approved label indication covers the treatment of smallpox.

With respect to the regulatory approvals by the EMA, MHRA and Health Canada, oral tecovirimat represents the same formulation that was approved by the FDA in July 2018 under the brand name TPOXX®. ~~Upon meeting~~

For the intravenous formulation of TPOXX® ("IV TPOXX®"), SIGA announced on May 19, 2022 that the FDA approved this formulation for the treatment of smallpox.

Monkeypox Outbreak

Starting in June 2022, procurement orders for oral TPOXX® from new international jurisdictions, as well as orders under existing contracts, have occurred as SIGA has received a large and ongoing number of inquiries about accessing oral TPOXX® in connection with a global monkeypox outbreak. The Company believes that a portion of the courses of oral TPOXX® delivered under these ~~requirements,~~orders will be used for the treatment of active monkeypox cases as part of a response to this outbreak by the global health community.

Monkeypox is a disease caused by infection with the monkeypox virus. Monkeypox virus is part of the same family of viruses as smallpox. Monkeypox symptoms are similar to smallpox, but not as severe and with historical fatality in Africa of less than 1% to 10% depending on region and clade. The first human case of monkeypox was recorded in 1970. Since then, monkeypox has been reported in several central and western African countries, with case numbers greatly increasing in recent years. Prior to the ongoing 2022 outbreak, nearly all monkeypox cases in people outside of Africa were linked to international travel to countries where the disease commonly occurs, or through imported animals, including two cases in the United States in 2021. These cases are currently occurring on multiple continents. On July 23, 2022, the World Health Organization (WHO) declared the monkeypox outbreak as a public health emergency of international concern.

COVID-19 Pandemic

The COVID-19 pandemic has caused significant societal and economic disruption. Such disruption, and the associated risks and costs, are expected to continue for an indeterminate period of time. Given the uncertain future course of the COVID-19 pandemic, and the uncertain scale and scope of its future direct and indirect impact, the Company is ~~entitled~~continually reviewing business and financial risks related to ~~a $41 million hold back payment under~~ the ~~BARDA Contract. Based on a targeted New Drug Application (~~“~~NDA~~”pandemic and seeking coordination with its government partners with respect to the performance of current and future government contracts. Additionally, the Company is continually coordinating with service providers and vendors, in particular Contract Manufacturing Organizations ("CMOs") ~~filing for TPOXX®~~that constitute our supply chain, with respect to direct and indirect actions and risks caused by the ~~end~~COVID-19 pandemic.

As of ~~2017, it is currently anticipated that~~the filing date of this report, the Company ~~will be eligible~~has not identified or been notified by government customers of impediments to ~~receive~~ the ~~$41 million hold back payment~~continued full performance of their government contracts. With regard to day-to-day operations, the COVID-19 pandemic, and the secondary effects of the pandemic, have at times slowed the daily pace of execution of government contracts as well as new contract generation. For example, U.S. and foreign government staffs overseeing health security preparedness have been involved directly or indirectly in governmental responses to the ~~second half~~pandemic, which has diverted government staff time that might normally have been directed toward contract matters involving SIGA. Additionally, the COVID-19 pandemic, and the secondary effects of ~~2018.~~

In the ~~event~~pandemic have increased the risk of delays in connection with a broad range of operational activities, including: supply chain procurement of raw materials and manufacturing; and certain research and development activities, such as those that involve clinical trials. While the Company does not ~~receive~~currently expect any pandemic-related delays in such operational activities to have a ~~substantial portion~~material adverse impact on the financial condition of the ~~hold back payment,~~Company or ~~other substantial cash inflows, by October of 2018, then, based on currently forecasted operating costs,~~its long-term performance, the Company ~~will require additional sources~~cannot give assurances as to the full extent of ~~funding to continue operations and prevent an event~~the impact at this time.

Overall, while the COVID-19 pandemic has not adversely affected the liquidity position of ~~default under the Term Loan (Note 8). In this case,~~ the Company, ~~would seek~~the pandemic has diverted foreign government staff time normally directed toward contract matters involving SIGA and has affected and could continue to ~~increase~~affect the timing of international contract awards for oral TPOXX®. Additionally, the pandemic could result in a slower pace of future product deliveries if the pandemic results in shortages or delays in the receipt by the supply chain of raw materials or supplies. If the general negative effect of the COVID-19 pandemic becomes more acute, including due to resurgences in infections or lack of vaccination (or efficacy thereof), there could be material adverse effects to our business and cash ~~liquidity by: raising proceeds through a financing, entering~~flows.

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Procurement Contracts with the U.S. Government

19C BARDA Contract

On September 10, 2018, the Company entered into a ~~new~~ contract ~~for~~with the U.S. Biomedical Advanced Research and Development Authority ("BARDA") pursuant to which SIGA agreed to deliver up to 1,488,000 courses of oral TPOXX® to the U.S. Strategic National Stockpile ("Strategic Stockpile"), and to manufacture and deliver to the Strategic Stockpile, or ~~any other product, a sale of assets, or the modification~~store as vendor-managed inventory, up to 212,000 courses of the ~~existing~~intravenous (IV) formulation of TPOXX® (“IV TPOXX®”). Additionally, the contract includes funding from BARDA ~~Contract; significantly reducing~~for a range of activities, including: advanced development of IV TPOXX®, post-marketing activities for oral and IV TPOXX®, and procurement activities. As of June 30, 2022, the contract with BARDA (as amended, modified, or supplemented from time to time, the "19C BARDA Contract") contemplates up to approximately $602.5 million of payments, of which approximately $51.7 million of payments are included within the base period of performance of five years, approximately $239.7 million of payments are related to exercised options and up to approximately $311.1 million of payments are currently specified as unexercised options. BARDA may choose in its ~~operating expenses;~~sole discretion when, or ~~modifying the terms~~whether, to exercise any of the ~~Loan Agreement. There can~~unexercised options. The period of performance for options is up to ten years from the date of entry into the 19C BARDA Contract and such options could be ~~no assurance that~~exercised at any time during the contract term, including during the base period of performance.

The base period of performance specifies potential payments of approximately $51.7 million for the following activities: payments of approximately $11.1 million for the delivery of approximately 35,700 courses of oral TPOXX® ~~will receive FDA approval on a timely basis, if at all, or that there~~to the Strategic Stockpile; payments of $8.0 million for the manufacture of 20,000 courses of final drug product of IV TPOXX® ("IV FDP"), of which $3.2 million of payments are related to the manufacture of bulk drug substance ("IV BDS") to be used in the manufacture of IV FDP; payments of approximately $32.0 million to fund advanced development of IV TPOXX®; and payments of approximately $0.6 million for supportive procurement activities. As of June 30, 2022, the Company has received $11.1 million for the delivery of approximately 35,700 courses of oral TPOXX® to the Strategic Stockpile, $3.2 million for the manufacture of IV BDS, $4.3 million for the delivery of IV FDP to the Strategic Stockpile and $15.5 million for other base period activities. IV BDS has been used for the manufacture of courses of IV FDP. The $3.2 million received for the completed manufacture of IV BDS had been recorded as deferred revenue as of December 31, 2021, but with the delivery of IV FDP to the Strategic Stockpile during the six months ended June 30, 2022, $2.9 million was recognized as revenue. The remaining $0.3 million of deferred revenue will be ~~no difference between the approved product and courses of TPOXX® which have been~~recognized as IV FDP containing such IV BDS is delivered to the Strategic Stockpile. ~~Furthermore, there can be no assurance~~

The options that have been exercised to date provide for payments up to approximately $239.7 million. There are exercised options for the following activities: payments up to $11.2 million for the procurement of raw materials used in the 2020 manufacture of certain courses of oral TPOXX®; payments up to $213.9 million for the delivery of up to 726,140 courses of oral TPOXX®; and payments of up to $14.6 million for funding of post-marketing activities for oral TPOXX®. As of June 30, 2022, the Company ~~would be able to increase cash liquidity, if needed, through a financing, a new contract for TPOXX® or~~ ~~any other product, a sale~~has delivered approximately $225.1 million (including the value of ~~assets, the modification~~raw materials) of the existing BARDA Contract, or a significant reduction of its operating expenses or operations, or that the lenders would agree to modify the Term Loan Agreement, if needed. Because of these conditions, substantial doubt exists about the Company’s ability to continue as a going concern~~within one year after the financial statement issuance date.~~

~~Lead Product-TPOXX®~~

~~On May 13, 2011, SIGA signed the BARDA Contract pursuant to which we agreed to deliver two million courses of~~oral TPOXX® to the Strategic ~~Stockpile.~~ Stockpile, of which approximately $112.5 million was delivered in 2021; and $7.6 million has been received or billed for in connection with post-marketing activities for oral TPOXX®.

Unexercised options specify potential payments up to approximately $311.1 million in total (if all such options are exercised). There are options for the following activities: payments of up to $225.1 million for the delivery of oral TPOXX® to the Strategic Stockpile; payments of up to $76.8 million for the manufacture of courses of IV FDP, of which up to $30.7 million of payments would be paid upon the manufacture of IV BDS to be used in the manufacture of IV FDP; payments of up to approximately $3.6 million to fund post-marketing activities for IV TPOXX®; and payments of up to approximately $5.6 million for supportive procurement activities.

The options related to IV TPOXX® are divided into two primary manufacturing steps. There are options related to the manufacture of bulk drug substance (“IV BDS Options”), and there are corresponding options (for the same number of IV courses) for the manufacture of final drug product (“IV FDP Options”). BARDA may choose to exercise any, all, or none of these options in its sole discretion. The 19C BARDA Contract includes: three separate IV BDS Options, each providing for the bulk drug substance equivalent of 64,000 courses of IV TPOXX®; and three separate IV FDP Options, each providing for 64,000 courses of final drug product of IV TPOXX®. BARDA has the sole discretion as to whether to simultaneously exercise IV BDS Options and IV FDP Options, or whether to exercise options at different points in time (or alternatively, to only exercise the IV BDS Option but not the IV FDP Option). If BARDA decides to only exercise IV BDS Options, then the Company would receive payments up to $30.7 million; alternatively, if BARDA decides to exercise both IV BDS Options and IV FDP Options, then the Company would receive payments up to $76.8 million. For each set of options relating to a specific group of courses (for instance, the IV BDS and IV FDP options that reference the same 64,000 courses), BARDA has the option to independently purchase IV BDS or IV FDP. The Company estimates that sales of the IV formulation under this contract (under current terms), assuming the IV FDP Options were exercised, would have a gross margin (sales less cost of sales, as a percentage of sales) that is ~~worth~~less than 40%.

Under the terms of this contract, exercise of procurement options is at the sole discretion of BARDA. The request for proposal that preceded the award of the 19C BARDA Contract indicated that the expected purpose of the contract was to maintain the level of smallpox antiviral preparedness in the Strategic Stockpile. Based on prior product delivery activity, and current FDA-approved shelf life of oral TPOXX®, the Company estimates that approximately ~~$472.3~~940,000 courses of smallpox antiviral treatment would need to be delivered to the U.S. Government between 2022 and 2024 in order to maintain stockpile levels of unexpired smallpox antiviral treatment during this period.

U.S. Department of Defense Procurement Contract (“DoD Contract”)

On May 12, 2022, the Company announced a procurement contract with the U.S. Department of Defense (“DoD”). The DoD Contract includes a firm commitment for the DoD to procure approximately $3.6 million ~~including $409.8~~of oral TPOXX®, and an option, exercisable at the sole discretion of the DoD, for the procurement of approximately $3.8 million of oral TPOXX®. In the second quarter of 2022, the Company delivered and recognized revenue of $3.6 million for the delivery of oral TPOXX® to the DoD and fulfilled the firm commitment order noted above.

Table of Contents

International Procurement Contracts

This year, through July 31, the Company has received firm commitment orders from ten international jurisdictions (including Canada) for the delivery of approximately $60 million of oral TPOXX®, of which approximately $39 million is for Canada and approximately $21 million is for jurisdictions in Europe, Asia Pacific, Asia and the Middle East. Additionally, the contract with CDND (defined below) has an option, exercisable at the sole discretion of CDND, for the purchase of up to an additional $6 million of oral TPOXX®. With respect to the $60 million of firm commitment orders that have been received this year, approximately $5 million of oral TPOXX® was delivered in the three months ended June 30, 2022, approximately $26 million is expected to be delivered in the third quarter of 2022 and the remaining orders are expected to be fulfilled between October 1, 2022 and July 31, 2023. Through an International Promotion Agreement (defined below), Meridian Medical Technologies, Inc. (“Meridian”) is the counterparty to international contracts under which orders are placed for the purchase of oral TPOXX®. The Public Health Agency of Canada (“PHAC”) and the Canadian Department of National Defence (“CDND”) are among the contracting parties for the purchase of oral TPOXX® (see below for a summary description of these contracts).

On January 13, 2021, PHAC awarded a contract to Meridian (the “PHAC Contract”) for the purchase of up to approximately $33 million of oral TPOXX® (tecovirimat) within five years. In March 2022 and July 2022, PHAC executed amendments in which total procurement of oral TPOXX® under the PHAC Contract was increased to an amount of approximately $45 million. Prior to 2022, approximately $10 million of oral TPOXX® had been ordered and delivered to PHAC. No courses of oral TPOXX® were delivered under this contract for the first six months of 2022. In July 2022, $16 million of oral TPOXX® was delivered to PHAC. As of July 31, 2022, after the delivery of $16 million of oral TPOXX® in mid-July, there are approximately $19 million of firm commitment orders that remain to be delivered under this contract.

On April 3, 2020, the Company announced that the CDND awarded a contract (the "Canadian Military Contract") to Meridian, pursuant to which the CDND would purchase up to approximately $14 million of oral TPOXX® over four years. Prior to 2022, approximately $4 million of oral TPOXX® had been ordered and delivered to CDND. No courses of oral TPOXX® were delivered under this contract for the first six months of 2022. As of June 30, 2022, an approximate firm commitment order of $4 million remains to be delivered under this contract. Additionally, there are approximately $6 million of unexercised options, exercisable at the sole discretion of CDND, remaining under this contract.

The above-listed contract awards were coordinated between SIGA and Meridian under the international promotion agreement (as amended, the "International Promotion Agreement") that was entered into by the parties on June 3, 2019. Under the International Promotion Agreement, Meridian is the counterparty in connection with international contracts for oral TPOXX® and SIGA is responsible for manufacture and delivery of ~~1.7 million courses of~~any oral TPOXX® ~~and $62.5 million of potential reimbursements related to development and supportive activities (the “Base Contract”).~~ purchased thereunder.

International Promotion Agreement

Under the ~~Base Contract, BARDA~~terms of the International Promotion Agreement, Meridian was granted exclusive rights to market, advertise, promote, offer for sale, or sell oral TPOXX® in a field of use specified in the International Promotion Agreement in all geographic regions except for the United States (the “Territory”), and Meridian has agreed not to ~~buy from~~commercialize any competing product, as defined in the International Promotion Agreement, in the specified field of use in the Territory. SIGA ~~1.7 million courses of~~retains ownership, intellectual property, distribution and supply rights and regulatory responsibilities in connection with TPOXX®, and, in the United States market, also retains sales and marketing rights with respect to oral TPOXX®. ~~Additionally, SIGA~~SIGA’s consent is required ~~to contribute to BARDA 300,000 courses at no additional cost to BARDA.~~

~~In addition~~for the entry into any sales arrangement pursuant to the ~~Base Contract, the BARDA Contract also contains various remaining options that, if exercisable by BARDA: would result in a $50.0 million payment~~International Promotion Agreement.

The fee Meridian retains pursuant to the Company in the event of FDA approval for extension to 84-month expiry for TPOXX® (from 38-month expiry as required in the Base Contract); would fund up to $58.3 million of development and supportive activities such as work onInternational Promotion Agreement is a smallpox prophylaxis indication for TPOXX®; and/or would fund $14.4 million of production-related activities related to warm-base manufacturing. In 2015, BARDA exercised two options related to extending the indicationspecified percentage of the ~~drug~~collected proceeds of sales of oral TPOXX® net of certain expenses, for calendar years in which customer collected amounts net of such expenses are less than or equal to a specified threshold, and a higher specified percentage of such collected net proceeds for calendar years in which such net collected amounts exceed the ~~geriatric~~specified threshold. It is probable that we will exceed the specified threshold in 2022 and, pediatric populations. The stated value of these exercises was minimal. BARDA may choose not to exercise additional options in the future. Options are exercisable by BARDA at its sole discretion. BARDA has indicated that it will evaluate, after the FDA's review and evaluation of stability data, the Company's request that BARDA exercise the option for the $50.0 million payment to the Company in the event of FDA approval of 84-month expiry for TPOXX®.

~~The BARDA Contract expires in September 2020.~~

~~For courses of TPOXX® that are physically delivered to the Strategic Stockpile,~~as a result, the Company has ~~replacement obligations,~~recorded and will continue to record the higher specified percentage for all International Promotion Agreement sales in 2022. Taking into account Meridian’s fee and manufacturing costs of oral TPOXX®, it is currently estimated by the Company that international sales of oral TPOXX® will have a contribution margin (as expressed as a percentage of product sales, and before any consideration of expenses not directly related to manufacturing or Meridian activities) of between approximately 65% and 80%, depending on the international sales levels each year. For purposes of this disclosure, contribution margin (in amount) represents international product sales less applicable cost of sales and the Meridian fee (which is included within selling, general and administrative expenses within the income statement).

Research Agreements and Grants

In July 2019, the Company was awarded a multi-year research contract valued at ~~no cost~~a total of $19.5 million, with an initial award of $12.4 million, from the DoD to ~~BARDA,~~support work in pursuit of a potential label expansion for oral TPOXX® that would include post-exposure prophylaxis ("PEP") of smallpox (such work known as the "PEP Label Expansion Program" and the contract referred to as the "PEP Label Expansion R&D Contract"). In subsequent modifications, the DoD increased the scope and the available funding under the PEP Label Expansion R&D Contract to approximately $27 million. The period of performance for this contract, as modified, terminates on January 31, 2025. As of June 30, 2022, remaining revenue to be recognized in the ~~event~~future under the PEP Label Expansion R&D Contract is up to $15.4 million. Revenue from the performance obligation under the PEP Label Expansion R&D Contract is recognized over time using an input method using costs incurred to date relative to total estimated costs at completion.

Contracts and grants include, among other things, options that ~~the final version of TPOXX® approved by~~may or may not be exercised at the U.S. ~~Food~~Government’s discretion. Moreover, contracts and ~~Drug Administration (the “FDA”) is different from~~grants contain customary terms and conditions including the U.S. Government’s right to terminate or restructure a contract or grant for convenience at any ~~course~~time. As such, the Company may not be eligible to receive all available funds.

Table of TPOXX® that has been delivered to the Strategic Stockpile or if TPOXX® does not meet any specific label claims, fails release testing or does not meet the 38-month expiry period (from time of delivery to the Strategic Stockpile), or if TPOXX® is recalled or deemed to be recalled for any reason.Contents

We believe TPOXX® is among the first new small-molecule drugs delivered to the Strategic Stockpile under Project BioShield. TPOXX® is an investigational product that is not currently approved by FDA as a treatment of smallpox or any other indication. FDA has designated TPOXX® for “fast-track” status, creating a path for expedited FDA review and eventual regulatory approval.

Critical Accounting Estimates

The methods, estimates and judgments we use in applying our accounting policies have a significant impact on the results we report in our condensed consolidated financial statements, which we discuss under the heading “Results of Operations” following this section of our Management’s Discussion and Analysis of Financial Condition and Results of Operations. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Information regarding our critical accounting policies and estimates appears in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations of our 2021 Form 10-K. Our most critical accounting estimates include revenue recognition over time, the valuation of stock-based awards ~~including options and warrants granted or~~ issued by the Company ~~revenue recognition,~~and income ~~taxes, and realization of deferred tax assets.~~

taxes.

Results of Operations

Three Months Ended June 30, 2022 and ~~Nine~~2021

For the three months ended ~~September 2017~~June 30, 2022, revenues from product sales and ~~2016~~

supportive services were $8.6 million. Such revenues primarily relate to sales of oral TPOXX® to the DoD of approximately $3.6 million and international sales of approximately $5.0 million. For the three months ended June 30, 2021, revenues from product sales and supportive services were $6.9 million, which relate to international sales of oral TPOXX® to Canada.

Revenues from research and development ~~contracts and grants~~activities for the three months ended ~~September~~June 30, ~~2017~~2022 and ~~2016,~~2021, were ~~$1.4~~$8.1 million and $4.7 million, respectively. The decrease in revenue of approximately $3.3 million, or 70%, primarily reflects a decrease in revenues from our federal contracts supporting the development of TPOXX. Revenues from federal contracts supporting the development of TPOXX have decreased because the number and scale of studies that were active during the quarter have decreased in comparison to the prior year.

~~Revenues from research and development contracts and grants for nine months ended September 30, 2017 and 2016, were $10.9 million and $7.8~~$1.7 million, respectively. The increase of $6.4 million of revenue is primarily related to clinical trial activity under the PEP Label Expansion R&D Contract in ~~revenue~~connection with the PEP development program.

Cost of approximately $3.1 million, or 39%, is attributable to an increase in revenues from our federal contracts supporting the development of TPOXX. Revenues from federal contracts supporting the development of TPOXX have increasedsales and supportive services for the ~~nine-month period because~~three months ended June 30, 2022 and 2021 were $0.9 million and $1.0 million, respectively. Such costs in 2022 were primarily associated with the ~~number~~manufacture and ~~scale~~delivery of ~~studies that~~courses of oral TPOXX®. Such costs in 2021 were ~~active in~~associated with the ~~early part~~manufacture and delivery of ~~2017 had increased in comparison to the corresponding period in the prior year.~~

courses of oral TPOXX® for international sales as well as an inventory-related loss of $0.6 million.

Selling, ~~General~~general and ~~Administrative~~administrative (“SG&A”) expenses for the three months ended ~~September~~June 30, ~~2017~~2022 and ~~2016,~~2021 were ~~$3.1~~$5.9 million and ~~$2.9~~$5.4 million, ~~respectively, reflecting an~~respectively. The increase of approximately ~~$239,000, or 8%. The increase is~~$0.5 million primarily ~~attributable to a $445,000~~reflects an increase in ~~employee compensation expense, partially offset by an $82,000 decrease in corporate governance expenses, which were elevated in the third quarter of 2016 due to strategic initiatives~~consultant costs in connection with ~~the final resolution of the PharmAthene litigation,~~responding to government, medical profession and ~~decreases in a broad array of corporate expenses. The increase in employee compensation expense is primarily due to an increase in senior management headcount.~~

SG&A expenses for the nine months ended September 30, 2017 and 2016, were $9.0 million and $9.3 million, respectively, reflecting a decrease of approximately $254,000, or 3%. The decrease is primarily attributable to a $2.0 million decrease in professional service fees, partially offset by a $1.9 million increase in employee compensation expense. The decrease in professional service fees is primarily duemedia inquiries related to the final resolution of the PharmAthene litigation, which has resulted in a decrease in legal fees. The increase in employee compensation expense is primarily due to an increase in senior management headcount.

global monkeypox outbreak.

Research and ~~Development~~development (“R&D”) expenses for the three months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 were ~~$2.5~~$6.8 million and $6.1 million, respectively, reflecting a decrease of approximately $3.6 million, or 59%. The decrease is attributable to a $3.3 million decrease in direct vendor-related expenses supporting the development of TPOXX.

~~R&D expenses for nine months ended September 30, 2017 and 2016 were $13.9 million and $11.6~~$2.3 million, respectively, reflecting an increase of approximately ~~$2.3 million or 20%.~~$4.5 million. The increase is primarily attributable to an increase ~~of $2.1 million~~ in direct vendor-related expenses supporting the development of TPOXX, and a net expense of $536,000 related to an inventory write-down. The $536,000 expense relates to a $686,000 inventory write-down, partially offset by contractual CMO credits received in connection with the inventory write-down.

Patent expenses for the three and nine months ended September 30, 2017 were $251,000 and $688,000, respectively. Patent expenses for the three and nine months ended September 30, 2016 were $230,000 and $690,000, respectively. These expenses reflect our ongoing efforts to protect our lead drug candidates in varied geographic territories.

~~Lease termination expense for the three and nine months ended September 30, 2017 was approximately $1.2 million. This expense relates to the Old HQ Sublease Termination Agreement. See~~ ~~Note 12~~ ~~to the financial statements for additional information.~~

Interest expense on the PharmAthene liability for the three and nine months ended September 30, 2016 was $3.6 million and $7.4 million, respectively. These amounts represented interest expense related to post-judgment interest on the Delaware Court of Chancery Final Order and Judgment. On November 16, 2016, we fully paid the PharmAthene liability, and thus there was no interest expense on the PharmAthene liability for the three and nine months ended September 30, 2017. See ~~Note 11~~ ~~to the financial statements for additional information.~~

Interest expense for the three and nine months ended September 30, 2017 was $3.7 million and $11.0 million, respectively. Interest expense for the three and nine months ended September 30, 2016 was $95,000 and $105,000, respectively. Interest expense in 2017 represents interest accrued on the Term Loan. The $11.0 million interest expense for the nine months ended September 30, 2017 includes a $7.6 million cash payment from restricted cash, and $3.4 million of accretion of unamortized costs and fees related to the Term Loan balance.

~~Reorganization expenses for the three and nine months ended September 30, 2016 were $0 and $3.7 million, respectively. These expenses were~~ incurred in connection with activities under the ~~chapter 11 case. See~~ ~~Note 1~~PEP Label Expansion R&D Contract.

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Changes in the fair value of the liability-classified warrant to acquire common stock were recorded within the ~~financial statements for additional information.~~

statement of operations. The warrant was fully exercised during the three months ended June 30, 2022. For the three ~~and nine~~ months ended ~~September~~June 30, ~~2017,~~2022, we ~~incurred~~recorded a gain of approximately $50,000, reflecting a decrease in the fair value of the liability-classified warrant primarily due to the decrease in our stock price prior to the exercise of the Warrant. For the three months ended June 30, 2021, we recorded a gain of approximately $0.4 million, reflecting a decrease in the fair value of the liability-classified warrant primarily due to the decrease in our stock price.

For the three months ended June 30, 2022 and 2021, we recorded pre-tax ~~losses~~income of ~~$9.7~~$3.2 million and ~~$25.6~~$0.5 million, respectively, and a corresponding income tax ~~expense~~provision of ~~$135,000~~$1.2 million and ~~$343,000,~~$0.3 million, respectively. The effective tax ~~rate~~rates during the three ~~and nine~~ months ended ~~September~~June 30, ~~2017 was (1.4)%~~2022 and ~~(1.3) %,~~2021 were 36.2% and 63.8%, respectively. Our effective tax rate for the periods ended ~~September~~June 30, ~~2017 differs~~2022 and 2021 differ from the statutory rate primarily as ~~no income tax benefit~~a result of state taxes, non-deductible executive compensation under Internal Revenue Code Section 162(m) and a non-taxable adjustment for the fair market value of the Warrant.

Six Months Ended June 30, 2022 and 2021

For the six months ended June 30, 2022, revenues from product sales and supportive services were $15.9 million. Such revenues primarily relate to approximately $7.2 million of sales of IV TPOXX® to the U.S. Government under the 19C BARDA Contract; approximately $3.6 million of oral TPOXX® sales to the DoD; and approximately $5.0 million of international sales of oral TPOXX®. For the six months ended June 30, 2021, revenues from product sales and supportive services were $10.4 million. Such revenues mostly relate to international sales of oral TPOXX® to Canada.

Revenues from research and development activities for the six months ended June 30, 2022 and 2021, were $11.3 million and $3.0 million, respectively. Substantially all of the increase of $8.3 million relates to clinical trial activity under the PEP Label Expansion R&D Contract in connection with the PEP development program.

Cost of sales and supportive services for the six months ended June 30, 2022 and 2021 were $5.6 million and $1.2 million, respectively. The increase of $4.4 million primarily relates to the manufacture and sale of IV TPOXX® in 2022; manufacturing costs per unit are higher for IV TPOXX® than oral TPOXX®, and the sales mix in 2021 was only oral TPOXX®.

SG&A expenses for each of the six months ended June 30, 2022 and 2021 were $9.6 million. An increase in consulting costs in connection with responding to government, medical profession and media inquiries related to the global monkeypox outbreak was offset by a decrease in promotion fees in connection with international sales.

R&D expenses for the six months ended June 30, 2022 and 2021 were $10.4 million and $4.6 million, respectively. The increase of $5.8 million is primarily attributable to an increase in direct vendor-related expenses incurred in connection with activities under the PEP Label Expansion R&D Contract.

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Changes in the fair value of the liability-classified warrant to acquire common stock were recorded ~~for current year operating losses~~within the statement of operations. The warrant was fully exercised during the six months ended June 30, 2022. For the six months ended June 30, 2022, we recorded a gain of approximately $0.4 million, reflecting a decrease in the fair value of the liability-classified warrant primarily due to the ~~Company’s assessment regarding tax realizability of its deferred tax assets.~~decrease in our stock price. For the ~~three and nine~~six months ended ~~September~~June 30, ~~2016,~~2021, we ~~incurred~~recorded a gain of approximately $1.4 million, reflecting a decrease in the fair value of the liability-classified warrant primarily due to the decrease in our stock price.

For the six months ended June 30, 2022, we recorded pre-tax ~~losses~~income of ~~$9.2~~$2.1 million and ~~$29.2 million and~~a corresponding income tax ~~benefit/(expense)~~provision of ~~approximately $4,000~~$0.5 million. For the six months ended June 30, 2021, we recorded a pre-tax loss of ($0.6) million and ~~$(8,700)~~a corresponding income tax provision of $0.1 million. The effective tax rates during the six months ended June 30, 2022 and 2021 were 21.2% and (11.3)%, respectively.

Our effective tax rate for the periods ended June 30, 2022 and 2021 differ from the statutory rate primarily as a result of state taxes, non-deductible executive compensation under Internal Revenue Code Section 162(m) and a non-taxable adjustment for the fair market value of the Warrant.

Liquidity and Capital Resources

As of ~~September~~June 30, ~~2017,~~2022, we had ~~$25.8~~$114.5 million in ~~unrestricted~~ cash and cash equivalents compared with ~~$28.7~~$103.1 million at December 31, ~~2016. As~~2021.

Operating Activities

We prepare our condensed consolidated statement of ~~September 30, 2017,~~cash flows using the ~~Company had $19.8 million~~indirect method. Under this method, we reconcile net income/(loss) to cash flows from operating activities by adjusting net income/(loss) for those items that impact net income/(loss) but may not result in actual cash receipts or payments during the period. These reconciling items include but are not limited to stock-based compensation, deferred income taxes, changes in the fair value of ~~restricted cash~~our warrant liability, inventory write offs, gains and ~~cash equivalents compared with $27.5 million at December 31, 2016. The restricted cash is utilized~~losses from various transactions and changes in the condensed consolidated balance sheet for working capital from the beginning to ~~pay interest on~~ the ~~Term Loan as it becomes due and $5.0 million~~end of the ~~restricted~~period.

Net cash ~~may be withdrawn after~~provided by/(used in) operating activities for the six months ended June 30, ~~2018 upon the satisfaction of certain conditions. See~~ ~~Note 8~~ ~~to the financial statements for additional information.~~

~~The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern~~2022 and ~~contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. See~~ ~~Note 1~~ ~~to the financial statements for a detailed explanation of the Company's liquidity.~~

~~Operating Activities~~

~~Net cash used in operations for the nine months ended September 30, 2017 and 2016~~2021 was ~~$2.6~~$54.5 million and ~~$90.9~~($6.2) million, respectively. For the ~~nine~~six months ended ~~September~~June 30, ~~2017, we received $8.5~~2022, the receipt of approximately $80 million ~~from BARDA~~ for product delivery ~~which was offset by recurring operating costs~~ and ~~$4.8 million~~acceptance of ~~payments to contract manufacturing organizations (“CMOs”) for the manufacture and related support of~~oral TPOXX®. Cash usage in 2016 was primarily related to: $115 million of payments made to PharmAthene (to be applied against the PharmAthene liability); $7.5 million of interest payments that were made to PharmAthene during the nine months ended September, 30 2016; recurring operating costs; costs attendant courses delivered to the Loan Agreement and Rights Offering, and the administration of the chapter 11 case; pre-petition claim payments; $23 million of payments to CMOs for the manufacture and related support of TPOXX®. These amounts wereStrategic Stockpile in December 2021 was partially offset by ~~$74.3~~the payment of approximately $19 million of ~~cash received from BARDA for product deliveries of TPOXX® and achieving a milestone under the BARDA contract.~~

~~Investing Activities~~

federal income taxes, as well as customary operating activities. For the ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016~~2021, net cash usage ~~of approximately $54,000 and $11,000, respectively,~~ related to support of ordinary working capital (accounts receivable, accounts payable, inventory, and prepaids, among other items) and customary operating activity was partially offset by the receipt of cash from international sales.

Investing Activities

There was no cash-related investing activity for the six months ended June 30, 2022. For the six months ended June 30, 2021, we used cash of $24,424 for capital expenditures.

Financing Activities

~~Net cash~~

Cash used byin financing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 was $43.1 million, which was primarily attributable to our special cash dividend of approximately ~~$250,000. Cash was used to repurchase $193,000~~$32.9 million. In addition, we repurchased approximately 1.5 million shares of common stock ~~to meet minimum statutory tax withholding requirements~~ for ~~restricted shares issued to employees and to buy back $84,000 of options at intrinsic value. During~~approximately $10.1 million. Cash used in financing activities for the ~~nine~~six months ended ~~September,~~June 30, ~~2016,~~2021 was $13.1 million, which was substantially all attributable to our repurchase of approximately 1.9 million shares of common stock.

On May 5, 2022, the Board of Directors declared a special dividend of $0.45 per share on the common stock of the Company, which resulted in an overall dividend payment of $32.9 million. The special dividend was paid on June 2, 2022 to shareholders of record at the close of business on May 17, 2022.

Future Cash Requirements

As of June 30, 2022, we ~~paid~~had outstanding purchase orders associated with manufacturing obligations in the aggregate amount of approximately ~~$1.3 million in connection with the Term Loan and Rights Offering; both of which were completed in November 2016.~~

$21.7 million.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

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Recently Issued Accounting Standards

~~For discussion regarding the impact of~~

The Company did not adopt any accounting standards ~~that were recently issued but not yet effective, on the Company's condensed consolidated financial statements, see~~ ~~Note 2~~, ~~Recently Issues Accounting Standards,~~ ~~of Notes to Condensed Consolidated Financial Statements.~~

this quarter.

Safe Harbor Statement

Certain statements in this Quarterly Report on Form 10-Q, including certain statements contained in ~~“Business” and~~the foregoing “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” constitute “forward-looking statements” within the meaning of Section 27A of the ~~Private~~ Securities ~~Litigation Reform~~ Act of ~~1995,~~1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act, including statements relating to the progress of SIGA’s development programs and ~~time lines~~timelines for bringing products to market, ~~and~~delivering products to the Strategic Stockpile, the enforceability of our procurement contracts, such as the 19C BARDA ~~Contract.~~Contract (the "BARDA Contracts"), with BARDA, and responding to the global outbreak of monkeypox. The words or phrases “can be,” “expects,” “may affect,” “may depend,” “believes,” “estimate,” “project” and similar words and phrases are intended to identify such forward-looking statements. Such forward-looking statements are subject to various known and unknown risks and uncertainties, and SIGA cautions you that any forward-looking information provided by or on behalf of SIGA is not a guarantee of future performance. SIGA’s actual results could differ materially from those anticipated by such forward-looking statements due to a number of factors, some of which are beyond SIGA’s control, including, but not limited to, (i) the risk that BARDA elects, in its sole discretion as permitted under the BARDA Contracts, not to exercise all, or any, of the remaining unexercised options under those contracts, (ii) the risk that SIGA may not complete performance under the BARDA Contracts on schedule or in accordance with contractual terms, (iii) the risk that the BARDA Contracts are modified or canceled at the request or requirement of the U.S. Government, (iv) the risk that the nascent international biodefense market does not develop to a degree that allows SIGA to successfully market TPOXX® internationally, (v) the risk that potential products, including potential alternative uses or formulations of TPOXX® that appear promising to SIGA or its collaborators, cannot be shown to be efficacious or safe in subsequent pre-clinical or clinical trials, ~~(ii)~~(vi) the risk that SIGA or its collaborators will not obtain appropriate or necessary governmental approvals to market these or other potential products ~~(iii) the risk that SIGA may not be able to obtain anticipated funding for its development projects~~ or other needed funding, including from anticipated governmental contracts and grants (iv) the risk that SIGA may not complete performance under the BARDA Contract on schedule or in accordance with contractual terms, (v)uses, (vii) the risk that SIGA may not be able to secure or enforce sufficient legal rights in its products, including intellectual property protection, ~~(vi)~~(viii) the risk that any challenge to SIGA’s patent and other property rights, if adversely determined, could affect SIGA’s business and, even if determined favorably, could be costly, ~~(vii)~~(ix) the risk that regulatory requirements applicable to SIGA’s products may result in the need for further or additional testing or documentation that will delay or prevent SIGA from seeking or obtaining needed approvals to market these products, (viii) the risk that one or more protests could be filed and upheld in whole or in part or other governmental action taken, in either case leading to a delay of performance under the BARDA Contract or other governmental contracts, (ix) the risk that the BARDA Contract is modified or canceled at the request or requirement of the U.S. government, (x) the risk that the volatile and competitive nature of the biotechnology industry may hamper SIGA’s efforts to develop or market its products, (xi) the risk that changes in domestic ~~and~~or foreign economic and market conditions may affect ~~SIGA��s~~SIGA’s ability to advance its research or may affect its products adversely, (xii) the effect of federal, state, and foreign regulation, including drug regulation and international trade regulation, on SIGA’s businesses, (xiii) the risk of disruptions to SIGA’s supply chain for the manufacture of TPOXX®, causing delays in SIGA’s research and development activities, causing delays or the re-allocation of funding in connection with SIGA’s government contracts, or diverting the attention of government staff overseeing SIGA’s government contracts, (xiv) the risk that the U.S. ~~Government's~~or foreign governments' responses (including inaction) to ~~the~~ national ~~and~~or global economic ~~situation~~conditions or infectious diseases, such as COVID-19, are ineffective and may adversely affect SIGA’s business, and (xv) risks associated with responding to the current monkeypox outbreak, as well as the risks and uncertainties included in Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2021 and SIGA's ~~business adversely,~~subsequent filings with the Securities and ~~(xiv)~~Exchange Commission. SIGA urges investors and security holders to read those documents free of charge at the ~~risk that some amounts received and recorded as deferred revenue ultimately many not be recognized as revenue.~~SEC's website at http://www.sec.gov. All such forward-looking statements are current only as of the date on which such statements were made. SIGA does not undertake any obligation to update publicly any forward-looking statement to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated events.

More detailed information about SIGA and risk factors that may affect the realization of forward-looking statements, including the forward-looking statements in this presentation, is set forth in SIGA’s filings with the Securities and Exchange Commission, including this Quarterly Report on Form 10-Q and SIGA’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, and in other documents that SIGA has filed with the SEC. SIGA urges investors and security holders to read those documents free of charge at the SEC’s Web site at http://www.sec.gov. In addition, our website can be found on the internet at www.siga.com. The website contains information about us and our operations. Copies of each of our filings with the SEC on Form 10-K, Form 10-Q, and Form 8-K, and all amendments to those reports, can be viewed and downloaded free of charge as soon as reasonably practicable after the reports and amendments are electronically filed with or furnished to the SEC. To view the reports, access www.siga.com, click on “Investor Relations” and “Financial Information.” The information contained on, or that may be accessed through, our website or any social media accounts associated with us or our personnel is not incorporated by reference into, and is not a part of, this report. Forward-looking statements are current only as of the date on which such statements were made, and except for our ongoing obligations under the United States of America federal securities laws, we undertake no obligation to update publicly any forward-looking statements whether as a result of new information, future events, or otherwise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our investment portfolio includes cash and cash equivalents. Our main investment objectives are the preservation of investment ~~capital and the maximization of after-tax returns on our investment portfolio.~~capital. We believe that our investment policy is conservative, both in the duration of our investments and the credit quality of the investments we hold. We do not utilize derivative financial instruments, derivative commodity instruments or other market risk sensitive instruments, positions or transactions to manage exposure to interest rate changes. As such, we believe that the securities we hold are subject to market risk and changes in the financial standing of the ~~issuer~~issuers of such securities and our interest income is sensitive to changes in the general level of U.S. interest rates. Additionally, we are also subject to the risk of rising LIBOR rates; in the event that the minimum rate among one-month, two-month, three-month and six-month LIBOR rates (“minimum LIBOR rate”) is above 1%, then the interest rate charged on the Term Loan could increase materially depending on the magnitude of any increase in LIBOR rates. For every increase of 0.50% in the minimum LIBOR rate (e.g. an increase from a LIBOR rate of 1.25% to 1.75%), annual interest payments on the

Term Loan would increase by $405,556. Furthermore, we are subject to the impact of stock price fluctuations of our common stock in that we have a liability classified warrant in which 2.7 million shares of SIGA common stock can be purchased at a strike price of $1.50. For every $1 increase in the stock price of SIGA, the intrinsic value of the liability classified warrant will increase by $2.7 million.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of ~~September~~June 30, ~~2017.~~2022. The term “disclosure controls and procedures” is defined in Rules 13a-15(e) and 15d-15(e) under the ~~Securities and~~ Exchange ~~Act of 1934.~~Act. Management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of ~~September~~June 30, ~~2017 at a reasonable level of assurance.~~

2022.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended ~~September~~June 30, ~~2017~~2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II-OTHER INFORMATION

Item 1.Legal Proceedings

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, including collections claims, breach of contract claims, labor and employment claims, tax related matters 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, condensed 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.

Item 1A. Risk Factors

Our results of operations and financial ~~conditions~~condition are subject to numerous risks and uncertainties described in our ~~2016~~2021 Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~

2021. There have been no material changes to the risk factors described in Part I, Item 1A "Risk Factors" of our 2021 Form 10-K.

Item 2. Unregistered ~~Sale~~Sales of Equity Securities and Use of Proceeds

~~None.~~

On May 12, 2022, the Company issued 824,903 shares of its common stock to OCM Strategic Credit SIGTEC Holdings, LLC (the “Investor”) on a net basis upon the full exercise of a warrant to purchase common stock of the Company. To exercise the warrant, the Investor surrendered to the Company 222,393 shares of common stock otherwise issuable under the warrant in order to effect the full warrant exercise. The exercise price of the warrant was $1.50 per share. Such shares were issued pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder, and the issuance did not involve any underwriters, underwriting discounts or commissions, or any public offering. The Investor is an accredited investor, and the Company issued the shares without any general solicitation or advertisement.

ISSUER PURCHASES OF EQUITY SECURITIES

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs		Dollar Value of Shares That May Yet Be Purchased Under the Programs
April 1, 2022 to April 30, 2022		304,100	$	7.03		304,100	$	36,763,812
May 1, 2022 to May 31, 2022		190,879		7.53		190,879		35,325,830
June 1, 2022 to June 30, 2022		-		-		-		35,325,830
		494,979	$	7.23		494,979

On August 5, 2021, the Company announced that the Board of Directors authorized a share repurchase program under which the Company may repurchase up to $50 million of the Company's common stock through December 31, 2023. The Company started repurchasing shares under this program in the fourth quarter of 2021. The timing and actual number of shares repurchased will depend on a variety of factors, including: the timing of exercise of procurement options under government contracts; alternative opportunities for strategic uses of cash; the stock price of the Company’s common stock; market conditions; alternative capital management uses of cash; and other corporate liquidity requirements and priorities.

Item 3. Defaults upon Senior Securities

None.

Item 4.Mine Safety Disclosures

No disclosure is required pursuant to this item.

Item 5. Other Information

No disclosure is required pursuant to this item.

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Item 6.Exhibits

Exhibit No.	Description
3.1		Amended and Restated Certificate of Incorporation of SIGA Technologies, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of the Company filed on June 16, 2022).
~~Exhibit~~ ~~No.~~ 3.2		~~Description~~Amended and Restated By-laws of SIGA Technologies, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of the Company filed on December 15, 2021).
31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
~~10.1~~ 101.INS		~~Amendment to Credit Agreement dated August 29, 2017~~
~~10.2~~		~~Commercial Lease Agreement for Corvallis, Oregon date November 3, 2017~~
~~101.INS~~		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH		Inline XBRL Taxonomy Extension Schema
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase
104	Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



		SIGA TECHNOLOGIES, INC.
		(Registrant)

Date:	~~November 7, 2017~~ August 4, 2022	By:	/s/ Daniel J. Luckshire
			Daniel J. Luckshire
			Executive Vice President and
			Chief Financial Officer
			(Duly Authorized Officer, Principal Financial Officer and
			Principal Accounting Officer)


☒
x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the Quarterly Period Ended ~~September~~June 30, ~~2017~~2022
	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

~~Delaware~~	~~13-3864870~~
(State or other jurisdiction of incorporation or organization)	(IRS Employer ~~Identification.~~Identification No.)
~~incorporation or organization)~~

27 31 East 62nd Street	10065
New York, NY	(zip code)
(Address of principal executive offices)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
common stock, $.0001 par value	SIGA	The Nasdaq Global Market



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.

		~~Page No.~~
PART I-FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	32
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1716
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2122
Item 4.	Controls and Procedures	22

PART ~~II- OTHER~~II-OTHER INFORMATION
Item 1.	Legal Proceedings	23
Item 1A1A.	Risk Factors	23
Item 2.	Unregistered ~~Sale~~Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	24
SIGNATURES		25



	September 30, 2017			December 31, 2016
ASSETS
Current assets
Cash and cash equivalents	$	25,798,125		$	28,701,824
Restricted cash and cash equivalents, short-term	10,408,810			10,138,890
Accounts receivable	612,166			3,154,370
Inventory	2,983,249			26,209,964
Prepaid expenses and other current assets	1,092,396			954,426
Total current assets	$	40,894,746		$	69,159,474

Property, plant and equipment, net	119,735			299,477
Restricted cash and cash equivalents, long-term	9,430,016			17,333,332
Deferred costs	96,741,244			72,649,277
Goodwill	898,334			898,334
Other assets	642,083			642,083
Total assets	$	148,726,158		$	160,981,977
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current liabilities
Accounts payable	$	1,362,331		$	2,517,072
Accrued expenses and other current liabilities	4,320,994			4,584,752
Warrant liability	7,355,033			6,727,409
Total current liabilities	13,038,358			13,829,233
Deferred revenue	377,447,093			367,483,905
Deferred income tax liability, net	306,449			286,066
Other liabilities	844,407			247,989
Long-term debt	69,916,765			66,553,053
Total liabilities	461,553,072			448,400,246
Commitments and Contingencies
Stockholders’ deficiency
Common stock ($.0001 par value, 600,000,000 shares authorized, 78,908,929 and 78,692,612 issued and outstanding at September 30, 2017, and December 31, 2016, respectively)	7,890			7,869
Additional paid-in capital	214,238,249			213,714,154
Accumulated deficit	(527,073,053		)	(501,140,292		)
Total stockholders’ deficiency	(312,826,914		)	(287,418,269		)
Total liabilities and stockholders’ deficiency	$	148,726,158		$	160,981,977



	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Revenues
Research and development	$	1,390,254		$	4,658,355		$	10,856,601		$	7,829,402

Operating expenses
Selling, general and administrative	3,093,926			2,855,255			9,022,039			9,276,507
Research and development	2,470,835			6,068,567			13,899,162			11,553,469
Patent expenses	250,857			230,246			688,471			689,651
Lease termination	1,225,421			—			1,225,421			—
Interest on PharmAthene liability	—			3,566,451			—			10,716,276
Total operating expenses	7,041,039			12,720,519			24,835,093			32,235,903
Operating loss	(5,650,785		)	(8,062,164		)	(13,978,492		)	(24,406,501		)
Interest expense	(3,737,175		)	(94,776		)	(10,995,900		)	(104,991		)
Loss from change in fair value of warrant liabilities	(295,771		)	(1,121,530		)	(627,624		)	(1,121,530		)
Other income, net	2,021			30,756			11,818			100,556
Reorganization items, net	—			—			—			(3,716,902		)
Loss before income taxes	(9,681,710		)	(9,247,714		)	(25,590,198		)	(29,249,368		)
(Provision)/Benefit for income taxes	(134,668		)	4,072			(342,563		)	(8,692		)
Net and comprehensive loss	$	(9,816,378	)	$	(9,243,642	)	$	(25,932,761	)	$	(29,258,060	)

Loss per share: basic and diluted	$	(0.12	)	$	(0.17	)	$	(0.33	)	$	(0.54	)
Weighted average shares outstanding: basic and diluted	78,908,929			54,284,296			78,842,611			54,205,354



	As of
	September 30, 2017		December 31, 2016
Work in-process	$	2,025,445	$	18,916,084
Finished goods	957,804		7,293,880
Inventory	$	2,983,249	$	26,209,964



	Fair Value Measurements of Level 3 liability classified warrant
Warrant liability at December 31, 2016	$	6,727,409
Increase in fair value of warrant liability	627,624
Warrant liability at September 30, 2017	$	7,355,033



	Lease Termination liability
Balance at December 31, 2016	$	—
Charges (recorded in the quarter ended September 30)	1,096,648
Cash payments, net of sublease income	(206,457		)
Balance at September 30, 2017	$	890,191



	Nine months ended September 30,
	2016
Legal fees	$	1,951,381
Professional fees	1,732,521
Trustee fees	$	33,000
Total	$	3,716,902