SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended September 30, 1999
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
Commission file number 0-23047
SIGA PHARMACEUTICALS, INC.
(Exact name of small business issuer as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
13-864870
(IRS Employer Identification No.)
420 Lexington Avenue, New York, New York 10170
(Address of principal executive offices)(Zip Code)
(212) 672-9100
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months, and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
As of September 31, 1999, the Registrant had 6,577,712 shares of its Common
Stock outstanding.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
September 30, December 31,
1999 1998
------------------ ----------------
ASSETS
Current Assets
Cash and cash equivalents $ 2,536,084 $ 4,966,873
Prepaid expenses 24,892 134,969
------------------ -------------------
Total current assets 2,560,976 5,101,842
Equipment, net 1,475,122 1,696,404
Investments - 132,220
Other assets 147,002 147,002
------------------ -------------------
Total assets 4,183,100 7,077,468
================== ===================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable 296,632 266,371
Accrued expenses 64,129 143,364
Capital lease obligations 322,819 369,288
------------------ -------------------
Total liabilities 683,580 779,023
Non current capital lease obligations 468,443 650,659
Commitments and contingencies - -
Stockholders' equity
Preferred stock ($.0001 par value,
10,000,000 shares authorized,
none issued and outstanding) - -
Common stock ($.0001 par value,
25,000,000 shares authorized,
6,577,712 and 6,577,712
issued and outstanding at September 30, 1999
and December 31, 1998, respectively) 658 658
Additional paid-in capital 16,771,334 16,697,424
Unrealized losses on available
for sale securities - (34,816)
Deficit accumulated during
the development stage (13,740,915) (11,015,480)
------------------ -------------------
Total stockholders' equity 3,031,077 5,647,786
------------------ -------------------
Total liabilities and
stockholders' equity 4,183,100 7,077,468
================== ===================
The accompanying notes are an integral part of these financial statements
<PAGE>
SIGA PHARMACEUTICALS, INC.
(A development stage company)
STATEMENT OF CASH FLOWS
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For The Period
December 28,
1995 (Date of
Nine Months Ended Inception) to
September 30 September 30, September 30,
1999 1998 1999
-----------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited)
Cash flows from operating activities:
Net loss $ (2,725,435) $ (5,478,282) $ (13,740,915)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation 275,866 92,684 503,847
Stock, options & warrant compensation 73,910 102,127 700,230
Amortization of debt discount - - 133,000
Write-off of in-process research and development - 1,457,458 1,457,458
Realized gain on sale of marketable securities (66,660) (66,660)
Changes in assets and liabilities:
Accounts receivable - 150,000 -
Prepaid sponsored research 11,684 -
Prepaid expenses and ither current assets 110,077 (109,960) (24,892)
Other assets - (17,547) (147,002)
Accounts payable and accrued expenses (48,974) 52,774 360,761
-----------------------------------------------------------------
Net cash used in operating activities (2,381,216) (3,739,062) (10,824,173)
-----------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (54,584) (793,643) (1,978,969)
Purchase of minority interest (80,047) (167,036)
Proceeds on sale of securities 233,696 - 233,696
-----------------------------------------------------------------
Net cash flow used in investing activities 179,112 (873,690) (1,912,309)
-----------------------------------------------------------------
Cash flows from financing activities:
Net proceeds from issuance of common stock - 14,480,056
Receipts of stock subscriptions outstanding - 1,248
Deferred offering costs - -
Proceeds from bridge notes - 1,000,000
Repayment of bridge notes (1,000,000)
Proceeds from sale and leaseback of equipment 1,139,085
Principal payments on capital lease obligations (228,685) (45,358) (347,823)
-----------------------------------------------------------------
Net cash provided from financing activities (228,685) (45,358) 15,272,566
-----------------------------------------------------------------
Net increase in cash and cash equivalents (2,430,789) (4,658,110) 2,536,084
Cash and cash equivalents at beginning of period 4,966,873 10,674,104 -
-----------------------------------------------------------------
Cash and cash equivalents at end of period $ 2,536,084 $ 6,015,994 $ 2,536,084
-----------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
For The Period
December 28,
Three Months Ended Nine Months Ended 1995 (Date of
September 30, September 30, Inception) to
1999 1998 1999 1998 September 30, 1999
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues - Research and development
contracts $147,500 $ 112,500 372,500 337,500 $ 1,497,500
-------- --------- ------- ------- -----------
General and administrative (including amounts to
related parties of $122,502 and $113,074 for the
three months ended September 30, 1999 and 1998,
respectively, and $370,765 and $349,667 for the nine
months ended September 30, 1999 and 1998, respectively $ 551,346 835,788 1,607,104 2,281,948 6,735,370
Research and development (including amounts
to related parties of $18,750 and $5,980 for the
three months ended September 30, 1999 and 1998, 489,180 656,754 1,561,933 2,258,834 6,098,678
respectively, and $56,250 and $62,230 for the
nine months ended September 30, 1999 and 1998, respectively
Write-off in-process research and development - - 1,457,458 1,457,458
Patent preparation fees 14,472 44,492 137,175 131,214 1,074,452
Stock option and warrant compensation - - 14,407 450,450
------ ------ ------ -------
Total operating expenses 1,054,998 1,537,034 3,306,212 6,143,861 15,816,408
--------- --------- --------- --------- ----------
Operating income (907,498) (1,424,534) (2,933,712) (5,806,361) (14,318,908)
-------- ---------- ---------- ---------- -----------
Interest income/(expense) 39,267 78,471 141,617 328,079 511,333
Net gain on sale of securities - - 66,660 - 66,660
-------- ---------- ------ ------ -----------
Net loss $ (868,231) $(1,346,063) $ (2,725,435) $(5,478,282) $ (13,740,915)
---------- ----------- ------------ ----------- -------------
Other comprehensive income
Unrealized gains on available for sale securities - - 34,816 - -
---------- ---------- ------ ----------- ------------
Comprehensive income/(loss) $ (868,231) $(1,346,063) $ (2,690,619) $(5,478,282) $ (13,740,915)
Basic and diluted loss per share $ (0.13) $ (0.20) $ (0.41) $ (0.84)
======= =========== ============ ===========
Weighted average common shares outstanding used
for basic and diluted loss per share 6,577,712 6,577,712 6,577,712 6,527,321
</TABLE>
<PAGE>
SIGA Pharmaceuticals
NOTES TO THE SEPTEMBER 30, 1999 FINANCIAL STATEMENTS
1. Basis of Presentation
The financial statements of SIGA Pharmaceuticals, Inc. have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the rules of the Securities and Exchange Commission
(the "SEC") for quarterly reports on forms 10-QSB and do not include all of the
information and footnote disclosures required by generally accepted accounting
principles for complete financial statements. These statements should be read in
conjunction with the Company's audited financial statements and notes thereto
for the year ended December 31, 1998, included in the 1998 Form 10-KSB.
In the opinion of management, the accompanying unaudited financial
statements include all adjustments, consisting of normal adjustments, necessary
for a fair presentation of results of operations for the interim periods. The
results of operations for the nine months ended September 30, 1999 are not
necessarily indicative of the results of operations to be expected for the full
year ending December 31, 1999.
2. License and Research Support Agreements
In February of 1998, the company entered into a research collaboration
and license agreement with Washington University. Under the terms of the
agreement, the Company has been granted an exclusive world-wide license to make,
use and sell products derived from the licensed technology, in exchange for
royalty payments equal to a certain percentage of net sales of products
incorporating the licensed technology, and certain milestone payments. In
addition, the Company agreed to sponsor further research by the third party for
the development of the licensed technology. In July 1997, the company entered
into a separate consulting agreement with a faculty member of the University. A
dispute has arisen between the Company and the University and the consultant
regarding, among other things, the performance of the parties under the
agreements. In May 1999, the University sent the Company notice of intent to
terminate the agreement in 90 days claiming certain payments were not made. It
is the Company's position that, among other things, such payments are not owed
due to the University's failure to perform. Under the arbitration clause of the
agreement, the University, in July 1999, commenced an arbitration seeking an
award in the amount of $230,000. The Company also commenced an arbitration
seeking a determination that such amount is not owed the University and seeking
its own award of $5 million. Under the terms of the agreement, the agreement
will terminate 90 days after the resolution of the dispute, upon written notice
by the University and the Company does not make such payments within such 90 day
period. In addition, the Company has filed a lawsuit against the consultant for,
among other things, interfering with the Company's contract with the University
and for making certain alleged misrepresentations to the Company. During the
nine months ended September 30, 1999 and 1998 the company incurred sponsored
research expense of approximately $229,355 and $140,397 under this agreement. In
September 1999 the parties to the arbitration agreed to the abeyance of their
arbitration claims while they attempt to reach a negotiated settlement of the
dispute. At this time, no settlement of any of the issues in the dispute has
occurred and no assurance can be given that a settlement of any issues will be
reached.
In July and September, 1999 the Company was awarded two Phase I
research grants by the Small Business Innovation Research Program (SBIR) of
$109, 072 and $293,446 respectively. The first grant is to help support the
Company's antibiotic discovery efforts for the period July 1, 1999 through
December 31, 1999. The second grant will provide support for the Company's
effort to develop a vaccine targeting strep throat. The Company's strep program
is being developed through a collaboration with the National Institutes of
Health (NIH). The grant award is for a period of twelve months beginning on
October 1, 1999.
3. Grants of Warrants and Options
In September 1999, the Company granted two of its directors 15,000
options to purchase shares of the Company's common stock at an exercise price of
$1.0 per share. These options become exercisable on the first, second and third
anniversary of the date of the grant.
In September 1999, the Company entered into a consulting agreement with
one of its directors under which the director will provide the Company with
business valuation services in exchange for warrants to purchase 100,000 shares
of the Company's common stock. Of these warrants, 50,000 vested on the date of
the grant and the remainder 50,000 will vest on the first anniversary of the
consulting agreement. The exercise price of the warrants equals the market price
on the date they vest. The warrants become exercisable one year after they vest.
4. Subsequent Event
In October 1999 the Company entered into an agreement with a software
and web developer. Under the terms of the agreement the Company will acquire and
the software company will continue to develop, the source code for a
client/server chat and instant messaging application. The application is
designed to enable peer-to-peer communication and facilitate the building of
on-line communities. In exchange, the Company will pay the developer $200,000,
payable in three installments, and a grant of 125,000 shares of common stock.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
The following discussion should be read in conjunction with the financial
statements and related notes which are included under Item 1. Statements made
below which are not historical facts are forward-looking statements.
Forward-looking statements involve a number of risks and uncertainties
including, but not limited to, general economic conditions, our ability to
complete development and then market our products, competitive factors and other
risk factors as stated in other of our public filings with the Securities and
Exchange Commission.
Overview
The Company is a development stage, biopharmaceutical company. Since its
inception in December 1995, the Company's efforts have been principally devoted
to research and development, securing patent protection, obtaining corporate
relationships and raising capital. Since its inception through September 30,
1999, the Company has sustained cumulative losses of $13,740,915, including
non-cash charges in the amount of $1,457,458 for the write-off of research and
development expenses associated with the acquisition of certain technology
rights acquired from a third party in exchange for the Company's common stock.
In addition, a non-cash charge of $450,450 was incurred for stock option and
warrant compensation expense. The Company's losses have resulted primarily from
expenditures incurred in connection with research and development, patent
preparation and prosecution and general and administrative expenses. From
inception through September 30, 1999, research and development expenses amounted
to $6,098,678, patent preparation and prosecution expenses totaled $1,074,452,
general and administration expenses amounted to $6,735,370. From inception
through September 30, 1999, total revenues from research and development
agreements and government grants totaled $1,497,500.
In September 1999, the Company announced that its Board of Directors approved
the Company's intent to evaluate a number of strategic alternatives outside the
biotechnology area. The options include the development or acquisition of an
Internet technology or a merger with a private or public Internet company. At
the same time, the Company announced that it would consolidate its biotechnology
assets and operations in its research facility in Corvallis, Oregon. The
Company's goal is to fund its ongoing vaccine and antibiotic programs through a
combination of government grants, corporate partnerships and strategic
alliances. No assurance can be given that the Company will be successful in
obtaining grants, partnerships and alliances. Until such relationships are
established, the Company expects to continue to incur significant research and
development costs in the future resulting form ongoing research and development
programs, manufacturing of products for use in clinical trials and pre-clinical
testing of the Company's products. The Company also expects that general and
administrative costs, including patent and regulatory costs, necessary to
support clinical trials, research and development, will continue to be
substantial in the future. Accordingly, the Company expects to incur operating
losses for the foreseeable future. There can be no assurance that the Company
will ever achieve profitable operations.
In October 1999 the company was informed that U.S. Patent No. 5,968,763 was
issued. The patent, issued to Rockefeller University, is licensed exclusively by
the Company and is for technology central to the Company's development of
gram-positive anti-infective products.
To date, the Company has not marketed, or generated revenues from the
commercialization of any products. The Company's current product candidates are
not expected to be commercially available for several years.
In October 1999, as part of its stated intention to pursue the development of a
strategic alternative in Internet technology, the Company entered into an
agreement with Open-i Media, Inc. (Open-i), a New York based software and web
developer. Under the terms of the agreement the Company will acquire, and Open-i
will further develop, the source code for a client/server chat and instant
messaging application. The Company has agreed to pay Open-i $200,000 in cash and
125,000 shares of the Company's common stock. Payment will be made in three
installments.
Results of Operations
Three months ended September 30, 1999 to the three months ended September 30,
1998
Revenues from research and development contracts and government grants was
$147,500 for the three months ended September 30, 1999, compared to 112,500 for
the same period of 1998. The revenue increase was the result of the company
being awarded a Small Business Innovation Research (SBIR) grant in July 1999.
The grant, to support the Company's antibiotic discovery efforts from July 1,
1999 through December 31, 1999, is for a total of $109,072. As of September 30,
1999 the Company had received $35,000 of the award. The remaining $112,500 of
revenue in each period was the result of payments made to the Company under an
agreement entered into in July of 1997 with Wyeth-Ayerst, whereby the Company
receives certain payments for research and development activities sponsored by
Wyeth-Ayerst.
Research and development expenses declined to $489,180 for the three months
ended September 30, 1999 from $656,754 for the same period in 1998. The
approximate 26% decrease in this area is the result of the decreased sponsored
research as more of the Company's research and development activities have been
transferred to the Company's facility. In addition, expenses in the prior year
period include certain one time payments associated with the start-up of the
research facility in Corvallis, Oregon.
General and administrative expenses declined approximately 34% in the three
months ended September 30, 1999 to $551,346 from $835,788 for the three months
ended September 30, 1998. The decrease from the prior year period reflects the
one time charge incurred in the September 30, 1998 period to settle the contract
of the former President of the Company combined with lower spending for outside
consultants, a reduction in administrative staff and materially reduced travel
expenses in the 1999 three month period.
Patent expense of $14,472 for the three months ended September 30, 1999
represents a decrease of approximately 67% from the $44,492 level of the prior
year. The decrease is the result of the Company's intent to tighten the focus of
its research and development activities on its lead vaccine and anti-infective
programs. As a result, a number of patent prosecutions have been discontinued.
Total operating loss for the three months ending September 30, 1999 was
$868,231, $477,832 less than the $1,346,063 loss incurred for the three month
period ending September 30, 1998. The decline in the net loss of approximately
35% is the result of higher revenues combined with lower spending for research
and development, general and administrative activities, and patent preparation
costs. The continued reduction of the net loss is consistent with the Company's
objective to lower operating cost in order to conserve cash.
Interest income for the three months ended September 30, 1999 was $39,267
compared to income of $78,471 for the prior year period. The decrease is the
result of lower cash balances available for investment purposes in the current
period.
Net loss per common share of $0.13 for the three months ended September 30, 1999
reflects a decrease in the loss per share of approximately 35% from the $0.20
per share loss sustained for the three months ended September 30, 1998. The
decline in the loss per share is primarily the result of increased revenue and
decreased operating costs incurred for the three month period ending September
30, 1999.
Nine months ended September 30, 1999 to the nine months ended September 30, 1998
Revenues from research and development contracts and government grants was
$372,500 for the nine months ended September 30, 1999 compared to $337,500 for
the nine months ended September 30, 1999. The approximate 10% increase was due
to the Company's receipt of an award of an SBIR grant in the current year
period. The grant is to help support the Company's antibiotic discovery efforts
during the six month period July 1, 1999 through December 31, 1999. As of
September 30, 1999 the company had received $35,000 of the total $109,072 grant
award. In addition to the grant income, the Company received $337,500 in both
nine month periods ending September 30, 1999 and September 30, 1998. The revenue
was the result of a payments made to the Company under an agreement entered into
in July of 1997 with Wyeth-Ayerst, whereby the Company receives certain payments
for research and development activities sponsored by Wyeth-Ayerst.
Research and development expenses for the nine months ended September 30,1999
were $1,561,933 compared to $2,258,834 for the nine month period ended September
30, 1998. The decrease in spending of approximately 31% is primarily the result
of a reduction in activity with higher cost third party entities, including
sponsored research at Universities, in favor of performing the work at the
Company's facility in Corvallis Oregon. The Company also incurred a non-cash
charge for the nine months ended September 30, 1998 totaling $1,457,458 for the
write-off of in-process research and development associated with the acquisition
of certain technology purchased from MedImmune, Inc. in exchange for 335,530
shares of the Company's common stock. No similar charges were incurred in the
same period of 1999.
General and administrative expenses decreased approximately 30% in the nine
months ended September 30, 1999 to $1,607,104 from $2,281,948 for the nine
months ended September 30, 1998. The principal factors in the decrease in
spending was the material reduction in general and administrative payroll
combined with a reduction of the use of consultants and significantly reduced
travel expenses.
Patent expense of $131,214 for the nine months ended September 30, 1998
increased approximately 5% to $137,175 for the nine months ended September 30,
1999. The higher spending level in 1999 was due to the expansion of coverage for
existing technologies as well as filing for additional patents on new technology
in the first six months of the year mainly offset by a reduction in the third
quarter caused by the Company's decision to focus more on its core lead programs
in vaccine and anti-infective product development.
Total operating loss decreased by approximately $2.9 million to $2,933,712 for
the nine months ended September 30, 1999 from $5,806,361 for the same period of
1998. The decrease in the operating loss is the result of higher revenues
combined with materially lower spending for research and development and general
and administrative activities. Excluding the one-time charge of $1,457,458
incurred in the nine month period of 1998 for the write-off of the in-process
R&D associated with the Company's purchase of certain technology from MedImmune,
the operating loss incurred in 1999 represents a 33% improvement from the prior
year.
Interest income for the nine months ended September 30, 1999 was $141,617
compared to $328,079 for the nine month period of the prior year. The decrease
was the result of the decrease in the cash available for investment in the
current period as the funds raised in the Company's initial public offering were
expended in accordance with the Company's development plan.
Net loss per common share of 0.84 for the nine months ended September 30, 1998
improved to $0.41 per share for the nine months ended September 30, 1999. The
loss per share was approximately 51% less in nine month period of 1999. The
reduction in the loss is the result of the Company's effort to reduce operating
cost in order to conserve cash.
Liquidity and Capital Resources
As of September 30, 1999 the Company had $2,536,084 in cash and cash equivalents
and $1,877,396 of working capital. In July, August and September of 1998, the
Company sold certain laboratory equipment, computer equipment and furniture to a
third party, for $493,329, $385,423 and $260,333, respectively, under
sale/leaseback arrangements. The leases have a term of 42 months and require
minimum monthly payments of $13,171, $10,290 and $6,950, respectively. The
Company has an option to purchase the equipment for Fair Market Value (defined
in the agreement as 15% of original cost) at the end of the lease. In July of
1997 the Company entered into a collaborative research and license agreement
with Wyeth-Ayerst. Under the terms of the agreement, the Company has granted
Wyeth-Ayerst an exclusive worldwide license to develop, make, use and sell
products derived from specified technologies. The agreement requires
Wyeth-Ayerst to sponsor further research by the Company for the development of
the licensed technologies for a period of two years from the effective date of
the agreement, in return for payments to the Company totaling $1,200,000. The
funding from the agreement has been expanded and extended on a quarter to
quarter basis through September 30, 1999. Through September 30, 1999 the Company
has received a total of $1,462,500 from Wyeth-Ayerst. In July and September 1999
the Company was awarded grants by the Small Business Innovation Research Program
(SBIR) of $109,072 and $293,446 respectively the first grant is to help support
the Company's antibiotic discovery efforts over the six month period July 1,
1999 through December 31, 1999. As of September 30, 1999, the Company has
received $35,000 of the grant award. The second grant is to help support the
Company's ongoing vaccine discovery effort in the area of streptococcus. This
program is being developed in collaboration with the National Institutes of
Health (NIH). The grant award is for a one year period beginning October, 1999.
The Company anticipates that its current resources will be sufficient to finance
the Company's currently anticipated needs for operating and capital expenditures
through the second quarter of 2000. In addition, the Company will attempt to
generate additional working capital through a combination of collaborative
agreements, strategic alliances and equity financings.
The Company's working capital and capital requirements will depend upon numerous
factors, including progress of the Company's research and development programs;
pre-clinical and clinical testing; timing and cost of obtaining regulatory
approvals; levels of resources that the Company devotes to the development of
manufacturing and marketing capabilities; technological advances; status of
competitors; and the ability of the Company to establish collaborative
arrangements with other organizations.
The Year 2000
The year 2000 computer system issue involves hardware and software programs that
recognize a date using "00" as the year 1900 rather than the year 2000 and could
result in errors or systems failures for many businesses, including the Company.
Recognizing the importance of minimizing the impact of potential disruptions to
the Company's business resulting from the year 2000 issue, the Company has
adopted a plan to review and correct any potential issues which could impact the
Company's operations. The plan addresses the state of readiness of internal
computer systems as well as significant external third party systems to handle
the risks associated with the year 2000 issue.
Internal Preparation. The two major areas of concern for computer systems
internal to the Company are the financial systems and the data collection
systems for the Company's research efforts.
The Company's financial records are maintained on readily available generic
programs purchased from various vendors. These programs are run on personal
computers and a network server for personal computers. All of the Company's
currently utilized systems have been installed or updated since the beginning of
1997. A required product specification for these new systems was that the
purchased systems were certified by the vendors as able to handle year 2000
issues properly (Y2k compliant). The critical financial systems addressed
include accounts payable, accounts receivable, cash management, general ledgers
and financial consolidation.
Information and data critical to the Company's research efforts are generally
maintained on printed records, however; many data summary, review and
communication activities utilize programs run on personal computers and a
network server for personal computers. The Company's critical systems for
research have been installed or updated in recent years and are Y2K compliant.
Additionally, the Company has a policy requiring maintenance of updated copies
of programs and files ("back up") in the case of possible system failures,
including year 2000 issue related failures. The back up material is maintained
at the Company's research facility and an additional copy is maintained at an
off site location.
The company currently believes that its systems are either fully Y2K compliant,
that the appropriate back up procedures exist or that the costs of addressing
any possible year 2000 issues will not have a material adverse impact on the
Company's operations or financial position.
Third Party Preparation. The Company has identified its critical third party
relationships in order to assess potential year 2000 issues with the third
party's computer systems that might impact the Company's operations. These
critical relationships include an outside payroll service, financial
institutions and various service vendors. The Company has evaluated the state of
readiness of its third party relationships by surveying these critical third
parties and seeking assurances that the third parties have addressed year 2000
issues involving systems important in the conduct of business with the Company,
or that plans are in place to assure that the systems are Y2K compliant before
the end of 1999. The Company completed a survey of critical third party
relationships during the third quarter of 1999 and believes there are no
significant year 2000 issues outstanding.
Compliance Costs. The Company's expenditures on its year 2000 issues to date
have been nominal, and the Company does not anticipate any significant future
costs associated with year 2000 issues.
Risks of the Company's year 2000 issues. The greatest risks to the Company are
potential failures of the computer systems of the Company's third party
relationships. The Company currently believes that the most likely worst case
scenario concerning the year 2000 issue involves potential business disruptions
among financial institutions with which the Company conducts business. If a
significant number of these financial institutions experience business
disruptions due to a year 2000 issue, the Company's cash flow could be
materially disrupted.
The Company believes that any year 2000 compliance problems of the Company, it's
customers or vendors will not have any material adverse effect on the Company's
business, results of operations and financial condition.
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) A financial data schedule is filed herewith as an exhibit.
(b) No reports on Form 8-K were filed during the quarter for which this
report is being filed.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this Report to be signed on its behalf by the undersigned thereto duly
authorized.
Date: November 15, 1999
SIGA PHARMACEUTICALS, INC.
By: /s/Thomas N. Konatich
Thomas N. Konatich
Chief Financial Officer
(Principal Accounting and Financial Officer
and Vice President, Finance
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 2,536,084
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,560,976
<PP&E> 1,988,969
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0
0
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</TABLE>
