What changed in this filing

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Item 1A. Risk Factors

2023-03-02 compared with 2022-03-03 · 90 added, 91 removed, 317 unchanged (36% of the section changed)

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Government contracts require ongoing funding decisions by governments.

A substantial percentage of our potential contract revenues would come from the 19C BARDA Contract, and the majority of the potential revenue under the 19C BARDA Contract is tied to options which may or may not be exercised at the sole discretion of BARDA.

A substantial percentage of our potential revenues come from government contracts.

The majority of potential revenue under the 19C BARDA Contract, the Company's largest procurement contract, is tied to options which may or may not be exercised at the sole discretion of BARDA.

Reduced or discontinued BARDA funding, or the non-exercise of contract options under the 19C BARDA Contract, could cause our business, financial condition, results of operations and prospects to suffer materially.

Government-funded contracts typically consist of a base period of performance and options for the performance of certain future activities.

Government-funded contracts often consist of a base period of performance and options for the performance of certain future activities.

The value of goods and services subject to options may constitute the majority of the total value of the underlying contract, as in the case of the 19C BARDA Contract.

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Our government customers are subject to political considerations and budgetary constraints, which result in uncertainties as to continued funding of their ongoing programs, including SIGA’s contracts.

More than 90% of remaining contract value of the 19C BARDA Contract is tied to options exercisable in the sole discretion of BARDA. There is no guarantee that any of the remaining options will be exercised, or if they are exercised when such exercise of options will occur.

As of December 31, 2022, more than 85% of remaining contract value of the 19C BARDA Contract is tied to options exercisable in the sole discretion of BARDA. There is no guarantee that any of the remaining options will be exercised, or if they are exercised when such exercise of options will occur.

If some of these options are not exercised, because levels of government expenditures and authorizations for biodefense decrease or shift to other programs, or for any other reason, our business, financial condition, results of operations and prospects may suffer materially.

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Our failure to anticipate significant technical problems, estimate costs accurately or control costs during performance of a fixed-price contract could reduce the profitability of such contract, or if severe, cause a loss, which could in turn negatively affect our operating results.

We expect future operating revenues to come significantly from contracts with BARDA for the provision and maintenance of the U.S.

We expect a substantial percentage of our future operating revenues to come from contracts with BARDA for the provision and maintenance of the U.S.

Government’s stockpile of TPOXX®.

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Laws and regulations affecting government contracts and grants might make it more costly and difficult for us to successfully conduct our business.

Our business with the U.S. Government, and any future business with state and local governmental agencies are subject to specific procurement regulations and a variety of other legal and compliance obligations.

Our business with the U.S. Government, international governments, and any future business with state and local governmental agencies are subject to specific procurement regulations and a variety of other legal and compliance obligations.

These laws and rules include those related to procurement integrity, rates and pricing of services and goods to be reimbursed by the U.S.

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Among the most significant government contracting regulations that affect our business are:

the Federal Acquisition Regulation and other agency-specific regulations supplemental to the Federal Acquisition Regulation, which comprehensively regulate the procurement, formation, administration and performance of government contracts;

the business ethics and public integrity obligations, which govern conflicts of interest and the hiring of former government employees, restrict the granting of gratuities and funding of lobbying activities and incorporate other requirements such as the Anti-Kickback Act and the Foreign Corrupt Practices Act;

government contracts;

export and import control laws and regulations, including laws, regulations and executive orders restricting the use and dissemination of information classified for national security purposes and the exportation of certain products and technical data.

Compliance with these obligations increases our performance and compliance costs.

Failure to comply with these regulations and requirements could lead to suspension or debarment, for cause, from government contracting or subcontracting for a period of time.

Failure to comply with these regulations and requirements could lead to suspension or debarment, for cause, from government contracting or subcontracting for a period of time and could result in significant civil or criminal penalties.

The termination of a government contract as a result of our failure to satisfy any of these obligations would have a material negative impact on our operations and harm our reputation and ability to procure other government contracts or grants in the future.

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decline to exercise an option to renew, or to exercise the maximum amount specified in, a contract or grant;

exercise an option to purchase only the minimum amount specified in a contract or grant;

claim rights to products or assets, including intellectual property, developed under a contract or grant;

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If the government terminates a contract or grant for default, the defaulting company is entitled to recover costs incurred and associated profits on accepted items only and may be liable for excess costs incurred by the government in procuring undelivered items from another source.

Our government contracts and grants, including the 19C BARDA Contract, could be terminated under these circumstances.

Our government contracts and grants could be terminated under these circumstances.

Government shutdown could negatively impact our business and liquidity.

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Risks Related to Regulatory Approvals

If we are not able to obtain regulatory approvals for certain additional indications or formulations of TPOXX®

from the FDA, we may not be able to realize the full benefits of any BARDA contracts and may not be able to commercialize such formulations or indications other than through existing sales to BARDA, and our ability to generate future revenue could be materially impaired.

The development and full commercialization of additional indications or formulations of TPOXX®

in the U.S., such as the intravenous formulation or indication of use for post-exposure prophylaxis, including the testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by comparable authorities in other countries and jurisdictions.

We could fail to achieve FDA or other regulatory approval of certain indications or formulations of TPOXX®, or there could be delays in such approval of TPOXX®, or the approved labeling for such indications or formulations of TPOXX®

If we are not able to obtain regulatory approvals for certain additional indications of TPOXX®

from the FDA, we may not be able to realize the full benefits of any BARDA contracts or may not be able to commercialize such indications other than through existing sales to BARDA, and our ability to generate future revenue could be materially impaired.

The development and full commercialization of additional indications of TPOXX®

in the U.S., such as the indication of use for post-exposure prophylaxis or treatment of mpox, including the testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by comparable authorities in other countries and jurisdictions.

We could fail to achieve FDA or other regulatory approval of certain indications of TPOXX®, or there could be delays in such approval of TPOXX®, or the approved labeling for such indications of TPOXX®

may differ from expectations.

Failure to obtain regulatory approval of certain indications or formulations for TPOXX®

Failure to obtain regulatory approval of certain indications for TPOXX®

may prevent us from fully commercializing TPOXX®

in the United States other than through existing sales to BARDA and may impact other regulatory authorities' future review of expanded formulations or indications of TPOXX®, which in turn, could adversely impact commercializing TPOXX®

in the United States for the mpox indication or may prevent us from getting procurement orders from the U.S.

Government for the post-exposure prophylaxis indication and may impact other regulatory authorities' future review of other indications of TPOXX®, which in turn, could adversely impact commercializing TPOXX®

in other countries, and such delays or required alterations to regulatory applications could also have a material adverse effect on future revenue opportunities for the Company.

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We cannot predict whether or when we will be permitted to commercialize TPOXX®

 other than the oral formulation for smallpox treatment.

We have received FDA approval only for the oral formulation of TPOXX®

in the U.S., not the intravenous or liquid suspension/pediatric formulation, or any other indication beyond treatment for smallpox, for TPOXX®. Because pharmaceutical manufacturers are only permitted to commercialize indications and formulations that have received FDA approval (or in other jurisdictions according to their applicable regulatory and legal frameworks), any regulatory or legal setbacks as described above could have an adverse impact on the Company’s ability to sell other formulations or for other uses of TPOXX®

in the U.S. other than the oral and intravenous formulations for smallpox treatment.

We have received FDA approval for the oral and intravenous formulations of TPOXX®

in the U.S., not the liquid suspension/pediatric formulation, or any other indication beyond treatment for smallpox, for TPOXX®. Because pharmaceutical manufacturers are only permitted to commercialize indications and formulations that have received FDA approval (or in other jurisdictions according to their applicable regulatory and legal frameworks), any regulatory or legal setbacks as described above could have an adverse impact on the Company’s ability to sell other formulations or for other uses of TPOXX®

pending such approvals.

Changing political or social factors and opposition, including protests and potential related litigation, may delay or impair our ability to market TPOXX®

Changing political or social factors and opposition, such as protests and potential related litigation, may delay or impair our ability to market TPOXX®

and any other biodefense product candidates and may require us to spend time and money to address these issues.

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and other products we develop may be harmed and we may need to expend time, attention and resources addressing such legal or publicity issues, thereby reducing our revenues and having a material adverse impact on us.

Our ability to grow our business may depend in part on our ability to achieve sales of TPOXX®

Our ability to grow our business may depend in part on our ability to achieve recurring sales of TPOXX®

to customers other than the U.S.

and Canadian governments.

Government, which may expose us to risks associated with conducting business in international markets.

An element of our business strategy is to sell TPOXX®

internationally to foreign governments, as well as to customers other than the U.S.

and Canadian governments.

These potential non-U.S.

internationally to foreign governments on a recurring basis.

These non-U.S.

Government customers include foreign governments, as well as state and local governments, non-governmental organizations focused on global health like the World Health Organization, health care institutions like hospitals (domestic and foreign) and certain large business organizations interested in protecting their employees against global threats and protecting first responders in cases of emergencies.

To the extent we seek such non-government sales in the U.S., we may need to meet additional regulatory requirements.

The market for sales of TPOXX®

customers other than the U.S.

Government is undeveloped, and we may not be successful in generating meaningful sales of TPOXX®, if any, to these potential customers.

If we fail to increase our sales of TPOXX®

If we fail to obtain recurring sales of TPOXX®

to customers other than the U.S.

and Canadian governments, our business and opportunities for growth could be limited.

We expect our future international revenues to depend heavily on the success of the efforts of Meridian pursuant to an International Promotion Agreement, which may not be successful. 

Government, our business and opportunities for growth could be limited.

In addition, the expansion of our international presence may increase certain risks, which include:

foreign governments imposing withholding or other taxes on remittances and other payments to us or the amount of any such taxes may increase;

potential difficulties enforcing agreements, collecting receivables and protecting our intellectual property and other assets;

regional safety and security considerations;

increased costs and risks relating to exportation, shipping and transportation of the Company’s products;

increased management and infrastructure costs.

See the risk factor below titled “

The Company is subject to complex and changing laws and regulations worldwide, which exposes the Company to potential liability, increased cost, and other adverse effects on the Company ’

s business ”

for more discussion of this risk.

We cannot predict the impact such events might have on the Company’s business, financial condition and results of operations.

Our current international revenues depend heavily on the success of the efforts of Meridian pursuant to an International Promotion Agreement. 

Pursuant to the International Promotion Agreement described under “Business,”

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Our future international revenues will likely depend heavily on the success of the efforts of Meridian pursuant to the International Promotion Agreement, which may not be successful.

The Company is reliant on Meridian to collect payments from international customers, and to remit the Company ’

s share of such payment to the Company.

Under the terms of the International Promotion Agreement, Meridian is responsible for collecting payments from customers and remitting such payments to us on a quarterly basis.

As a result, we are subject to Meridian’s ability to collect and remit payment to us in a timely manner.

Meridian could fail to perform such obligations adequately, cease operations abruptly or become insolvent, or our relationships with Meridian may otherwise change adversely.

If the foregoing were to occur, there could be an adverse impact on our business, financial condition and operating results as a result.

If we are unable to expand our internal sales and marketing capabilities or enter into agreements with third parties with expertise in sales and marketing, we may be unable to expand our sales of TPOXX®

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Although TPOXX®

is currently stockpiled only by the U.S.

and Canadian governments and not sold commercially, in the future we may be required to perform additional clinical trials or change the labeling of TPOXX®

is currently stockpiled by certain governments and not sold commercially, in the future we may be required to perform additional clinical trials or change the labeling of TPOXX®

if we or others identify side effects after we are on the market, which could harm future sales of such product.

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to non-government customers.

One significant example of recent legislative action is the Inflation Reduction Act of 2022 (the “IRA”), which was signed into law on August 16, 2022.

While the IRA is still subject to rulemaking (with more information to come via guidance documents from the responsible federal agencies), the IRA, as written, will, among other changes, give HHS the ability and authority to directly negotiate with manufacturers the price that Medicare will pay for certain high-priced drugs.

The IRA will also require manufacturers of certain Part B and Part D drugs to issue to HHS rebates based on certain calculations and triggers (i.e., when drug prices increase and outpace the rate of inflation).

At this time, we cannot predict the implications the IRA provisions will have on our business.

In addition, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “Healthcare Reform Act”), substantially changed the way healthcare is financed by both governmental and private insurers and had a substantial effect on the pharmaceutical industry.

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The Healthcare Reform Act and other healthcare reform measures that may be adopted in the future could have an adverse effect on our industry generally, as well as potential future sales and profitability of our current or future products.

Laws and regulations governing international operations may hinder us from developing, manufacturing and selling certain product candidates outside of the United States and require us to revise and implement costly compliance programs.

In connection with our International Promotion Agreement with Meridian, Meridian serves as the entity that markets and promotes oral TPOXX®

(except in the United States) and is the counterparty to any agreements within covered foreign jurisdictions.

As such, Meridian is responsible for anti-corruption compliance related to its activities.

The failure to comply with laws governing international business practices may result in substantial penalties, including suspension or debarment from government contracting.

Violation of the Foreign Corrupt Practices Act ("FCPA") can result in significant civil and criminal penalties that can be levied on the Company and its executives.

The Company is subject to complex and changing laws and regulations worldwide, which exposes the Company to potential liability, increased cost, and other adverse effects on the Company ’

Some laws and regulations governing our business, including the U.S.

Foreign Corrupt Practices Act (FCPA) and many other global anti-corruption laws, may hold the Company liable for the actions of our third-party partners. 

Although the Company has implemented policies and procedures designed to ensure compliance with applicable laws and regulations, there can be no assurance the Company’s employees, contractors, third parties or agents will not violate such laws and regulations or the Company’s policies and procedures.

Failure to comply with such laws and regulations could adversely affect the Company’s business, reputation, financial condition, or ability to procure government contracts. 

Indeed, violations of the FCPA can result in significant civil and criminal penalties that can be levied on the Company and its executives.

Indictment alone under the FCPA can lead to suspension of the right to do business with the U.S.

Government until the pending claims are resolved.

Conviction of a violation of the FCPA can result in long-term disqualification as a government contractor.

The termination of a government contract or relationship as a result of our failure to satisfy any of our obligations under laws governing international business practices could have a material negative impact on our operations and harm our reputation and ability to procure government contracts.

The SEC also may suspend or bar issuers from trading securities on United States exchanges for violations of the FCPA’s accounting provisions.

Other countries, such as the UK, have anti-bribery laws similar to or more expansive in scope than the FCPA which may be applicable to our operations as we expand outside the U.S.

Government until the pending claims are resolved and conviction under the FCPA can result in long-term disqualification as a government contractor. 

The SEC may also suspend or bar issues from trading securities on United States exchanges for violations of the FCPA’s accounting provisions.

We could incur net losses in the future if options are not exercised under the 19C BARDA Contract.

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Risks Related to Manufacturing, Storage and Our Dependence on Third Parties

If third parties on whom we rely for manufacturing and raw materials of TPOXX®, and managing our inventory, do not perform as contractually required or as we expect, we may not be able to successfully satisfy our obligations under the 19C BARDA Contract and our business would suffer.

If third parties on whom we rely for manufacturing and raw materials of TPOXX®, and managing our inventory, do not perform as contractually required or as we expect, we may not be able to successfully satisfy our obligations under any contracts, including the 19C BARDA Contract, and our business would suffer.

We currently rely on third-party manufacturers and service providers to provide raw materials and manufacture, package, test and ship TPOXX®.

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under the 19C BARDA Contract, entrusting such vendor or vendors with the care and handling of a substantial portion of IV TPOXX®

If a third-party provider fails to comply with applicable laws and regulations, fails to meet expected deadlines, fails to conduct trials in accordance with regulatory requirements or our stated protocols, experiences shortages or delays, or otherwise does not carry out its contractual duties to us, or encounters physical damage or natural disaster or disruptions at its facilities, for example as a result of the COVID-19 pandemic, our ability to meet our obligations under the 19C BARDA Contract or to develop, obtain approval of and commercialization of IV TPOXX®

If a third-party provider fails to comply with applicable laws and regulations, fails to meet expected deadlines, fails to conduct trials in accordance with regulatory requirements or our stated protocols, experiences shortages or delays, or otherwise does not carry out its contractual duties to us, or encounters physical damage or natural disaster or disruptions at its facilities, for example as a result of the COVID-19 pandemic, our ability to meet our obligations under any contract including the 19C BARDA Contract or to develop, obtain approval of and commercialization of other indications of TPOXX®

or other drug candidates, could be significantly impaired or delayed.

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We cannot be certain that our present or future manufacturers will be able to comply with these regulations and other FDA regulatory requirements or similar regulatory requirements outside the U.S.

In addition, due to the COVID-19 pandemic, regulatory authorities may not conduct required inspections at our CMO facilities, and without such inspections, drug approvals could be delayed.

Our government contracts and grants call for compliance with all applicable legal and regulatory requirements, however, we do not control third-party manufacturers and their methods for ensuring adherence to regulatory and legal standards.

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We have invested a substantial amount of our efforts and financial resources in the development of our drug candidates.

Our ability to generate near-term cash flows is primarily dependent on the success of our smallpox antiviral drug TPOXX®, which has only been approved by the FDA in oral form.

Our ability to generate near-term cash flows is primarily dependent on the success of our smallpox antiviral drug TPOXX®, which has been approved by the FDA in oral and intravenous forms and by select international regulatory agencies in the oral form.

The commercial success of our current and future drug candidates, new formulations or additional indications for TPOXX®, will depend on many factors, including:

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successful completion of clinical trials;

receipt of marketing approvals, including the impact of marketing restrictions or required post-approval clinical studies, from the FDA for IV and liquid suspension/pediatric formulations of TPOXX®

receipt of marketing approvals, including the impact of marketing restrictions or required post-approval clinical studies, from the FDA for liquid suspension/pediatric formulations of TPOXX®

and similar foreign regulatory authorities;

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If we are not successful in completing the development and commercialization of our drug candidates, whether due to our efforts or due to concerns raised by our governmental regulators or customers, our business could be materially adversely affected.

We may not be able to fully commercialize the IV and liquid suspension/pediatric formulation of TPOXX®, or other additional indications for TPOXX®, if our clinical trials do not demonstrate adequate safety or our animal studies do not demonstrate adequate efficacy.

We may not be able to fully commercialize the liquid suspension/pediatric formulation of TPOXX®, or other additional indications for TPOXX®, if our clinical trials do not demonstrate adequate safety or our animal studies do not demonstrate adequate efficacy.

Before obtaining regulatory approval for the sale of our drug candidates, extensive development is required.

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the required resources, regulations, or challenges associated with animal studies may increase and make our studies more difficult.

Intravenous and Liquid Suspension/Pediatric TPOXX®

formulations are currently in product development and there can be no assurance of successful development or ultimate commercialization beyond the 19C BARDA Contract.

The fact that the FDA has approved the oral formulation of TPOXX®

does not guarantee that our approach to drug development will be effective or will result in the successful commercialization of the IV or liquid suspension/pediatric formulation of TPOXX®, any new indication such as post-exposure prophylaxis, of TPOXX® or any other drug.

Liquid Suspension/Pediatric TPOXX®

formulations are currently in product development and there can be no assurance of successful development or ultimate commercialization.

The fact that the FDA has approved the oral and IV formulations of TPOXX®

does not guarantee that our approach to drug development will be effective or will result in the successful commercialization of the liquid suspension/pediatric formulation of TPOXX®, any new indication such as post-exposure prophylaxis, of TPOXX® or any other drug.

We cannot predict with certainty whether any other drug candidate or expanded indication resulting from our research and development efforts will be approved by the FDA.

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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 continually reviewing business and financial risks related to the 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 that constitute our supply chain, with respect to actions and risks caused by the COVID-19 pandemic.

Additionally, the Company’s supply chain for the manufacture of TPOXX®

and for the raw materials and supplies necessary to support manufacture and product delivery activities on future projects, could be materially disrupted by COVID-19. 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 pandemic, which has diverted government staff time that would normally be directed toward contract matters involving SIGA.

The Company expects to experience delays, or a slower than usual pace, in connection with certain research and development activities, such as those that involve clinical trials. While the Company does not currently expect any pandemic-related delays in research and development activities to have a material adverse impact on the financial condition or annual financial results of the Company, or its long-term performance, the Company cannot give assurances as to the full extent of the impact at this time.

Overall, while the COVID-19 pandemic has not adversely affected the liquidity position of the Company, the pandemic has diverted foreign government staff time normally directed toward contract matters involving SIGA and has affected and could continue to affect the timing of international contract awards for oral TPOXX®.

Additionally, although SIGA has completed delivery of TPOXX®

courses covered by the option exercised by the U.S.

Government in 2021, 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.

Furthermore, Executive Order 14042 by the President of the United States, which subjects federal prime contractors and subcontractors to certain vaccination requirements and other COVID-19 related safety measures, could have a material impact on the availability and/or timing of services provided to SIGA by certain vendors for supply chain activities and research and development activities.

The mandate has been challenged in several cases that are currently pending, and in at least one case a nationwide injunction has barred enforcement of the mandate while the cases are being pursued.

The future outcome of such litigation is uncertain, and consequently the scope and enforceability of the underlying vaccine mandate as it applies to federal contractors and subcontracts, is not known at this time.

If the general negative effect of the COVID-19 pandemic becomes more acute, including due to resurgences in infections or lack of vaccination, there could be material adverse effects to our business and cash flows.

Our business has been and will continue to be affected by the COVID-19 pandemic.

The full extent and nature to which the COVID-19 pandemic, and any related consequences, will impact our business, financial condition and results of operations is uncertain and cannot be predicted.

On September 9, 2021, President Biden directed the U.S.

Department of Labor’s Occupational Safety and Health Administration (“OSHA”) to issue an Emergency Temporary Standard (“ETS”) requiring that all employers with at least 100 employees ensure that their employees are fully vaccinated for COVID-19 or obtain a negative COVID-19 test at least once a week.

President Biden also issued an Executive Order requiring certain COVID-19 precautions for government contractors and their subcontractors, including mandatory employee vaccination (subject to medical and religious exemptions) that directly impacts SIGA given its government contracts. Both mandates were challenged in court.

On January 13, 2022, the U.S.

Supreme Court stayed the vaccine-or-test emergency temporary standard (ETS) that OSHA issued in November 2021.

The stay will be in effect until the claims contesting the ETS’

legality that are pending in the U.S.

Court of Appeals for the Sixth Circuit are fully resolved.

As a result, employers do not need to comply with the ETS and OSHA cannot enforce it.

Although the OSHA ETS is not in effect at this time, employers may be required under other laws to mandate vaccines (subject to accommodation obligations), such as under the federal vaccine mandate for healthcare workers and the New York City Order requiring vaccines.

The vaccine mandate for federal contractors and subcontractors is currently not in effect, as it was stayed by a court in December 2021.

It is not currently possible to predict with any certainty the exact impact on us given the requirements for government contractors and their subcontractors.

SIGA does not expect a material impact on the current workforce from any requirement to mandate COVID-19 vaccination of our workforce, however such requirements could result in employee attrition and difficulty securing future labor needs at our subcontractors, and therefore have an adverse effect on the amount and timing of future profits.

In addition, any requirement to impose obligations on our suppliers under the Executive Order covering government contractors and their subcontractors could impact the price and continuity of services provided in connection with the supply chain, commercial activities and research and development activities, which in turn could impact the Company’s performance under government contracts and the amount and timing of future profits.

The continuing direct and indirect impacts of the pandemic are significant and broad-based, including supply chain disruptions and labor shortages that started during the pandemic and continue to represent business and financial risks. 

As such, the Company is continually coordinating with service providers and vendors, in particular Contract Manufacturing Organizations that constitute our supply chain, with respect to risks and mitigating actions.

As of the filing date of this report, the Company has not identified or been notified by government customers of impediments to the 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 pace of execution of government contracts as well as new contract generation.

Additionally, the COVID-19 pandemic, and the secondary effects of the 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.

Furthermore, the pandemic and related secondary effects could result in a slower pace of future product deliveries if there are shortages or delays in the receipt by the supply chain of raw materials or supplies, or if labor shortages become more acute. 

While the Company does not currently expect such delays to have a material adverse impact on the financial condition of the Company or its long-term operating performance, and while the COVID-19 pandemic has not adversely affected the liquidity position of the Company, the Company cannot give assurances as to the full extent of the impact at this time.

Future acquisitions, strategic investments, partnerships or alliances could be difficult to identify and integrate, divert the attention of management, disrupt our business, dilute stockholder value, materially change the risk profile of the Company and/or adversely affect our operating results and financial condition.

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is currently identified as a covered countermeasure under the PREP Act declaration issued in October 2008, as amended, which provides us with substantial immunity with respect to the manufacture, administration or use of TPOXX®.

Under our BARDA Contracts, the U.S.

Under our BARDA Contract, the U.S.

Government should indemnify us against claims by third parties for death, personal injury and other damages related to TPOXX®, including reasonable litigation and settlement costs, to the extent that the claim or loss results from specified risks not covered by insurance or caused by our grossly negligent or criminal behavior.

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We cannot predict with certainty how, if at all, this may impact SIGA.

Our business and operations would suffer in the event of computer system failures, cyber-attacks or a deficiency in our cyber-security.

On January 17, 2023, we announced that Phillip Gomez had provided notice of his intention to retire as our Chief Executive Officer and a member of our Board in 2023.

The Board has initiated a search for Dr.

Gomez’s successor, and Dr.

Gomez is expected to remain in his current role as Chief Executive Officer until his successor commences service as Chief Executive Officer of the Company.

The search for and transition to a new Chief Executive Officer may result in disruptions to our business and uncertainty among our customers, employees and investors, which could adversely impact our business and results of operations.

Our business and operations would suffer in the event of a significant computer system failure, cyber-attack or deficiency in our cyber-security.

Despite the implementation of security measures, our internal computer systems, and those of third parties on which we rely, are vulnerable to damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, attachments to emails, persons inside our organization or persons with access to systems inside our organization.

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For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.

Also, confidential patient and other personal or sensitive information may be compromised in a cyber-attack or cyber-intrusion.

Also, our processing of sensitive information may subject us to data privacy and security obligations, and confidential patient and other personal or sensitive information may be compromised in a cyber-attack or cyber-intrusion.

In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws and other similar laws (e.g., wiretapping laws).

For example, the Health Insurance Portability and Accountability Act of 1996 imposes specific requirements relating to the privacy, security and transmission of individually identifiable health information.

If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with data privacy and security obligations, we could face significant consequences.

These consequences may include, but are not limited to, government enforcement actions, litigation, additional reporting requirements and/or oversight, bans on processing personal data, orders to destroy or not use personal data and imprisonment of Company officials.

To the extent that any disruption or security breach was to result in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur material legal claims and liability, damage to our reputation, and the further development of our drug candidates could be delayed.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors