What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-03-02 compared with 2022-03-03 · 242 added, 366 removed, 779 unchanged (44% of the section changed)

3 unchanged sentences

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Income (Loss)

Consolidated Statements of Operations and Comprehensive Income

Consolidated Statements of Changes in Stockholders’

Equity/(Deficiency)

Consolidated Statements of Cash Flows

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We have audited the accompanying consolidated balance sheets of SIGA Technologies, Inc.

and its subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of operations and comprehensive income (loss), of changes in stockholders' equity/(deficiency) and of cash flows for each of the three years in the period ended December 31, 2021, including the related notes (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive income, of changes in stockholders' equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

1 unchanged sentence

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Changes in Accounting Principles

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.

Basis for Opinions

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) Performance Obligations for the 19C BARDA and PEP Label Expansion R&D Contracts

As discussed in Notes 2 and 3 to the consolidated financial statements, all of the Company’s revenue for the year ended December 31, 2021 was generated from long-term contracts.

For these contracts, all revenue associated with current research and development performance obligations for the 19C BARDA and PEP Label Expansion R&D Contracts, which totaled approximately $4.8 million and $2.5 million respectively, is recognized over time, because the customer simultaneously receives and consumes the benefits provided by the services as the Company performs these services.

As discussed in Notes 2 and 3 to the consolidated financial statements, a portion of the Company’s revenue for the year ended December 31, 2022 was derived from long-term contracts.

For these contracts, all revenue associated with current research and development performance obligations for the 19C BARDA and PEP Label Expansion R&D Contracts, which totaled approximately $6.2 million and $17.9 million, respectively, 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 costs incurred relative to total estimated costs.

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As disclosed by management, due to the nature of the work required to be performed on many of the performance obligations, management’s estimation of total revenue and costs to satisfy the obligations is complex, subject to many variables, and requires significant judgment.

The incurred and estimated costs used in the measure of progress include third-party services performed, direct labor hours, and material consumed.  

The principal considerations for our determination that performing procedures relating to revenue recognition –

estimated costs to complete the R&D performance obligations for the 19C BARDA and PEP Label Expansion R&D Contracts is a critical audit matter are the significant judgments by management when determining the estimated costs to completely satisfy the performance obligations.

This in turn led to significant auditor judgment, subjectivity and effort in performing procedures and in evaluating the estimates of the costs to complete related to management’s estimates of total forecasted costs.   

estimated costs to complete the R&D performance obligations for the 19C BARDA and PEP Label Expansion R&D Contracts is a critical audit matter are the significant judgments by management when determining the estimated costs to completely satisfy the performance obligations.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included, among others, evaluating and testing management’s process for determining the estimated costs to completely satisfy each performance obligation for the 19C BARDA and PEP Label Expansion R&D Contracts, which included evaluating the reasonableness of management’s estimates of total forecasted costs.

Evaluating the reasonableness of management’s estimates of total forecasted costs involved assessing management’s ability to reasonably estimate costs to complete the performance obligation by (i) comparing, on a test basis, the underlying cost estimates to approved contracts or modifications;

Evaluating the reasonableness of management’s estimates of total forecasted costs involved assessing management’s ability to reasonably estimate costs to complete the performance obligation by (i) comparing, on a test basis, the underlying cost estimates to approved contracts or modifications;

(ii) comparing, on a test basis, the underlying transaction price to original contracts or modifications;

and (iii) testing actual costs incurred and their eligibility for billing under the research and development performance obligations.

/s/ PricewaterhouseCoopers LLP

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6,521,441  

6,639,211  

Other liabilities

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SIGA TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

For the Years Ended December 31

Product sales and supportive services

$ 126,802,536  

$ 115,471,071  

$ 11,190,064  

Research and development

6,867,918  

9,488,233  

15,552,021  

Total revenues

133,670,454  

124,959,304  

26,742,085  

Operating expenses

Cost of sales and supportive services

16,601,880  

14,797,419  

1,782,838  

Selling, general and administrative

17,323,429  

14,003,184  

13,252,136  

Research and development

9,942,194  

10,938,930  

13,303,149  

Patent expenses

710,152  

719,141  

726,105  

Total operating expenses

44,577,655  

40,458,674  

29,064,228  

Operating income (loss)

89,092,799  

84,500,630  

( 2,322,143 )

Operating income

Gain (loss) from change in fair value of warrant liability

117,770  

( 3,525,846 )  

5,091,256  

Loss on extinguishment of Term Loan

( 4,981,461 )  

Interest expense

( 3,016,817 )  

( 15,769,768 )

Other income, net

101,172  

532,085  

2,822,232  

Income (loss) before income taxes

89,311,741  

73,508,591  

( 10,178,423 )

(Provision) benefit for income taxes

( 19,860,975 )  

( 17,166,581 )  

2,937,276  

Net and comprehensive income (loss)

$ 69,450,766  

$ 56,342,010  

$ ( 7,241,147 )

Basic earnings (loss) per share

$ 0.92  

$ 0.71  

Diluted earnings (loss) per share

$ 0.91  

$ 0.71  

Income before income taxes

Provision for income taxes

Net and comprehensive income

Basic earnings per share

Diluted earnings per share

Weighted average shares outstanding:

75,322,194  

79,259,000  

81,031,254  

Weighted average shares outstanding:

76,402,716  

79,437,306  

82,175,023  

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

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

EQUITY/(DEFICIENCY)

For the Years Ended December 31, 2022, 2021 and 2020

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Income (Loss)

Equity/ (Deficiency)

Balances, December 31, 2019

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56,342,010  

Repurchase of common stock

( 4,628,473 )  

( 463 )  

( 28,502,483 )  

( 28,502,946 )

Issuance of common stock upon exercise of stock options

Issuance of common stock upon vesting of RSUs and exercise of stock-settled appreciation rights

11,822  

Issuance of common stock upon vesting of RSUs

177,876  

Issuance of common stock to employees

( 18 )  

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( 184,013 )  

( 1,176,556 )  

( 1,176,579 )

Stock-based compensation

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( 26,021,519 )

Issuance of common stock upon exercise of stock options

11,822  

Issuance of common stock upon vesting of RSUs

1 unchanged sentence

( 16 )  

Issuance of common stock upon exercise of warrants

393,646  

3,003,477  

3,003,517  

Payment of common stock tendered for employee stock-based compensation tax obligations

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( 13 )  

Issuance of common stock upon exercise of warrants

824,903  

6,120,695  

6,120,778  

Payment of common stock tendered for employee stock-based compensation tax obligations

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( 12,533 )  

Cash dividend ($ 0.45 per share)

( 32,940,395 )  

Stock-based compensation

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Cash flows from operating activities:

Net income (loss)

$ 69,450,766  

$ 56,342,010  

$ ( 7,241,147 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and other amortization

522,368  

529,814  

526,997  

(Gain) loss on change in fair value of warrant liability

( 117,770 )  

3,525,846  

( 5,091,256 )

Stock-based compensation

1,265,809  

1,350,948  

2,113,994  

Write down of inventory, net

618,771  

Deferred income taxes provision (benefit)

121,446  

11,606,949  

( 2,417,617 )

Deferred income taxes (benefit) provision

Loss on extinguishment of Term Loan

4,981,461  

Non-cash interest expense

887,132  

4,497,271  

Changes in assets and liabilities:

Accounts receivable

( 80,310,187 )  

827,733  

( 2,208,863 )

136,369  

( 8,009,992 )  

( 6,744,644 )

Prepaid expenses and other assets

48,963  

699,102  

Accounts payable, accrued expenses and other liabilities

986,865  

( 3,116,843 )  

936,839  

Income tax payable

18,287,487  

912,462  

Deferred revenue

483,749  

982,606  

( 1,861,605 )

Net cash provided by (used in) operating activities

11,494,636  

71,519,228  

( 18,204,303 )

Net cash provided by operating activities

Cash flows from investing activities:

Capital expenditures

( 50,620 )  

( 15,501 )  

Cash used in investing activities

( 50,620 )  

( 15,501 )  

Cash flows from financing activities:

Payment of employee tax obligations for common stock tendered

( 173,918 )  

( 184,016 )  

( 1,176,579 )

Repurchase of common stock

( 26,021,519 )  

( 28,502,946 )  

Repayment of Term Loan

( 85,913,459 )  

Payment of dividend

Cash used in financing activities

( 26,195,437 )  

( 114,600,421 )  

( 114,600,421

Net decrease in cash and cash equivalents

( 14,751,421 )  

( 43,096,694 )  

( 19,409,976 )

Cash, cash equivalents and restricted cash at the beginning of period

117,890,240  

160,986,934  

180,396,910  

Cash, cash equivalents and restricted cash at end of period

$ 103,138,819  

$ 117,890,240  

$ 160,986,934  

Cash and cash equivalents at end of period

Supplemental disclosure of cash flows information:

Non-cash lease right-of-use asset and associated liability (net of deferred rent in 2019)

$ 733,715  

$ 2,944,932  

Non-cash lease right-of-use asset and associated liability

Conversion of warrant to common stock

$ 3,003,517  

$ 1,172,801  

Issuance of common stock upon cashless exercise

$ 97,250  

$ 118,500  

Cash income taxes paid (refund), net

$ 1,063,744  

$ 3,718,581  

$ ( 1,276,129 )

Cash income taxes paid, net

The accompanying notes are an integral part of these financial statements

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(“SIGA”

or the “Company”) is a commercial-stage pharmaceutical company.

The Company's lead product, TPOXX®

(“oral TPOXX®”) is a United States Food & Drug Administration ("FDA")-approved oral formulation antiviral drug for the treatment of human smallpox disease caused by variola virus.

On July 13, 2018, the FDA approved oral TPOXX®.

Oral TPOXX®

is a novel, patented drug that is easy to store, transport and administer. Oral TPOXX®

labeling, approved by the FDA, limits sales of oral TPOXX®

to those for the U.S.

Strategic National Stockpile ("Strategic Stockpile").

or the “Company”) is a commercial-stage pharmaceutical company.

The Company sells its lead product, TPOXX® (“oral TPOXX®,” also known as "tecovirimat" in certain international markets), to the U.S.

government and international governments (including government affiliated entities).

Additionally, the Company sells the intravenous formulation of TPOXX® ("IV TPOXX®") to the U.S.

is an oral formulation antiviral drug for the treatment of human smallpox disease caused by variola virus.

On July 13, 2018, the United States Food & Drug Administration (“FDA”) approved oral TPOXX®

for the treatment of smallpox.

The Company has been delivering oral TPOXX®

to the Strategic Stockpile since 2013.

On December 1, 2021, the Company announced that Health Canada approved oral tecovirimat as an extraordinary use drug.

On January 10, 2022, a Marketing Authorisation Application ("MAA") with the European Medicines Agency ("EMA") for oral tecovirimat was approved. The MAA was filed under the centralized application process, which authorized the sale of oral tecovirimat in European Union member states, as well as Norway (which granted separate follow-on approval), Iceland, and Liechtenstein.

The EMA approved label indication covers the treatment of smallpox, monkeypox, cowpox, and vaccinia complications following vaccination against smallpox.

With respect to the regulatory approvals by Health Canada and the EMA, oral tecovirimat represents the same formulation that was approved by the FDA in 

Strategic National Stockpile ("Strategic Stockpile") since 2013.

In connection with IV TPOXX®, SIGA announced on May 19, 2022 that the FDA approved this formulation for the treatment of smallpox. 

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 ("mpox"), 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 

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Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the periods reported.

The most significant estimates include the variables used in the calculation of fair value of warrants granted or issued by the Company, reported amounts of revenue, and the valuation of deferred tax assets.

The most significant estimates include the variables used in the calculation of reported amounts of revenue recognized over time, and the valuation of deferred tax assets.

Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the financial statements in the period they are determined to be necessary.

Actual results could differ from these estimates.

Basis of Presentation

Basis of Presentation and Consolidation

The accompanying consolidated financial statements include the accounts of SIGA Technologies, Inc.

and its wholly owned subsidiaries.

All inter-company accounts and transactions have been eliminated in consolidation.

The consolidated financial statements and related disclosures are presented in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and reflect the consolidated financial position, results of operations and cash flows for all periods presented.

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As this Term Loan was repaid on March 13, 2020, the restricted accounts were closed in the second quarter of 2020.

There was no restricted cash or cash equivalents as of December 31, 2021 or 

There was no restricted cash or cash equivalents as of December 31, 2022 

The following table reconciles cash, cash equivalents and restricted cash per the consolidated statements of cash flows to the consolidated balance sheet for each respective period:

2 unchanged sentences

$ 65,249,072  

$ 100,652,809  

Restricted cash - short-term

95,737,862  

11,452,078  

Restricted cash - long-term

68,292,023  

Cash, cash equivalents and restricted cash

$ 160,986,934  

$ 180,396,910  

Concentration of Credit Risk

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The Company has not experienced any losses on its cash accounts and no allowance has been provided for potential credit losses because management believes the potential for losses is remote.

Collection of all receivables from international government sales is coordinated through the International Promotion Agreement with Meridian (see Note 3 ), under which Meridian invoices and collects payments from international customers and remits such collections, less Meridian's fees, to the Company under a quarterly process specified in the International Promotion Agreement. 

Accounts Receivable

Accounts receivable are recorded net of provisions for doubtful accounts.

At December 31, 2021 and 2020 , 98 % and 100 %, respectively, of accounts receivable represented receivables from the U.S.

An allowance for doubtful accounts is based on specific analysis of the receivables.

At December 31, 2022 and 2021 , 16 % and 98 %, respectively, of accounts receivable represent receivables from the U.S.

At December 31, 2022, 84 % of accounts receivable represent receivables from international sales, of which 65 % of accounts receivable are from sales to the Canadian government and 20 % of accounts receivable are from sales to a European government affiliated entity. Collection of receivables from international government sales is coordinated through the International Promotion Agreement with Meridian (see Note 3 ), under which Meridian invoices and collects payments from international customers and remits such collections, less Meridian's fees, to the Company under a quarterly process specified in the International Promotion Agreement. An allowance for doubtful accounts is based on specific analysis of the receivables.

At December 31, 2022 and 2021 , the Company had no allowance for doubtful accounts.

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otherwise, such costs are expensed as research and development. Inventory is evaluated for impairment periodically to identify inventory that may expire prior to expected sale or has a cost basis in excess of its net realizable value.

If certain batches or units of product no longer meet quality specifications or become obsolete due to expiration, the Company records a charge to write down such unmarketable inventory to its net realizable value.

If certain batches or units of product do not meet quality specifications or become obsolete due to expiration, the Company records a charge to write down such unmarketable inventory to its net realizable value.

Property, Plant and Equipment

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Warrant Liability

The Company accounts for warrants in accordance with the authoritative guidance which requires that free-standing derivative financial instruments with certain cash settlement features be classified as assets or liabilities at the time of the transaction, and recorded at their fair value.

Fair value is estimated using model-derived valuations.

Any changes in the fair value of the derivative instruments are reported in earnings or loss as long as the derivative contracts are classified as assets or liabilities.

The Company accounted for warrants in accordance with the authoritative guidance which requires that free-standing derivative financial instruments with certain cash settlement features be classified as assets or liabilities at the time of the transaction, and recorded at their fair value.

Fair value was estimated using model-derived valuations.

Any changes in the fair value of the derivative instruments were reported in earnings or loss as long as the derivative contracts were classified as assets or liabilities.

Revenue Recognition

All of the Company’s revenue is derived from long-term contracts that span multiple years.

The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”

1 unchanged sentence

 A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. As of December 31, 2022 , the Company's active performance obligations, for the contracts outlined in Note 3 , consist of the following:

five  performance obligations relate to research and development services;

two  relate to manufacture and delivery of product;

and one is associated with storage of product.

six  performance obligations relate to research and development services; and four  relate to manufacture and delivery of product.

Contract modifications may occur during the course of performance of our contracts.

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The Company’s performance obligations are satisfied over time as work progresses or at a point in time.

A portion of the Company’s revenue is derived from long-term contracts that span multiple years.

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.

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The incurred and estimated costs used in the measure of progress include third -party services performed, direct labor hours, and material consumed.

The Company accounts for shipping and handling activities as fulfillment costs rather than as an additional promised service.

Contract Estimates . Accounting for long-term contracts and grants involves the use of various techniques to estimate total contract revenue and costs.

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as of December 31, 2022 , the accounts receivable balance in the balance sheet includes approximately $ 40.9 million of unbilled receivables.

This amount primarily relates to international sales that are billed under the terms specified in the International Promotion Agreement with Meridian.

Under typical payment terms of fixed price arrangements, the customer pays the Company either performance-based payments or progress payments.

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As of December 31, 2022 , the aggregate amount of transaction price allocated to remaining performance obligations was $ 66.4 million.

The Company expects to recognize this amount as revenue within the next three years as the specific timing for satisfying the performance obligations is subjective and outside the Company’s control.

The Company expects to recognize this amount as revenue within the next three years as the specific timing for satisfying the performance obligations is subjective and is often outside the Company’s control.

The Company accounts for leases in accordance with ASC 842, Leases (“ASC 842”

Adoption of ASC 842 .

On January 1, 2019, the Company adopted ASC 842 using the modified retrospective approach as of the effective date of the standard without revising prior periods.

In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward its historical lease classification.

In addition, the Company elected the hindsight practical expedient to determine the lease term for existing leases.

The Company’s election of the hindsight practical expedient resulted in the extension of the Oregon lease term as it was determined that the first renewal option under this lease was expected to be exercised with a reasonable degree of certainty.

In the second quarter of 2019, the Company exercised the first renewal option under the Oregon lease.

The Company was required to record an operating lease right-of-use ("ROU") asset and a corresponding operating lease liability, equal to the present value of the lease payments at the adoption date.

In the determination of future lease payments, the Company has elected to aggregate lease components such as payments for rent, taxes and insurance costs with non-lease components such as maintenance costs and account for these payments as a single lease component.

The present value of the lease payments was determined using the Company's incremental borrowing rate.

The impact of adopting ASC 842 as of January 1, 2019 was the recording of operating lease right-of-use assets of approximately $ 2.9 million;

the recording of operating lease liabilities of approximately $ 3.3 million;

and a decrease to deferred rent of approximately $ 0.4 million.

The Company determines if an arrangement is a lease at inception.

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Research and Development

Research and development expenses include costs directly and indirectly attributable to the conduct of research and development programs, and performance pursuant to certain customer contracts, including employee related costs, materials, supplies, depreciation on and maintenance of equipment, the cost of services provided by outside contractors, including services related to the Company’s clinical trials and facility costs, such as rent, utilities, and general support services.

Research and development expenses include costs directly and indirectly attributable to the conduct of research and development programs, and performance pursuant to certain customer contracts, including employee related costs, materials, supplies, depreciation and maintenance of equipment, the cost of services provided by outside contractors, including services related to the Company’s clinical trials and facility costs, such as rent, utilities, and general support services.

All costs associated with research and development are expensed as incurred.

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The Company re-evaluates uncertain tax positions and considers factors, including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken on tax returns, and changes in circumstances related to a tax position.

The Company recognizes interest and penalties related to income tax matters in income tax expense.

Repurchase of shares

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As of December 31, 2022  and 

December 31, 2020 , the Company had approximately $ 0.1 million and $ 0.1 million, respectively, of cash and cash equivalents classified as Level 1 financial instruments. There were no Level 2 financial instruments as of December 31, 2021  or December 31, 2020 . 

December 31, 2021 , the Company had less than $ 0.1 million and approximately $ 0.1 million, respectively, of cash and cash equivalents classified as Level 1 financial instruments.

December 31, 2022 , the Company had approximately $ 40.5 million of cash equivalents classified as Level 2 financial instruments.

There were no Level 2 financial instruments as of 

December 31, 2021 . 

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

4 unchanged sentences

Exercise of warrants

( 6,120,778 )

Warrant liability at December 31, 2022

$ 6,521,441  

Loss Contingencies

11 unchanged sentences

Recent Accounting Pronouncements

In December 2019, the FASB issued ASU No.

2019 - 12, Simplifying the Accounting for Income Taxes , as part of its initiative to reduce complexity in accounting standards.

The amendments in the ASU are effective for fiscal years beginning after December 15, 2020, including interim periods therein.

The adoption of this standard in the first quarter of 2021 had no impact on the consolidated financial statements.

There have been no new accounting pronouncements not yet effective that have significance, or potential significance, to our Consolidated Financial Statements.

Procurement Contracts and Research Agreements

3 unchanged sentences

1,488,000 courses of oral TPOXX®

Strategic National Stockpile ("Strategic Stockpile"), and to manufacture and deliver to the Strategic Stockpile, or store as vendor-managed inventory, up to 

212,000 courses of the intravenous (IV) formulation of TPOXX®

(“IV TPOXX®”).

to the Strategic Stockpile, and to manufacture and deliver to the Strategic Stockpile, or store as vendor-managed inventory, up to 

212,000 courses of 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 December 31, 2021 , 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.

The $239.7 million of payments related to exercised options includes an option exercised on September 7, 2021 for the manufacture and delivery of approximately $ 112.6 million of oral TPOXX®.

As of December 31, 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 $ 268.9 million of payments are related to exercised options and up to approximately $ 281.9  million of payments are currently specified as unexercised options.

BARDA may choose in its sole discretion when, or whether, to exercise any of the unexercised options.

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("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®;

payments of approximately $ 32.0 million to fund reimbursed activities;

and payments of approximately $ 0.6 million for supportive procurement activities.

As of December 31, 2021 , the Company has received $ 11.1 million for the successful delivery of approximately 

As of December 31, 2022 , the Company had 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 and $ 13.8 million for other base period activities.

IV BDS is expected to be used for the manufacture of 

20,000 courses of IV FDP.

The $ 3.2 million received for the completed manufacture of IV BDS has been recorded as deferred revenue as of 

December 31, 2021 and December 31, 2020 ;

such amount is expected to be recognized as revenue when IV TPOXX®

containing such IV BDS is delivered to the Strategic Stockpile or placed in vendor-managed inventory.

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 $ 18.8 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 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 and accepted by the Strategic Stockpile.

The options that have been exercised to date provide for payments up to approximately $ 268.9 million.

2 unchanged sentences

726,140 courses of oral TPOXX®;

payments up to $ 25.6 million for the manufacture of courses of IV FDP, of which $ 10.2 million of payments relate to 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 $ 14.6 million for funding of post-marketing activities for oral TPOXX®.

As of December 31, 2021 , the Company has delivered approximately $ 225.1  million (including the value of raw materials) of oral TPOXX®

to the Strategic Stockpile, of which approximately $ 112.5 million was delivered in 2021 (including approximately $ 79.7 million of oral TPOXX®

that was delivered and invoiced in December 2021, for which full payment was received in January 2022);

and $ 7.3 million has been received or billed for in connection with post-marketing activities for oral TPOXX®. 

As of December 31, 2022 , the Company had received $ 225.1  million for the delivery (and related procurement of raw materials) of oral TPOXX®

to the Strategic Stockpile;

$ 10.2 million for the completed manufacture of IV BDS, which has been recorded as deferred revenue as of December 31, 2022 ;

and $ 7.3  million in connection with post-marketing activities for oral and IV TPOXX®. 

Unexercised options specify potential payments up to approximately $ 281.9 million in total (if all such options are exercised).

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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®;

payments of up to $ 51.2  million for the manufacture of courses of IV FDP, of which up to $ 20.5  million of payments would be paid upon the manufacture of IV BDS to be used in the manufacture of IV FDP;

and payments of up to approximately $ 5.6 million for supportive procurement activities.

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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.

To date, BARDA has exercised one of the three IV BDS options and one of the three IV FDP options, both of which were exercised simultaneously in 2022.

If BARDA decides to only exercise the remaining IV BDS Options, then the Company would receive payments up to $ 20.5  million;

alternatively, if BARDA decides to exercise all the remaining IV BDS Options and IV FDP Options, then the Company would receive payments up to $ 51.2  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.

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For the years ended December 31, 2022 and 2021 , the Company recognized revenues of $ 6.2 million and $ 4.8  million, respectively, on an over time basis.

In contrast, revenue recognized for product delivery and therefore at a point in time for the years ended December 31, 2021 and 2020 , was $ 112.5 million and $ 112.6 million, respectively. 

1C BARDA Contract ( 2011 BARDA Contract)

On May 13, 2011, the Company signed a contract with BARDA ( "1C BARDA Contract" or "2011 BARDA Contract") pursuant to which BARDA agreed to buy from the Company 1.7 million courses of oral TPOXX®, as well as provide development funding for certain activities.

The 1C  BARDA Contract specifies approximately $ 508.4 million of payments, of which, as of December 31, 2021 , $ 459.8 million had been received by the Company for the manufacture and delivery of oral TPOXX®

and $ 45.9 million had been received for certain reimbursements in connection with development and supportive activities.

Approximately $ 2.7 million remains eligible to be received in the future for reimbursements of development and supportive activities.

The 1C  BARDA Contract expires in December 2024.

Remaining performance obligations under the 1C  BARDA Contract generate revenue over time.

For the years ended December 31, 2021  and 

2020 , the Company recognized revenue of $ 0.2  million and $ 0.2 million, respectively, on an over time basis.

In contrast, no revenue was recognized for product delivery and supportive services and therefore at a point in time for the year ended December 31, 2021. 

Revenue recognized for product delivery and supportive services and therefore at a point in time for the year ended December 31, 2020, was $ 0.4 million.

In contrast, revenue recognized for product delivery and therefore at a point in time for the years ended December 31, 2022 and 2021 , was $ 7.2 million and $ 112.5  million, respectively. 

Department of Defense Procurement Contracts

On May 12, 2022, the Company announced a contract with the U.S.

Department of Defense ("DoD") for the procurement of oral TPOXX® ("DoD Contract #1" ). 

The DoD Contract #1 included a firm commitment for the DoD to procure approximately $ 3.6 million 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, fulfilling the firm commitment in DoD Contract #1.

In the third quarter of 2022, the DoD exercised the option for $ 3.8 million of oral TPOXX®

and the Company satisfied its obligation by delivering product and recognized the related revenue in September 2022. 

On September 28, 2022, the Company and the DoD signed a new procurement contract ("DoD Contract #2" ).

The DoD Contract #2 includes a firm commitment for the DoD to procure approximately $ 5.2  million of oral TPOXX®, and an option, exercisable at the sole discretion of the DoD for the procurement of approximately $ 5.5 million of oral TPOXX®.

International Procurement Contracts

On January 13, 2021, the Public Health Agency of Canada ("PHAC") awarded a contract to Meridian Medical Technologies, Inc. (“Meridian”) (the “Contract”) for the purchase of up to approximately $ 33  million of oral TPOXX® (tecovirimat) within five years. In January 2022, PHAC published a proposed amendment in which total procurement of oral TPOXX®

under the Contract would be increased to an amount of up to $ 38 million, with firm commitments for the cumulative purchase of approximately $ 23  million of oral TPOXX®

by March 31, 2023;

the remaining courses under the Contract are targeted for delivery after March 31, 2023 and are subject to option exercise by PHAC.

As of December 31, 2021, approximately $ 10 million of oral TPOXX®

courses had been delivered to and accepted by PHAC.

Such courses were delivered in the first six months of 2021.

On April 3, 2020, the Company announced that the Canadian Department of National Defence (“CDND”) awarded a contract (the "Canadian Military Contract") to Meridian, pursuant to which the CDND will purchase up to approximately $ 14 million of oral TPOXX®

over four years.

In the second quarter 2020, CDND purchased approximately $ 2  million of oral TPOXX®.

In the third quarter of 2021, CDND purchased another approximately $ 2 million of oral TPOXX®

The remaining purchases are at the option of the CDND.

Meridian is the CDND's counterparty under the Canadian Military Contract, and SIGA is responsible for manufacture and delivery of any oral TPOXX®

In 2022, the Company received firm commitment orders from 13  international customers (including Canada) for the delivery of approximately $ 77  million of oral TPOXX®, of which approximately $ 39  million is for Canada and approximately $ 38  million is for jurisdictions in Europe, Asia-Pacific, and the Middle East. Additionally, the contract with the Canadian Department of National Defence ("CDND") has an option until March 31, 2024, exercisable at its sole discretion, for the purchase of up to an additional $ 6 million of oral TPOXX®.

With respect to the $ 77  million of firm commitment orders that were received this year, approximately $ 71  million of oral TPOXX®

was delivered and recorded as revenue in 2022.

 Through an International Promotion Agreement (defined and discussed 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 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.

2022, all remaining amounts under the PHAC Contract of approximately $ 35  million of oral TPOXX®

were delivered to PHAC and recognized as revenue. 

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 in an option-based contract.

Prior to 2022, approximately $ 4  million of oral TPOXX®

had been ordered and delivered to the CDND.

In 2022, approximately $ 4 million of oral TPOXX®

was delivered and recognized as revenue under this contract, leaving 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").

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 any oral TPOXX®

purchased thereunder.

The PHAC and CDND contract awards were both 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 terms of the International Promotion Agreement, Meridian was granted exclusive rights to market, advertise, promote, offer for sale, or sell oral TPOXX®

Under the terms of the International Promotion Agreement, which has an effective date of May 31, 2019 and an initial term that expires on May 31, 2024, 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 commercialize any competing product, as defined in the International Promotion Agreement, in the specified field of use in the Territory.

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SIGA’s consent is required for the entry into any sales arrangement pursuant to the International Promotion Agreement.

The fee Meridian retains pursuant to the International Promotion Agreement is a specified percentage of the collected proceeds of sales of oral TPOXX®

net of certain expenses, for years in which customer invoiced 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 years in which such net invoiced amounts exceed the specified threshold.

Sales to international customers pursuant to the International Promotion Agreement are invoiced and collected by Meridian, and such collections are remitted, less Meridian's fees, to the Company under a quarterly process specified in the International Promotion Agreement. The fee Meridian retains pursuant to the International Promotion Agreement is a specified percentage of the 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 specified threshold.

We exceeded the specified threshold in 2022 and therefore recorded the higher specified percentage for all International Promotion Agreement sales in 2022.

Revenue in connection with international procurement contracts for the delivery of product are recognized at a point in time on a gross basis, as the Company acts as the principal in the transaction.

During the year ended December 31, 2021 , the Company recognized $ 12.7 million of revenue for deliveries to PHAC and CDND.

During the year ended December 31, 2022 , the Company recognized $ 71.0 million in connection with international orders.

During the year ended 

December 31, 2020 , the Company recognized $ 2.3 million of revenue for delivery to CDND. 

December 31, 2021 , the Company recognized $ 12.7 million of revenue on international orders, which comprised deliveries to PHAC and CDND. 

Research Agreements and Grants

The Company has an R&D program for IV TPOXX®.

This program is funded by the 19C BARDA Contract and a separate development contract with BARDA ("IV Formulation R&D Contract").

The IV Formulation R&D Contract has a period of performance that terminates in February 2024.

As of December 31, 2021 , the IV Formulation R&D Contract provided for future aggregate research and development funding of up to approximately $ 0.5 million.

Revenues in connection with the IV Formulation R&D Contract are recognized over time.

For the years ended December 31, 2021 and 2020 , the Company recognized revenue of $ 0.8  million and $ 1.4 million, respectively, under this contract.

In July 2019, the Company 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 U.S.

Department of Defense ("DoD") to 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 $ 26 million.

The period of performance for this contract, as modified, terminates on April 30, 2024.

As of December 31, 2021 , the PEP Label Expansion R&D Contract provided for future aggregate research and development funding under the award, as modified, of up to $ 23.3 million. For the years ended December 31, 2021 and 2020 , the Company, under the PEP Label Expansion R&D Contract, recognized revenue of $ 2.5 million and $ 0.3 million, respectively, on an over time basis.

In July 2019, the Company 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 DoD to support work in pursuit of a potential label expansion for oral TPOXX®

The period of performance for this contract, as modified, terminates on January 31, 2025.

As of December 31, 2022 , remaining revenue to be recognized in the future under the PEP Label Expansion R&D Contract is up to $ 6.4  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 years ended December 31, 2022 and 2021 , the Company, under the PEP Label Expansion R&D Contract, recognized revenue of $ 17.9 million and $ 2.5  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.

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$ 19,510,379  

For the year ended December 31, 2021, cost of goods sold included a net inventory-related loss of $ 0.6  million.

This loss related to a $ 0.9 million inventory write-down, partially offset by credits received from contract manufacturing organizations ("CMOs") in connection with the inventory write-down.

Property, Plant and Equipment

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2,811,700  

Research and development vendor costs

1,551,920  

256,397  

Professional fees

1,276,513  

1,426,163  

Professional fees

536,997  

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466,830  

379,720  

405,176  

Research and development vendor costs

256,397  

327,606  

Accrued expenses and other current liabilities

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Year Ended December 31,

Net income (loss) for basic earnings per share

Net income for basic earnings per share

$ 33,904,806  

$ 69,450,766  

$ ( 7,241,147 )

$ 56,342,010  

Change in fair value of warrants

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117,770  

Net income (loss), adjusted for change in fair value of warrants for diluted earnings per share

Net income, adjusted for change in fair value of warrants for diluted earnings per share

$ 33,504,143  

$ 69,332,996  

$ ( 12,332,403 )

$ 56,342,010  

Weighted-average shares

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79,437,306  

Earnings (loss) per share:

Earnings per share:

$ 0.46  

$ 0.92  

Earnings (loss) per share:

$ 0.71  

Earnings per share:

$ 0.46  

For the year ended December 31, 2021, the diluted earnings per share calculation reflects the effect of the assumed 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 and warrants, unvested restricted stock and unreleased RSUs.

The dilutive effect of warrants and options is calculated based on the average share price for each fiscal period using the treasury stock method.

$ 0.91  

$ 0.71  

For the years ended December 31, 2022 and December 31, 2021, the diluted earnings per share calculation reflects the effect of the exercise or assumed 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 year ended December 31, 2021 because the net effect of their inclusion, including the elimination of the impact in the operating results of the change in fair value of the warrants, would have been anti-dilutive.

For the year ended December 31, 2021, the weighted average number of shares under the cash-settled RSUs excluded from the calculation of diluted earnings per share was 

Cash-settled RSUs were presumed to be cash-settled and therefore excluded from the diluted earnings per share calculations for the years ended December 31, 2022 and December 31, 2021 

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 year ended December 31, 2022 and December 31, 2021, the weighted average number of shares under the cash-settled RSUs excluded from the calculation of diluted earnings per share was 

17,388 , and 29,873 , respectively. 

For the year ended December 31, 2020, diluted shares outstanding include the dilutive effect of in-the-money options, unvested restricted stock and unreleased RSUs.

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For the year ended December 31, 2020, the weighted average number of shares under the warrant excluded from the calculation of diluted earnings per share was 1,124,585 .

The Company incurred losses for the year ended December 31, 2019 

and as a result, for such year the equity instruments listed below were excluded from the calculation of diluted earnings (loss) per share as the effect of the exercise, conversion or vesting of such instruments would have been anti-dilutive.

The weighted average number of equity instruments excluded consisted of:

Year Ended December 31,

Stock Options

340,284  

Stock-Settled Stock Appreciation Rights

Restricted Stock Units

525,741  

Financial Instruments

On September 2, 2016, in connection with the entry into the Loan Agreement (see Note 7  for additional information), the Company issued a warrant (the “Warrant”) to the Lender 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 completed on November 16, 2016.

The subscription price paid was $ 1.50 in connection with the Rights Offering;

The per share subscription price paid was $ 1.50 in connection with the Rights Offering;

accordingly, the exercise price of the Warrant was set at $ 1.50 per share, and there were 2.7 million shares underlying the Warrant.

During the year ended December 31, 2021 , no shares on the warrant were exercised.

During the year ended December 31, 2020, 0.5  million shares on the warrant were exercised.

Subsequent to partial exercises of the Warrant, there are approximately 1.0  million shares underlying the Warrant as of December 31, 2021 .

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 Company accounted for the Warrant in accordance with the authoritative guidance which requires that free-standing derivative financial instruments with certain anti-dilution and cash settlement features be classified as assets or liabilities at the time of the transaction, and recorded at their fair value.

Any changes in the fair value of the derivative instruments are reported in earnings or loss as long as the derivative contracts are classified as assets or liabilities.

Accordingly, the Company classified the Warrant as a liability and reports its change in fair value in the consolidated statement of operations.

On September 2, 2016, the issuance date 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 Warrant and compared the Monte Carlo simulation model calculation to a Black-Scholes model calculation as of December 31, 2016.

These models generated substantially equivalent fair values for the Warrant.

As such, the Company utilized a Black-Scholes model at December 31, 2021 and 2020 to determine the fair value of the Warrant.

As of December 31, 2021 , the fair value of the Warrant was $ 6.5  million.

A Black Scholes model was applied to calculate the fair value of the Warrant using the following assumptions:

risk free interest rate of 1.21 %;

no dividend yield;

an expected life of 4.7  years;

and a volatility factor of 55 %.

As of December 31, 2020 , the fair value of the Warrant was $ 6.6  million.

Subsequent to partial exercises of the Warrant, there were approximately 1.0  million shares underlying the Warrant as of December 31, 2021.

During the year ended December 31, 2022 , the remainder of the warrant was fully exercised. 

During 2022, the Warrant was fully exercised, and therefore there are no remaining underlying shares as of December 31, 2022 .

For the year ended December 31, 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 decrease in our stock price prior to the exercise of the Warrant.

As of December 31, 2021 , there were approximately 1.0 million shares underlying the outstanding Warrant and the fair value of the Warrant was $ 6.5  million.

A Black Scholes model was applied to calculate the fair value of the Warrant using the following assumptions:

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and a volatility factor of 55 %.

At December 31, 2021 , pursuant to the Warrant agreement, there were no conditions under which current assets would have been required to satisfy the Warrant obligation.

Stockholders’

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As of December 31, 2022 and 2021 , no preferred shares were outstanding or issued.

On March 5, 2020, the Company announced that the Board of Directors authorized a share repurchase program under which the Company may repurchase, from time to time, up to an aggregate of $ 50 million of the Company’s common stock through December 31, 2021.

During the year ended December 31, 2021, the Company repurchased 3.2  million shares of common stock for approximately $ 21.5 million under this program.

This program has been fulfilled with the maximum amount being used to repurchase shares.

On August 2, 2021, the Company's Board of Directors authorized an additional 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.

On 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 Exchange Act or otherwise.

 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;

and other corporate liquidity requirements and priorities.

During the year ended 

December 31, 2021 , 

0.6 million shares of common stock have been repurchased under the New Repurchase Authorization for approximately $ 4.5 million.

timing of procurement orders 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 year ended 

December 31, 2022 , the Company repurchased 

1.8 million shares of common stock under the New Repurchase Authorization for approximately $ 13.0 million.

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.

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.

Stock Compensation Plans

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may not be exercisable more than ten years after the date of grant as the maximum term of equity awards issued under the 2010 Plan is ten years.

For the years ended December 31, 2021, 2020 and 2019 , the Company recorded stock-based compensation expense, including stock options and RSUs, of approximately $ 1.3  million, $ 1.4  million and $ 2.1 million, respectively.

For the years ended December 31, 2022, 2021 and 2020 , the Company recorded stock-based compensation expense, including stock options and RSUs, of approximately $ 1.8  million, $ 1.3  million and $ 1.4  million, respectively.

Stock Options

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expected lives.

The expected dividend yield assumption is based on the Company’s intent not to issue a dividend in the foreseeable future.

The expected dividend yield assumption reflects that the Company does not have a recurring dividend program.

The risk-free interest rate assumption is based upon observed interest rates for securities with maturities approximating the options’

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Remaining Life

(in thousands)

Outstanding at January 1, 2022 (1)

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Canceled/Expired

( 153,000 )  

Outstanding at December 31, 2022

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$ 289,359  

( 1 )  Balances as of January 1, 2022 differ from those as of December 31, 2021 presented in the Company's 

2021 Form 10 -K due to the special dividend paid during 2022.

In connection with the dividend, the number of options and the weighted average exercise price were adjusted pursuant to the terms of the Company's 2010 Plan.

As of December 31, 2022 , there is no remaining unrecognized stock-based compensation cost related to stock options expected to be recognized.

The total fair value of stock options which vested during the years ended December 31, 2022 and 2021 was approximately $ 375,000  and $ 258,000 , respectively.

There were no stock options exercised during the year ended December 31, 2021.

The total intrinsic value of stock options exercised was approximately $ 87,000 and $ 76,000  for the years ended December 31, 2020 and December 31, 2019, respectively.

There were no stock options exercised during the years ended December 31, 2022 and December 31, 2021.

The total intrinsic value of stock options exercised was approximately $ 87,000 for the year ended December 31, 2020.

The intrinsic value represents the amount by which the market price of the underlying stock exceeds the exercise price of an option.

Restricted Stock Awards/Restricted Stock Units

RSUs awarded to employees vest in equal annual installments over a two or three -year period and RSUs awarded to directors of the Company vest over a one -year period.

Restricted Stock Units

RSUs awarded to employees vest on schedules of between one year and three years, and RSUs awarded to directors of the Company vest over a one -year period.

A summary of the Company’s RSU activity is as follows:

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Canceled/Expired

( 36,578 )  

Outstanding at December 31, 2022 (3)

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$ 8.56  

( 1 )  includes 54,792 awards which are expected to be settled in cash.

includes 54,792 awards which were settled in cash in June 2022.

includes 35,088 awards which were expected to be settled in cash.

( 3 ) includes 30,702 awards which are expected to be settled in cash.

As of December 31, 2022 , $ 1.2  million of total remaining unrecognized stock-based compensation cost related to RSUs is expected to be recognized over the weighted-average remaining requisite service period of 0.7  years.

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$ 19,211,782  

$ ( 663,114 )

$ 5,111,667  

State and local

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13,994  

Total current provision (benefit)

Total current provision

14,055,704  

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( 3,818,283 )  

( 2,092,585 )

89,947  

11,375,962  

State and local

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31,499  

Total deferred provision (benefit)

230,987  

Total deferred (benefit) provision

( 3,827,778 )  

( 2,417,617 )

Total provision (benefit)

121,446  

11,606,949  

$ ( 2,937,276 )

Total provision

$ 10,227,926  

$ 19,860,975  

$ 17,166,581  

The Company’s deferred tax assets and liabilities comprise the following:

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Deferred income tax assets:

Net operating losses

State net operating losses

$ 1,247,826  

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702,617  

Capitalized R&D

4,194,106  

Lease liability

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$ 2,422,607  

( 1 )  Certain prior year amounts were reclassed to conform with current year presentation.

The recognition of a valuation allowance for deferred taxes requires management to make estimates and judgments about the Company’s future profitability which is inherently uncertain.

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The Company's valuation allowance did not change materially from prior years. 

Effective beginning in fiscal 2022, the U.S.

Tax Cuts and Job Act of 2017 ("TCJA") requires the Company to deduct U.S.

and international research and development expenditures for tax purposes over 5 to 15 years, instead of in the current fiscal year.

The Company concurrently records a deferred tax benefit for the future amortization of the research and development ("R&D") for tax purposes.

The requirement to expense R&D as incurred is unchanged for U.S.

GAAP purposes and the impact to pre-tax R&D expense is not affected by this provision.

The benefit for income taxes differs from the expected amount calculated by applying the Company's statutory rate to the income or loss before benefit for income taxes as follows:

5 unchanged sentences

Change in fair value of common stock warrant

( 0.2 )%  

Section 162(m) limitation

2 unchanged sentences

22.2 %  

For the year ended December 31, 2021 , the Company’s effective tax rate differs from the statutory rate of 21 % primarily as a result of non-deductible executive compensation under IRC Section 162 (m) and state and local taxes.

For the year ended December 31, 2020 , the Company's effective tax rate differs from the statutory rate of 21 % primarily as a result of non-deductible executive compensation under IRC Section 162 (m), a non-taxable adjustment for the fair market value of the Warrant, and state and local taxes.

For the years ended December 31, 2022 and 2021 , the Company’s effective tax rate differs from the statutory rate of 21 % primarily as a result of certain permanent differences including non-deductible executive compensation under IRC Section 162 (m) and state and local taxes.

For the year ended December 31, 2020 , the Company's effective tax rate differs from the statutory rate of 21 % primarily as a result of non-deductible executive compensation under IRC Section 162 (m), a non-taxable adjustment for the fair market value of the Warrant, and state and local taxes.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows:

8 unchanged sentences

Lapses in applicable statutes of limitation

( 430,247 )  

Balance at the end of the year

3 unchanged sentences

Included in the balance of unrecognized tax benefits as of December 31, 2022 , are potential benefits of $ 5.1  million that, if recognized, would affect the effective tax rate.

The total amount accrued for interest and penalties as of 

December 31, 2022 and 

December 31, 2021 , was $ 72,000 and $ 95,000 , respectively.

For the years ended 

December 31, 2021 and December 31, 2020 , interest and penalties on unrecognized tax benefits were $ 95,000 and $ 65,000 , respectively.

December 31, 2022 and 

December 31, 2021 , the Company recorded an income tax benefit of $ 23,000 and an income tax expense of $ 30,000 , respectively, related to the accrual of interest and penalties.

There are no uncertain tax positions for which it is reasonably possible that the total amounts of unrecognized benefits will significantly increase or decrease within twelve months from December 31, 2022 .

2 unchanged sentences

The Company's state and local tax years that are open to tax examination are generally 2018 to 2022 .

Revenues by Geographic Region

Revenues by geographic region were as follows:

For the year ended December 31,

United States

$ 39,803,888  

$ 120,656,294  

$ 122,416,481  

International

14,853,233  

38,875,657  

13,014,160  

2,542,823  

Europe, Middle East and Africa (EMEA)

16,270,033  

972,799  

Total International

70,971,722  

13,014,160  

2,542,823  

Total revenues

$ 110,775,610  

$ 133,670,454  

$ 124,959,304  

Commitments and Contingencies

10 unchanged sentences

The Company has no leases that qualify as finance leases.

Operating lease costs totaled $ 0.6  million and $ 0.7  million for the years ended December 31, 2021 and 2020 , respectively.

Cash paid for amounts included in the measurement of lease liabilities from operating cash flows was $ 0.6 million and $ 0.6 million for the years ended December 31, 2021 and 2020 , respectively.

Operating lease costs totaled $ 0.6  million for each of the years ended December 31, 2022 and 2021 .

Cash paid for amounts included in the measurement of lease liabilities from operating cash flows was $ 0.6 million for each of the years ended December 31, 2022 and 2021 .

As of December 31, 2022 , the weighted-average remaining lease term of the Company’s operating leases was 3.7  years while the weighted-average discount rate was 4.53 %.

5 unchanged sentences

165,916  

Total undiscounted cash flows under operating leases

15 unchanged sentences

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 partner at a law firm used by the Company.

During the years ended December 31, 2021, 2020 and 2019 , the Company incurred expenses of approximately $ 0.1  million, $ 0.5  million and $ 0.5  million respectively, related to services provided by the 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 partner at a law firm previously used by the Company.

The Company did not incur any expenses related to services provided by the outside counsel during the year ended December 31, 2022 .

During the years ended December 31, 2021 and 2020 , the Company incurred expenses of approximately $ 0.1  million and $ 0.5  million, respectively, related to services provided by the outside counsel.

The Company had no outstanding payables or accrued expenses related to services performed by the outside counsel as of December 31, 2022 .

6 unchanged sentences

The facility fee was $ 3,333 per month for the second year of the term and increases by five percent each year thereafter, to $ 4,925 per month in the final year of the term.

During the year ended December 31, 2021, the Company paid $ 0.3 million of expenses associated with this lease.

During the year ended December 31, 2022 , the Company paid $ 0.4  million of expenses associated with this lease.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data