What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-03-12 compared with 2023-03-02 · 341 added, 595 removed, 426 unchanged (69% of the section changed)

1 unchanged sentence

Index to the Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )

Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Income

Consolidated Statements of Changes in Stockholders’

Consolidated Statements of Changes in Stockholders’ Equity

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, 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”).

and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, 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, 2023, 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, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

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Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition –

Estimated Costs to Complete the Research and Development Services ( “

) 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, 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.

Under this method, progress is measured based on the cost of resources consumed compared to the total estimated costs to completely satisfy the performance obligation.

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.     

Revenue Recognition

As described in Note 2 to the consolidated financial statements, the Company’s revenue was $139.9 million for the year ended December 31, 2023.

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

As disclosed by management, revenue connected with performance obligations related to product delivery and supportive services are recognized at a point in time.

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.

Management recognizes revenue related to these services based on the progress toward complete satisfaction of the performance obligation and measures this progress under an input method, which is based on the Company’s cost incurred relative to total estimated costs.

The principal consideration for our determination that performing procedures relating to revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition.

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;

(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.   

These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the recording of revenue at the transaction price once the performance obligations are satisfied.

These procedures also included, among others (i) testing the completeness, accuracy and occurrence of product sales and supportive services revenue recognized for a sample of revenue transactions by obtaining and inspecting source documents, such as contracts, invoices, shipping and delivery documents and subsequent cash receipts;

(ii) for research and development revenue, testing management’s process for determining the estimated costs to completely satisfy each performance obligation for a sample of contracts by (a) comparing the underlying cost estimates to approved contracts or modifications;

(b) comparing the underlying transaction price to original contracts or modifications;

and (c) testing actual costs incurred and their eligibility for billing under the respective contracts;

and (iii) confirming a sample of outstanding customer invoice balances as of December 31, 2023.

/s/ PricewaterhouseCoopers LLP

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March 12, 2024

We have served as the Company’s auditor since 1997.

SIGA TECHNOLOGIES, INC.

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Cash and cash equivalents

$ 98,790,622  

$ 103,138,819  

$ 150,145,844 $ 98,790,622

Accounts receivable

45,406,960  

83,650,450  

39,273,090  

19,510,379  

21,130,951 45,406,960

64,218,337 39,273,090

Prepaid expenses and other current assets

2,315,672  

2,453,444  

3,496,028 2,315,672

Total current assets

185,786,344  

208,753,092  

238,991,160 185,786,344

Property, plant and equipment, net

1,848,314  

2,365,957  

1,331,708 1,848,314

Deferred tax asset, net

6,250,385  

2,422,607  

898,334  

252,546  

286,585  

$ 195,035,923  

$ 214,726,575  

11,048,118 6,250,385

898,334 898,334

2,083,535 252,546

$ 254,352,855 $ 195,035,923

LIABILITIES AND STOCKHOLDERS' EQUITY

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Accounts payable

$ 3,355,268  

$ 2,028,004  

$ 1,456,316 $ 3,355,268

Accrued expenses and other current liabilities

16,852,781  

9,252,812  

10,181,810 6,304,061

Deferred IV TPOXX® revenue

20,788,720 10,548,720

Income tax payable

1,309,672  

19,207,042  

21,690,899 1,309,672

Total current liabilities

21,517,721  

30,487,858  

Warrant liability

6,521,441  

54,117,745 21,517,721

Other liabilities

3,358,160  

3,402,869  

3,376,203 3,358,160

Total liabilities

24,875,881  

40,412,168  

57,493,948 24,875,881

Commitments and contingencies (Note 12)

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Additional paid-in capital

233,957,767  

226,070,308  

235,795,420 233,957,767

Accumulated deficit

( 63,804,993 )  

( 38,943,622 ) ( 63,804,993 )

Total stockholders' equity

170,160,042  

174,314,407  

196,858,907 170,160,042

Total liabilities and stockholders' equity

$ 195,035,923  

$ 214,726,575  

$ 254,352,855 $ 195,035,923

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

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Operating income

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

Loss on extinguishment of Term Loan

Interest expense

Gain from change in fair value of warrant liability

Other income, net

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SIGA TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Years Ended December 31, 2023, 2022 and 2021

Comprehensive

Stockholders’

Income (Loss)

Balances, December 31, 2020

81,269,868  

$ 8,127  

$ 220,808,037  

$ ( 123,032,408 )  

$ 97,783,756  

56,342,010  

77,195,704 $ 7,720 $ 224,978,430 $ ( 95,192,881 ) $ — $ 129,793,269

69,450,766 69,450,766

Repurchase of common stock

( 4,628,473 )  

( 463 )  

( 28,502,483 )  

( 3,787,683 ) ( 379 ) ( 26,021,140 ) ( 26,021,519 )

Issuance of common stock upon exercise of stock options

11,822  

Issuance of common stock upon vesting of RSUs

177,876  

( 18 )  

Issuance of common stock upon exercise of warrants

393,646  

3,003,477  

3,003,517  

162,876 16 ( 16 ) —

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

( 29,035 )  

( 184,013 )  

( 27,295 ) ( 3 ) ( 173,915 ) ( 173,918 )

Stock-based compensation

1,350,948  

1,265,809 1,265,809

Balances, December 31, 2021

77,195,704  

$ 7,720  

$ 224,978,430  

$ ( 95,192,881 )  

$ 129,793,269  

69,450,766  

73,543,602 $ 7,354 $ 226,070,308 $ ( 51,763,255 ) $ — $ 174,314,407

33,904,806 33,904,806

Repurchase of common stock

( 3,787,683 )  

( 379 )  

( 26,021,140 )  

( 1,823,738 ) ( 182 ) ( 13,006,149 ) ( 13,006,331 )

Issuance of common stock upon vesting of RSUs

162,876  

( 16 )  

132,396 13 ( 13 ) —

Issuance of common stock upon exercise of warrants

824,903 83 6,120,695 6,120,778

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

( 27,295 )  

( 173,915 )  

( 1,973 ) ( 12,533 ) ( 12,533 )

Cash dividend ($ 0.45 per share)

( 32,940,395 ) ( 32,940,395 )

Stock-based compensation

1,265,809  

1,779,310 1,779,310

Balances, December 31, 2022

73,543,602  

$ 7,354  

$ 226,070,308  

$ ( 51,763,255 )  

$ 174,314,407  

33,904,806  

Repurchase of common stock

( 1,823,738 )  

( 182 )  

( 13,006,149 )  

72,675,190 $ 7,268 $ 233,957,767 $ ( 63,804,993 ) $ — $ 170,160,042

68,068,826 68,068,826

Issuance of common stock upon exercise of stock options

Repurchase of common stock (including excise tax)

( 1,736,822 ) ( 174 ) ( 11,072,337 ) ( 11,072,511 )

Issuance of common stock upon vesting of RSUs

132,396  

( 13 )  

Issuance of common stock upon exercise of warrants

824,903  

6,120,695  

6,120,778  

144,576 15 ( 15 ) —

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

( 1,973 )  

( 12,533 )  

( 214,794 ) ( 214,794 )

Cash dividend ($ 0.45 per share)

( 32,940,395 )  

( 32,135,118 ) ( 32,135,118 )

Stock-based compensation

1,779,310  

2,052,462 2,052,462

Balances, December 31, 2023

72,675,190  

$ 7,268  

$ 233,957,767  

$ ( 63,804,993 )  

$ 170,160,042  

71,091,616 $ 7,109 $ 235,795,420 $ ( 38,943,622 ) $ — $ 196,858,907

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

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Depreciation and other amortization

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

Gain on change in fair value of warrant liability

Stock-based compensation

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Deferred income taxes (benefit) provision

Loss on extinguishment of Term Loan

Non-cash interest expense

Changes in assets and liabilities:

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Income tax payable

Deferred revenue

Deferred IV TPOXX® revenue

Net cash provided by operating activities

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Repurchase of common stock

Repayment of Term Loan

Payment of dividend

Cash used in financing activities

( 114,600,421

Net decrease in cash and cash equivalents

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

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of period

Cash and cash equivalents at end of period

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SIGA Technologies, Inc.

(“SIGA”

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.

(“SIGA” 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®

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

TPOXX® 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 U.S.

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.

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 

under the brand name TPOXX®.

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

Summary of Significant Accounting Policies

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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.

Reclassifications

Certain reclassifications have been made to prior year amounts to conform to the current year's presentation.

Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

Restricted Cash and Cash Equivalents

Cash and cash equivalents held in restricted accounts were available to pay interest, fees and principal related to the Term Loan (see Note 7  for additional information).

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, 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:

As of December 31,

Cash and cash equivalents

$ 65,249,072  

Restricted cash - short-term

95,737,862  

Restricted cash - long-term

Cash, cash equivalents and restricted cash

$ 160,986,934  

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. 

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, 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, 2023 and 2022 , 53 % and 16 %, respectively, of accounts receivable represent receivables from the U.S.

At December 31, 2023 , 47 % of accounts receivable represent receivables from international sales, which include sales to four European governments and a government in the Asia Pacific region.

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, 2023 and 2022 , the Company had no allowance for doubtful accounts.

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The cost is determined using the first -in, first -out (FIFO) method.

The Company capitalizes inventory costs associated with the Company’s products when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized;

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.

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 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.

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Property, plant and equipment are stated at cost, net of accumulated depreciation.

Depreciation and amortization are provided on a straight-line method over the estimated useful lives of the various asset classes.

Depreciation and amortization are provided on a straight-line method over the estimated useful lives of the various asset classes.

The estimated useful lives are as follows:

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Warrant Liability

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.

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.

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

The following table presents changes in the liability-classified warrant:

Fair Value of liability-classified warrant

Warrant liability at December 31, 2021

Decrease in fair value of warrant liability

Exercise of warrants

( 6,120,778 )

Warrant liability at December 31, 2022

Revenue Recognition

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

Performance Obligations . A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606.

 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:

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

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

Performance Obligations .

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606.

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, 2023 , 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;

and five relate to manufacture and delivery of product.

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

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In most instances, contract modifications are for services that are not distinct, and, therefore, are accounted for as part of the existing contract.

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.

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.

Under this method, progress is measured based on the cost of resources consumed (i.e., cost of third -party services performed, cost of direct labor hours incurred, and cost of materials consumed) compared to the total estimated costs to completely satisfy the performance obligation.

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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.

Contract estimates are based on various assumptions to project the outcome of future events that often span multiple years. These assumptions include:

Contract Estimates .

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

Contract estimates are based on various assumptions to project the outcome of future events that often span multiple years.

These assumptions include:

labor productivity;

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and the performance of subcontractors, among other variables.

The nature of the work required to be performed on many of the Company’s performance obligations and the estimation of total revenue and cost at completion are complex, subject to many variables and require significant judgment.

The nature of the work required to be performed on many of the Company’s performance obligations and the estimation of total revenue and cost at completion may be complex, subject to many variables and require significant judgment.

The consideration associated with research and development services is variable as the total amount of services to be performed has not been finalized.

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The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur and when any uncertainty associated with variable consideration is resolved.

The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our historical and anticipated performance, external factors, trends and all other information (historical, current and forecasted) that is reasonably available to us.

A significant change in one or more of these estimates could affect the profitability of the Company’s contracts. As such, the Company reviews and updates its contract-related estimates regularly.

A significant change in one or more of these estimates could affect the profitability of the Company’s contracts.

As such, the Company reviews and updates its contract-related estimates regularly.

The Company recognizes adjustments in estimated revenues, research and development expenses and cost of sales and supportive services under the cumulative catch-up method.

Under this method, the impact of the adjustment on revenues, research and development expenses and cost of sales and supportive services recorded to date on a contract is recognized in the period the adjustment is identified.

Contract Balances . The timing of revenue recognition, billings and cash collections may result in billed accounts receivable, unbilled receivables (contract assets) and customer advances and deposits (contract liabilities) in the consolidated balance sheets.

Contract Balances .

The timing of revenue recognition, billings and cash collections may result in billed accounts receivable, unbilled receivables (contract assets) and customer advances and deposits (contract liabilities) in the consolidated balance sheets.

Generally, amounts are billed as work progresses in accordance with agreed-upon contractual terms either at periodic intervals (monthly) or upon achievement of contractual milestones;

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

For the Company’s cost-type arrangements, the customer generally pays the Company for its actual costs incurred, as well as its allocated overhead and G&A costs.

Such payments occur within a short period of time from billing.

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As of December 31, 2023 , the aggregate amount of transaction price allocated to remaining performance obligations was $ 92.1 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 is often outside the Company’s control.

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

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” ).

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

Leases with an initial term less than one year are not recorded on the balance sheet and the lease costs are recorded as an expense on a straight-line basis over the lease term.

Leases with an initial term less than one year are not recorded on the balance sheet and the lease costs are recorded as an expense on a straight-line basis over the lease term.

Operating leases with terms greater than one year result in a lease liability recorded in other liabilities with a corresponding right-of-use ("ROU") asset recorded in property, plant and equipment.

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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 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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Stock-based compensation expense for all share-based payment awards made to employees and directors is determined on the grant date;

for option awards, fair value was estimated using the Black-Scholes model.

for option awards, fair value was estimated using the Black-Scholes model.

These compensation costs are recognized net of an estimated forfeiture rate over the requisite service periods of the awards.

Forfeitures are estimated on the date of the respective grant and revised if actual or expected forfeiture activity differs from original estimates.

The fair value of cash-settled restricted stock unit ("RSU") awards is determined by the value of our common stock and is recognized based on the portion of the requisite service period satisfied as of each valuation date.

The fair value of cash-settled restricted stock unit ("RSU") awards is determined by the value of our common stock and is recognized based on the portion of the requisite service period satisfied as of each valuation date.

The fair valuation of the cash-settled awards changes based on changes in our common stock price.

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A valuation allowance is established if it is more likely than not that some or the entire deferred tax asset will not be realized.

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

The Company may recognize tax benefits from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position.

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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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The excess of the purchase price above par value of repurchased shares that are retired is presented as an increase to accumulated deficit (or a reduction of retained earnings, if any).

Earnings (Loss) per Share

Basic earnings per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period.

Earnings (Loss) per Share

Basic earnings per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period.

Diluted earnings per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period, assuming potentially dilutive common shares from option exercises, RSUs, warrants and other incentives had been issued and any proceeds received in respect thereof were used to repurchase common stock at the average market price during the period.

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Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and other current liabilities approximates fair value due to the relatively short maturity of these instruments.

Common stock warrants which are classified as liabilities are recorded at their fair market value as of each reporting period.

The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and other current liabilities approximates fair value due to the relatively short maturity of these instruments.

The measurement of fair value requires the use of techniques based on observable and unobservable inputs.

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The inputs create the following fair value hierarchy:

Level 1 –

Quoted prices for identical instruments in active markets.

Level 2 –

Quoted prices for similar instruments in active markets;

Level 1 – Quoted prices for identical instruments in active markets.

Level 2 – Quoted prices for similar instruments in active markets;

quoted prices for identical or similar instruments in markets that are not active;

and model-derived valuations where inputs are observable or where significant value drivers are observable.

Level 3 –

Instruments where significant value drivers are unobservable to third parties.

The Company uses model-derived valuations where certain inputs are unobservable to third parties to determine the fair value of common stock warrants on a recurring basis and classifies the liability-classified warrant as Level 3.

Level 3 – Instruments where significant value drivers are unobservable to third parties.

There were no transfers between levels of the fair value hierarchy during 2023 or 2022 .

As of December 31, 2022  and 

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:

Fair Value Measurements of Level 3 liability-classified warrant

Warrant liability at December 31, 2021

$ 6,521,441  

Decrease in fair value of warrant liability

Exercise of warrants

( 6,120,778 )

Warrant liability at December 31, 2022

As of December 31, 2023 and December 31, 2022 , the Company had approximately $ 95.1 million and less than $ 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, 2023 .

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

There were no Level 3 financial instruments as of December 31, 2023 or December 31, 2022 .

For the years ended December 31, 2023, 2022 and 2021 , interest income of $ 4.2 million, $ 1.0 million and $ 0.1 million, respectively, was included in Other income, net on the Consolidated Statements of Operations and Comprehensive Income.

Loss Contingencies

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Recent Accounting Pronouncements

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

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No.

2023 - 07, Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.

Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker (CODM).

The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments.

The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements.

We expect this ASU to only impact our disclosures with no impacts to our results of operations, cash flows and financial condition.

In December 2023, the FASB issued ASU 2023 - 09, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures.

ASU 2023 - 09 is effective for fiscal years beginning after December 15, 2024, may be applied prospectively or retrospectively, and allows for early adoption.

These requirements are not expected to have an impact on our financial statements, but will impact our income tax disclosures.

Procurement Contracts and Research Agreements

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On September 10, 2018, the Company entered into a contract with the U.S.

Biomedical Advanced Research and Development Authority ("BARDA") pursuant to which SIGA agreed to deliver up to 

1,488,000 courses of oral TPOXX®

to the 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, 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.

Biomedical Advanced Research and Development Authority ("BARDA") pursuant to which SIGA agreed to deliver up to 1,488,000 courses of oral TPOXX® to the 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®.

In October 2023, the contract was modified so that a course of IV TPOXX® was redefined within the contract from being 14 vials to being 28 vials;

as such, the 19C BARDA Contract currently specifies 106,000 courses of IV TPOXX® (for the same payment amount as originally specified).

In addition to the delivery of TPOXX® courses, 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, 2023 , 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, approximately $ 407.1 million of payments are related to exercised options, and up to approximately $ 143.7 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.

The period of performance for options is up to ten years from the date of entry into the 19C BARDA Contract and such options could be exercised at any time during the contract term, including during the base period of performance. 

The period of performance for options is up to ten years from the date of entry into the 19C BARDA Contract and such options could be exercised at any time during the contract term.

The base period of performance specifies potential payments of approximately $ 51.7 million for the following activities:

payments of approximately $ 11.1 million for the delivery of approximately 

35,700 courses of oral TPOXX®

to the Strategic Stockpile;

payments of $ 8.0 million for the manufacture of 

20,000  courses of final drug product of IV TPOXX®

("IV FDP"), of which $ 3.2 million of payments are related to the manufacture of bulk drug substance ("IV BDS") to be used in the manufacture of IV FDP;

payments of approximately $ 11.1 million for the delivery of approximately 35,700 courses of oral TPOXX® to the Strategic Stockpile;

payments of $ 8.0 million for the manufacture of 10,000 courses (as currently defined within the contract as being 28 vials) of final drug product of IV TPOXX® ("IV FDP"), of which $ 3.2 million of payments are related to the manufacture of bulk drug substance ("IV BDS") to be used in the manufacture of IV FDP;

payments of approximately $ 32.0 million to fund reimbursed activities;

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

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, $ 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.

As of December 31, 2023 , 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, $ 4.3 million for the delivery of IV FDP to the Strategic Stockpile and $ 22.1 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 $ 407.1 million.

There are exercised options for the following activities:

payments up to $ 11.2 million for the procurement of raw materials used in the 2020 manufacture of certain courses of oral TPOXX®; payments up to $ 213.9 million for the delivery of up to 

726,140 courses of oral TPOXX®;

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, 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).

payments up to $ 337.7 million for the manufacture and delivery of up to 1.1 million courses of oral TPOXX®;

payments up to $ 51.2 million for the manufacture of courses of IV FDP, of which $ 20.4 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, 2023 , the Company has cumulatively delivered $ 323.0 million of oral TPOXX® to the Strategic Stockpile, of which $ 97.9 million was delivered in the fourth quarter of 2023;

has cumulatively received $ 20.5 million for the completed manufacture of IV BDS, of which $ 20.5 million has been recorded as deferred revenue as of December 31, 2023 ;

and has been cumulatively reimbursed $ 7.9 million in connection with post-marketing activities for oral and IV TPOXX®.

In the first two months of 2024 ended February 29, 2024, approximately $ 15 million of oral TPOXX® was delivered to the Strategic Stockpile.

Unexercised options specify potential payments up to approximately $ 143.7 million in total (if all such options are exercised), of which approximately $ 5.6 million relates to supportive activities that we currently do not expect to be required.

There are options for the following activities:

payments of up to $ 225.1 million for the delivery of oral TPOXX®

to the Strategic Stockpile;

payments of up to $ 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.

The options related to IV TPOXX®

are divided into two primary manufacturing steps.

There are options related to the manufacture of bulk drug substance (“IV BDS Options”), and there are corresponding options (for the same number of IV courses) for the manufacture of final drug product (“IV FDP Options”).

payments of up to $ 112.5 million for the delivery of oral TPOXX® to the Strategic Stockpile;

and payments of up to $ 25.6 million for the manufacture of courses of IV FDP, of which up to $ 10.2 million of payments would be paid upon the manufacture of IV BDS to be used in the manufacture of IV FDP.

The options related to IV TPOXX® are divided into two primary manufacturing steps.

BARDA may choose to exercise any, all, or none of these options in its sole discretion.

The 19C BARDA Contract includes:

three separate IV BDS Options, each providing for the bulk drug substance equivalent of 

64,000 courses of IV TPOXX®;

and three separate IV FDP Options, each providing for 

64,000 courses of final drug product of IV TPOXX®.

three separate IV BDS Options, each providing for the bulk drug substance equivalent of 32,000 courses (as currently defined within the contract) of IV TPOXX®;

and three separate IV FDP Options, each providing for 32,000 courses of final drug product of IV TPOXX®.

BARDA has the sole discretion as to whether to simultaneously exercise IV BDS Options and IV FDP Options, or whether to exercise options at different points in time (or alternatively, to only exercise the IV BDS Option but not the IV FDP Option).

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.

To date, BARDA has exercised two of the three IV BDS options and two of the three IV FDP options.

If BARDA decides to only exercise the remaining IV BDS Option, then the Company would receive payments up to $ 10.2 million;

alternatively, if BARDA decides to exercise the remaining IV BDS Option and IV FDP Option, then the Company would receive payments up to $ 25.6 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 32,000 courses), BARDA has the option to independently purchase IV BDS or IV FDP.

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Performance obligations related to product delivery generate revenue at a point in time.

Revenue from other performance obligations under the 19C BARDA Contract are recognized over time using an input method using costs incurred to date relative to total estimated costs at completion.

For the 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, 2022 and 2021 , was $ 7.2 million and $ 112.5  million, respectively. 

Revenue from other performance obligations under the 19C BARDA Contract are recognized over time using an input method using costs incurred to date relative to total estimated costs at completion.

For the years ended December 31, 2023 and 2022 , the Company recognized revenues of $ 3.0 million and $ 6.2 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, 2023 and 2022 , was $ 97.9 million and $ 7.2 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 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 an additional approximately $ 3.8 million of oral TPOXX®.

In the second quarter of 2022, the Company delivered oral TPOXX® to the DoD and recognized revenue of $ 3.6 million, 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 in September 2022 and recognized the related revenue.

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®.

The DoD Contract #2 included a firm commitment for the DoD to procure approximately $ 5.1 million of oral TPOXX®, and an option, exercisable at the sole discretion of the DoD for the procurement of an additional approximately $ 5.5 million of oral TPOXX®.

In March 2023, the Company fulfilled the firm commitment by delivering $ 5.1 million of oral TPOXX® to the DoD, and recognized the related revenue.

Additionally, in March 2023 the DoD exercised the $ 5.5 million option in DoD Contract #2 for the procurement of oral TPOXX® and the Company delivered these courses to the DoD in the fourth quarter of 2023 and recognized the related revenue.

In February 2024, DoD Contract #2 was amended and approximately $ 1 million of oral TPOXX® was ordered by the DoD.

International Procurement Contracts

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.

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.

SIGA retains ownership, intellectual property, distribution and supply rights and regulatory responsibilities in connection with TPOXX®, and, in the United States market, also retains sales and marketing rights with respect to oral TPOXX®.

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

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.

In 2023, the Company has delivered, and received acceptance for, approximately $ 21.3 million of oral TPOXX® to five European countries, one Middle Eastern country, and one Asia Pacific country.

In the first two months of 2024 ending February 29, 2024, the Company delivered an additional approximately $ 7 million of oral TPOXX® to six countries in Europe, completing greater than 95 % of deliveries under the $ 18 million of firm commitment orders from 13 countries under the European Commission’s DG HERA (Health Emergency Preparedness and Response Authority) joint procurement mechanism, which was announced by the Company in October 2022.

Additionally, $ 0.7 million of oral TPOXX® was delivered to the Canada Department of National Defence ("CDND") in February 2024.

These deliveries were made in connection with orders and contracts under the International Promotion Agreement (defined and discussed below).

Through the International Promotion Agreement, Meridian Medical Technologies, Inc.

("Meridian") is the counterparty to international contracts under which orders are placed for the purchase of oral TPOXX®.

In addition to the above-mentioned orders and deliveries, the Company has a contract with the CDND under which the CDND has an option until December 31, 2025, exercisable at its sole discretion, for the purchase of up to an additional $ 6.7 million of oral TPOXX®.

As an international contract, this contract is also administered under the International Promotion Agreement.

The contract with the CDND (the "Canadian Military Contract"), issued in April of 2020 and subsequently amended, is option-based and initially specified that the CDND would purchase up to $ 14 million of oral TPOXX® if all options were exercised.

With respect to the $ 77 million of firm commitment orders that were received in 2022, approximately $ 71 million of oral TPOXX® was delivered and recorded as revenue in 2022, and the remainder was delivered and recorded as revenue in 2023.

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.

Under the terms of the International Promotion Agreement, as amended, which has 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.

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 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, 2022 , the Company recognized $ 71.0 million in connection with international orders.

During the year ended 

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

During the year ended December 31, 2023 , the Company recognized $ 21.3 million of sales in connection with international contracts.

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

Research Agreements and Grants

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®

that would include post-exposure prophylaxis ("PEP") of smallpox (such work known as the "PEP Label Expansion Program" and the contract referred to as the "PEP Label Expansion R&D Contract"). In subsequent modifications, the DoD increased the scope and the available funding under the PEP Label Expansion R&D Contract to approximately $ 27  million.

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

As of 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.

In July 2019, the Company was awarded a multi-year research contract ultimately valued at approximately $ 27 million from the 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").

As of December 31, 2023 , the Company invoiced the full amount of available funding.

As of December 31, 2023 , there is no remaining revenue to be recognized in the future under the PEP Label Expansion R&D Contract.

Revenue from the performance obligation under the PEP Label Expansion R&D Contract was 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, 2023 and 2022 , the Company, under the PEP Label Expansion R&D Contract, recognized revenue of $ 6.4 million and $ 17.9 million, respectively, on an over time basis.

Contracts and grants include, among other things, options that may or may not be exercised at the U.S.

Government’s discretion.

Moreover, contracts and grants contain customary terms and conditions including the U.S.

Government’s right to terminate or restructure a contract or grant for convenience at any time.

As such, the Company may not be eligible to receive all available funds.

3 unchanged sentences

Raw materials

$ 6,370,581  

$ 22,047  

Work in-process

27,038,845  

17,453,358  

Finished goods

5,863,664  

2,034,974  

$ 39,273,090  

$ 19,510,379  

Property, Plant and Equipment

3 unchanged sentences

Leasehold improvements

$ 2,420,028  

$ 2,420,028 $ 2,420,028

Computer equipment

449,143  

511,062  

468,937 449,143

Furniture and fixtures

347,045  

377,859  

347,045 347,045

Operating lease right-of-use asset

3,678,647  

6,894,863  

6,987,596  

3,678,647 3,678,647

6,914,657 6,894,863

Less-accumulated depreciation

( 5,046,549 )  

( 5,582,949 ) ( 5,046,549 )

Property, plant and equipment, net

$ 1,848,314  

$ 2,365,957  

Depreciation and amortization expense on property, plant, and equipment was $ 0.5  million for each of the years ended December 31, 2022 , 2021 , and 2020 . 

$ 1,331,708 $ 1,848,314

Depreciation and amortization expense on property, plant, and equipment was $ 0.5 million for each of the years ended December 31, 2023 , 2022 , and 2021 .

Accrued Expenses

2 unchanged sentences

December 31, 2022

Deferred revenue

$ 10,581,146  

$ 3,764,696  

2,378,035  

2,811,700  

Research and development vendor costs

1,551,920  

256,397  

1,276,513  

1,426,163  

Professional fees

536,997  

527,026  

Lease liability, current portion

528,170  

466,830  

Professional fees

Research and development vendor costs

Accrued expenses and other current liabilities

$ 16,852,781  

$ 9,252,812  

On March 13, 2020, the Company voluntarily prepaid the Loan Agreement (as defined below) in an approximate aggregate amount of $ 87.2 million.

The prepayment was made from restricted cash, including $ 80.0 million in respect of outstanding principal of the Term Loan, $ 4.0 million that was payable upon the repayment of the Loan Agreement, approximately $ 1.2 million of accrued interest, and a prepayment premium amount of approximately $ 1.9 million.

The prepayment was made upon the Company and the Lender agreeing to and entering into customary mutual releases reflecting that, subject to such prepayment in accordance with the terms of the Loan Agreement, all of the obligations under the Loan Agreement were released, discharged and satisfied in full.

Upon such prepayment and release, the Loan Agreement was terminated.

For the year ended December 31, 2020, the Company recognized approximately $ 5.0 million of a loss on the extinguishment of the Term Loan related to the remaining unamortized discount and the prepayment premium.

On September 2, 2016, the Company entered into a loan and security agreement (as amended from time to time, the “Loan Agreement”) with OCM Strategic Credit SIGTEC Holdings, LLC (“Lender”), pursuant to which the Company received $ 80.0 million (the "Term Loan") (less fees and other items) on November 16, 2016 having satisfied certain pre-conditions.

The Term Loan had a maturity date on the earliest to occur of (i) the four -year anniversary of the Escrow Release Date, and (ii) the acceleration of certain obligations pursuant to the Loan Agreement.

Per Share Data

2 unchanged sentences

The objective of diluted EPS is consistent with that of basic EPS, except that it also gives effect to all potentially dilutive common shares outstanding during the period.

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

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

Year Ended December 31,

Net income for basic earnings per share

$ 33,904,806  

$ 69,450,766  

$ 56,342,010  

Change in fair value of warrants

400,663  

117,770  

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

$ 33,504,143  

$ 69,332,996  

$ 56,342,010  

Weighted-average shares

72,929,550  

75,322,194  

79,259,000  

Effect of potential common shares

616,951  

1,080,522  

178,306  

Weighted-average shares:

73,546,501  

76,402,716  

79,437,306  

Earnings per share:

$ 0.46  

$ 0.92  

$ 0.71  

Earnings per share:

$ 0.46  

$ 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.

For the years ended December 31, 2023, December 31, 2022 and December 31, 2021, weighted-average diluted shares include the dilutive effect of in-the-money options and stock-settled RSUs.

For the years ended December 31, 2022 and December 31, 2021, the diluted earnings per share calculation also 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.

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 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.

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

Warrants were presumed to be cash-settled and therefore excluded from the diluted earnings per share calculations for the year ended December 31, 2020 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, 2020, the weighted average number of shares under the warrant excluded from the calculation of diluted earnings per share was 1,124,585 .

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 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, 2020, 0.5  million shares on the warrant were exercised.

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:

risk free interest rate of 1.21%;

no dividend yield;

an expected life of 4.7 years;

and a volatility factor of 55 %.

Stockholders’

On December 31, 2022 , the Company’s authorized share capital consisted of 620,000,000 shares, of which 600,000,000 are designated common shares and 20,000,000 are designated preferred shares.

The Company’s Board of Directors is authorized to issue preferred shares in series with rights, privileges and qualifications of each series determined by the Board.

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, 2023, 2022 and 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 years ended December 31, 2023, 2022 and 2021, the weighted average number of shares under the cash-settled RSUs excluded from the calculation of diluted earnings per share was 32,660 , 17,388 , and 29,873 , respectively.

Stockholders’ Equity

On December 31, 2023 , the Company’s authorized share capital consisted of 620,000,000 shares, of which 600,000,000 are designated common shares and 20,000,000 are designated preferred shares.

The Company’s Board of Directors is authorized to issue preferred shares in series with rights, privileges and qualifications of each series determined by the Board.

As of December 31, 2023 and 2022 , no preferred shares were outstanding or issued.

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.

On August 2, 2021, the Company's Board of Directors authorized a share repurchase program ("Repurchase Authorization") under which the Company could repurchase up to $ 50 million of the Company's common stock through December 31, 2023.

The Company started repurchasing shares under this program in the fourth quarter of 2021.

 Repurchases under the New Repurchase Authorization 

may be made from time to time at the Company's discretion in open market transactions, through block trades, in privately negotiated transactions and pursuant to any trading plan that may be adopted by the Company's management in accordance with Rule 10b5 - 1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise.

The timing and actual number of shares repurchased will depend on a variety of factors, including:

timing of 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.

Repurchases under the Repurchase Authorization were made from time to time at the Company's discretion.

The timing and actual number of shares repurchased depended upon a variety of factors, including:

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, 2023 , the Company repurchased 1.7 million shares of common stock under the Repurchase Authorization for approximately $ 11.0 million.

In addition, during the year ended December 31, 2023 , the Company recorded approximately $ 0.1 million of excise tax associated with the repurchase of common stock.

On December 31, 2023, the Repurchase Authorization expired.

On May 4, 2023 , 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 approximately $ 32 million.

The special dividend was paid on June 1, 2023 to shareholders of record at the close of business on May 16, 2023 .

Stock Compensation Plans

The Company’s 2010 Stock Incentive Plan (the “2010 Plan”) was initially adopted in May 2010.

The 2010 Plan provided for the issuance of stock options, restricted stock and unrestricted stock with respect to an aggregate of 2,000,000 shares of the Company’s common stock to employees, consultants and outside directors of the Company.

On May 17, 2011, the 2010 Plan was amended to provide for the issuance of RSUs and on February 2, 2012, the 2010 Plan was amended to provide for the issuance of stock-settled stock appreciation rights ("SSARs").

The Company’s 2010 Stock Incentive Plan (the “2010 Plan”) was initially adopted in May 2010.

On May 17, 2011, the 2010 Plan was amended to provide for the issuance of RSUs and on February 2, 2012, the 2010 Plan was amended to provide for the issuance of stock-settled stock appreciation rights ("SSARs").

Effective April 25, 2012 and May 23, 2017, the 2010 Plan was amended to increase the maximum number of shares of common stock available for issuance to an aggregate of 4,500,000 shares and 8,500,000 shares, respectively.

The vesting period for awards granted under the 2010 Plan is determined by the Compensation Committee of the Board of Directors.

The Compensation Committee also determines the expiration date of each equity award; however, stock options 

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, 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.

The vesting period for awards granted under the 2010 Plan is determined by the Compensation Committee of the Board of Directors.

The Compensation Committee also determines the expiration date of each equity award;

however, stock options 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, 2023, 2022 and 2021 , the Company recorded stock-based compensation expense, including stock options and RSUs, of approximately $ 2.1 million, $ 1.8 million and $ 1.3 million, respectively.

Stock Options

Stock option awards provide holders the right to purchase shares of Common Stock at prices determined by the Compensation Committee, at the time of grant, and must have an exercise price equal to or in excess of the fair market value of the Company’s common stock at the date of grant.

The fair value of options granted is estimated at the date of grant.

Expected volatility has been estimated using a combination of the historical volatility of the Company's common stock and the historical volatility of a group of comparable companies’

common stock, both using historical periods equivalent to the options’

expected lives.

Expected volatility has been estimated using the historical volatility of the Company's common stock using historical periods equivalent to the options’ expected lives.

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’

expected lives.

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

The expected life was estimated based on historical experience and expectation of employee exercise behavior in the future giving consideration to the contractual terms of the award.

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

Remaining Life

Outstanding at January 1, 2023 (1)

159,623  

$ 5.55  

50,000  

226,896 $ 6.58

( 28,796 ) 3.04

Canceled/Expired

( 28,796 ) 5.12

Outstanding at December 31, 2023

209,623  

$ 6.44  

$ 289,359  

194,304 $ 6.51 7.88 $ 14,266

Vested at December 31, 2023

209,623  

$ 6.44  

$ 289,359  

194,304 $ 6.51 7.88 $ 14,266

Exercisable at December 31, 2023

209,623  

$ 6.44  

$ 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.

194,304 $ 6.51 7.88 $ 14,266

( 1 ) Balances as of January 1, 2023 differ from those as of December 31, 2022 presented in the Company's 2022 Form 10 -K due to the special dividend paid during 2023.

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, 2023 , 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 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 total fair value of stock options which vested during the years ended December 31, 2023 and 2022 was approximately $ 123,000 and $ 375,000 , respectively.

The stock options exercised during the year ended December 31, 2023 had an intrinsic value of less than $ 0.1 million.

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

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

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:

Outstanding at January 1, 2023 (1)

329,333  

$ 6.95  

190,138  

295,705 $ 8.56

Vested and released

( 187,188 )  

( 217,799 ) 8.77

Canceled/Expired

( 36,578 )  

( 7,019 ) 7.63

Outstanding at December 31, 2023 (2)

295,705  

$ 8.56  

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.

486,325 $ 6.41

( 1 ) includes 30,702 awards which were settled in cash.

( 2 ) includes 59,309 awards which were expected to be settled in cash.

As of December 31, 2023 , $ 1.5 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 0.8 years.

The weighted average fair value at the date of grant for restricted stock awards granted during the years ended December 31, 2023 , 2022 and 2021 was $ 6.14 , $ 9.40 and $ 6.95 per share, respectively.

Based on the grant date, the total fair value of restricted stock and restricted stock units vested and released during the years ended December 31, 2022, 2021 and 2020 was approximately $ 1.2  million, $ 0.9  million and $ 1.0  million, respectively.

Based on the grant date, the total fair value of restricted stock and restricted stock units vested and released during the years ended December 31, 2023, 2022 and 2021 was approximately $ 1.9 million, $ 1.2 million and $ 0.9 million, respectively.

The Company's provision (benefit) for income taxes comprises the following:

For the year ended December 31,

$ 13,154,619  

$ 19,211,782  

$ 5,111,667  

$ 23,698,658 $ 13,154,619 $ 19,211,782

State and local

897,285  

513,753  

447,965  

13,994  

792,477 897,285 513,753

14,445 3,800 13,994

Total current provision

14,055,704  

19,739,529  

5,559,632  

( 3,818,283 )  

89,947  

11,375,962  

24,505,580 14,055,704 19,739,529

( 4,711,556 ) ( 3,818,283 ) 89,947

State and local

( 9,495 )  

31,499  

230,987  

( 86,177 ) ( 9,495 ) 31,499

Total deferred (benefit) provision

( 3,827,778 )  

121,446  

11,606,949  

( 4,797,733 ) ( 3,827,778 ) 121,446

Total provision

$ 10,227,926  

$ 19,860,975  

$ 17,166,581  

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

$ 19,707,847 $ 10,227,926 $ 19,860,975

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

As of December 31,

1 unchanged sentence

State net operating losses

$ 1,247,826  

$ 1,293,912  

336,333  

184,046  

$ 1,194,814 $ 1,247,826

777,146 336,333

Reserves and accruals

569,290  

741,684  

666,772 569,290

Amortization of intangible assets

24,532  

50,107  

Share-based compensation

510,058  

280,396  

506,451 510,058

Deferred revenue

66,011  

702,617  

2,256,099 66,011

Capitalized R&D

4,194,106  

6,198,455 4,194,106

Lease liability

443,902  

570,446  

380,162  

267,050  

319,074 443,902

514,150 380,162

Deferred income tax assets

7,772,220  

4,090,258  

12,475,359 7,772,220

valuation allowance

( 985,783 )  

( 943,903 ) ( 985,783 )

Deferred income tax assets, net of valuation allowance

$ 6,786,437  

$ 3,068,067  

$ 11,531,456 $ 6,786,437

Deferred income tax liabilities:

Amortization of goodwill

( 192,083 )  

( 192,130 ) ( 192,083 )

Property, plant and equipment

( 59,727 )  

( 284,242 )  

( 291,208 ) ( 284,242 )

Deferred income tax asset, net

$ 6,250,385  

$ 2,422,607  

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.

$ 11,048,118 $ 6,250,385

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.

The Company assesses all available positive and negative evidence to determine if its existing deferred tax assets are realizable on a more-likely-than- not basis.

1 unchanged sentence

The ultimate realization of a deferred tax asset is ultimately dependent on the Company's generation of sufficient taxable income within the available net operating loss carryback and/or carryforward periods to utilize the deductible temporary differences.

As of December 31, 2022 , the Company has a valuation allowance on certain state and local net operating losses which the Company determined were not realizable on a more-likely-than- not basis.

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.

As of December 31, 2023 , the Company maintains a full valuation on its state and local net operating losses which the Company determined were not realizable on a more-likely-than- not basis.

The Company's valuation allowance decreased by approximately $ 42,000 during the year ended December 31, 2023 .

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:

1 unchanged sentence

Statutory federal income tax rate

21.0 %  

State and local taxes

Change in fair value of common stock warrant

( 0.2 )%  

Section 162(m) limitation

Effective tax rate

23.2 %  

22.2 %  

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.

For the years ended December 31, 2023 and 2022 , 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), shortfalls from stock-based compensation, and state and local taxes.

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), 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:

1 unchanged sentence

Balance at beginning of year

$ 5,602,587  

$ 5,591,587  

$ 5,649,188  

$ 5,103,548 $ 5,602,587 $ 5,591,587

Tax positions related to the current and prior years:

11,000  

( 68,792 )  

( 17,096 ) ( 68,792 ) —

Lapses in applicable statutes of limitation

( 430,247 )  

( 4,842 ) ( 430,247 ) —

Balance at the end of the year

$ 5,103,548  

$ 5,602,587  

$ 5,591,587  

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, 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.

$ 5,081,610 $ 5,103,548 $ 5,602,587

Included in the balance of unrecognized tax benefits as of December 31, 2023 , 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, 2023 and December 31, 2022 , was $ 214,000 and $ 72,000 , respectively.

For the years ended December 31, 2023 and December 31, 2022 , the Company recorded an income tax expense of $ 142,000 and an income tax benefit of $ 23,000 , 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, 2023 .

The Company files federal income tax returns and income tax returns in various state and local tax jurisdictions.

The federal tax years open to examination are 2019  to 2022 .

The federal tax years open to examination are 2020 to 2023 .

The Company's state and local tax years that are open to tax examination are generally 2019 to 2023 .

3 unchanged sentences

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

7 unchanged sentences

The Company had a lease for the same location prior to this lease.

On May 26, 2017 the Company and MacAndrews & Forbes Incorporated ("M&F") entered into a ten -year office lease agreement (the “New HQ Lease”), pursuant to which the Company agreed to lease 3,200 square feet at 31 East 62nd Street, New York, New York.

On May 26, 2017 the Company and MacAndrews & Forbes Incorporated ("M&F") entered into a ten -year office lease agreement (the “New HQ Lease”), pursuant to which the Company agreed to lease 3,200 square feet at 31 East 62nd Street, New York, New York.

The Company is utilizing premises leased under the New HQ Lease as its corporate headquarters.

The Company has no leases that qualify as finance leases.

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 %.

Operating lease costs totaled $ 0.6 million for each of the years ended December 31, 2023 and 2022 .

Cash paid for amounts included in the measurement of lease liabilities from operating cash flows was $ 0.7 million and $ 0.6 million for the years ended December 31, 2023 and 2022 , respectively.

As of December 31, 2023 , the weighted-average remaining lease term of the Company’s operating leases was 2.87 years while the weighted-average discount rate was 4.53 %.

The following is a maturity analysis of the Company's lease liabilities as of December 31, 2023 :

$ 613,878  

678,627  

406,994  

409,971  

165,916  

Total undiscounted cash flows under operating leases

2,275,386  

Imputed interest

Present value of lease liabilities

$ 2,076,036  

As of December 31, 2023 , approximately $ 0.9 million of the lease liability is included in Other liabilities on the consolidated balance sheet with the current portion included in accrued expenses.

7 unchanged sentences

Commitments under the purchase orders do not exceed our planned commercial and research and development needs.

As of December 31, 2022 , the Company has approximately $ 33.8  million of purchase commitments associated with manufacturing obligations.

As of December 31, 2023 , the Company has approximately $ 14.8 million of purchase commitments associated with manufacturing obligations.

Related Party Transactions

Board of Directors and Outside Counsel

A former member of the Company’s Board of Directors who did not stand for re-election at the Company's 2021 annual meeting of stockholders is a 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 .

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, 2023 or December 31, 2022 .

During the year ended December 31, 2021 , the Company incurred expenses of approximately $ 0.1 million 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, 2023 and 2022 .

Effective June 13, 2023, a director was elected to the Company's Board of Directors who provides consulting services to the Company.

Under a consulting agreement, the director receives a monthly fee of $ 20,000 .

During the year ended December 31, 2023 , the Company incurred $ 240,000 , respectively, under this agreement.

The Company had no outstanding payables or accrued expenses related to the services performed by this vendor as of December 31, 2023 .

Real Estate Leases

1 unchanged sentence

The Company is utilizing premises leased under the New HQ Lease as its corporate headquarters.

The Company's rental obligations consist of a fixed rent of $ 25,333  per month in the first sixty-three months of the term, subject to a rent abatement for the first six months of the term.

The Company's rental obligations consisted of a fixed rent of $ 25,333 per month in the first sixty-three months of the term, subject to a rent abatement for the first six months of the term.

From the first day of the sixty-fourth month of the term through the expiration or earlier termination of the lease, the Company's rental obligations consist of a fixed rent of $ 29,333 per month.

1 unchanged sentence

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, 2022 , the Company paid $ 0.4  million of expenses associated with this lease.

During the year ended December 31, 2023 , the Company paid $ 0.4 million for rent and ancillary services associated with this lease.

The Company had no outstanding payables or accrued expenses related to this lease as of December 31, 2023 and 2022 .

Subsequent Event

On March 12, 2024, the Board of Directors declared a special dividend of $ 0.60 per share on the common stock of the Company.

The special dividend is payable on April 11, 2024 to shareholders of record at the close of business on March 26, 2024.

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