What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-11 compared with 2024-03-12 · 223 added, 118 removed, 649 unchanged (34% of the section changed)

35 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

71 unchanged sentences

Product sales and supportive services

$ 133,330,181 $ 130,668,209 $ 86,661,583

Research and development

5,389,169 9,249,011 24,114,027

Total revenues

138,719,350 139,917,220 110,775,610

Operating expenses

Cost of sales and supportive services

31,289,229 17,825,090 10,432,561

Selling, general and administrative

25,136,050 22,043,023 35,117,241

Research and development

12,310,797 16,427,942 22,525,642

Total operating expenses

68,736,076 56,296,055 68,075,444

Operating income

69,983,274 83,621,165 42,700,166

Gain from change in fair value of warrant liability

Other income, net

6,087,116 4,155,508 1,031,903

Income before income taxes

76,070,390 87,776,673 44,132,732

Provision for income taxes

( 16,856,174 ) ( 19,707,847 ) ( 10,227,926 )

Net and comprehensive income

$ 59,214,216 $ 68,068,826 $ 33,904,806

Basic earnings per share

$ 0.83 $ 0.95 $ 0.46

Diluted earnings per share

$ 0.82 $ 0.95 $ 0.46

Weighted average shares outstanding:

71,253,172 71,362,209 72,929,550

Weighted average shares outstanding:

71,905,712 71,679,270 73,546,501

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

12 unchanged sentences

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

( 1,973 ) — ( 12,533 ) — — ( 12,533 )

Cash dividend ($ 0.45 per share)

— — — ( 32,940,395 ) — ( 32,940,395 )

Stock-based compensation

3 unchanged sentences

— — — 68,068,826 — 68,068,826

Repurchase of common stock

Issuance of common stock upon exercise of stock options

8,672 — — — — —

Issuance of common stock upon vesting of RSUs

Repurchase of common stock (including excise tax)

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

Issuance of common stock upon exercise of warrants

Issuance of common stock upon vesting of RSUs

144,576 15 ( 15 ) — — —

8 unchanged sentences

— — — 59,214,216 — 59,214,216

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

Issuance of common stock

49,940 5 ( 5 ) — — —

1 unchanged sentence

(106,029 ) ( 11 ) ( 799,884 ) — — ( 799,895 )

Issuance of common stock upon vesting of RSUs

369,142 37 ( 37 ) — — —

Cash dividend ($ 0.60 per share)

9 unchanged sentences

Cash flows from operating activities:

$ 59,214,216 $ 68,068,826 $ 33,904,806

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

Depreciation and other amortization

538,421 538,293 517,643

Gain on change in fair value of warrant liability

— — ( 400,663 )

Stock-based compensation

3,640,141 2,052,462 1,779,310

Write down of inventory, net

Deferred income taxes (benefit) provision

327,373 579,239 201,472

Deferred income taxes provision (benefit)

193,416 ( 4,797,733 ) ( 3,827,778 )

Deferred IV TPOXX® revenue

( 10,457,920 ) 10,240,000 7,348,720

Changes in assets and liabilities:

Accounts receivable

( 35,178 ) 24,276,009 38,243,490

15,342,653 ( 25,524,485 ) ( 19,964,183 )

Prepaid expenses and other assets

( 591,303 ) ( 3,011,346 ) 171,811

Accounts payable, accrued expenses and other liabilities

( 5,739,479 ) 1,996,838 1,533,804

Income tax payable

Deferred IV TPOXX® revenue

( 13,670,533 ) 20,381,228 ( 17,897,370 )

Net cash provided by operating activities

48,761,807 94,799,331 41,611,062

Cash flows from investing activities:

Capital expenditures

( 42,450 ) ( 21,686 ) —

Cash used in investing activities

( 42,450 ) ( 21,686 ) —

Cash flows from financing activities:

Payment of employee tax obligations for common stock tendered

( 799,895 ) ( 214,794 ) ( 12,533 )

Repurchase of common stock

— ( 11,072,511 ) ( 13,006,331 )

Payment of dividend

( 42,665,044 ) ( 32,135,118 ) ( 32,940,395 )

Cash used in financing activities

( 43,464,939 ) ( 43,422,423 ) ( 45,959,259 )

Net increase/(decrease) in cash and cash equivalents

5,254,418 51,355,222 ( 4,348,197 )

Cash and cash equivalents at the beginning of period

150,145,844 98,790,622 103,138,819

Cash and cash equivalents at end of period

$ 155,400,262 $ 150,145,844 $ 98,790,622

Supplemental disclosure of cash flows information:

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

$ 462,686 $ — $ —

Conversion of warrant to common stock

$ — $ — $ 6,120,778

Issuance of common stock

$ 417,000 $ — $ —

Issuance of common stock upon cashless exercise

$ — $ 87,540 $ —

Cash income taxes paid, net

$ 30,357,747 $ 3,500,873 $ 31,372,881

The accompanying notes are an integral part of these financial statements

5 unchanged sentences

(“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.

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

Government and international governments (including government affiliated entities).

In certain international markets, the Company may sell TPOXX® through a distributor.

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.

TPOXX® is an 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 the oral formulation of 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.

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®.

On May 18, 2022 the FDA approved IV TPOXX® for the treatment of smallpox.

In addition to being approved by the FDA, oral TPOXX® (tecovirimat) has received regulatory approval from the European Medicines Agency ("EMA"), Health Canada, the Medicines and Healthcare Products Regulatory Agency ("MHRA") of the United Kingdom, and most recently, in December 2024, the Japanese Pharmaceuticals and Medical Devices Agency ("PMDA").

The EMA, MHRA and PMDA approved oral TPOXX® for the treatment of smallpox, monkeypox ("mpox"), cowpox, and vaccinia complications following vaccination against smallpox.

Health Canada approved TPOXX® for the treatment of smallpox.

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

Summary of Significant Accounting Policies

1 unchanged sentence

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

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

The most significant estimates are the variables used in the calculation of reported amounts of revenue recognized over time.

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

12 unchanged sentences

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 certain receivables from international government sales are coordinated through the International Promotion Agreement with Meridian Medical Technologies ("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

1 unchanged sentence

At December 31, 2024 and 2023 , 45 % and 53 %, 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.

At December 31, 2024 , most of the remaining balance in accounts receivable represent receivables from international sales, which include sales to two European governments and a government in the Asia Pacific region.

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

33 unchanged sentences

As of December 31, 2024 , 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.

four performance obligations relate to research and development services;

and four relate to manufacture and delivery of product.

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

30 unchanged sentences

as of December 31, 2024 , the accounts receivable balance in the balance sheet includes approximately $ 0.5 million of unbilled receivables.

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

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

6 unchanged sentences

As of December 31, 2024 , the aggregate amount of transaction price allocated to remaining performance obligations was $ 92.8 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.

With respect to current obligations related to the manufacture and delivery of product, the Company expects such obligations to be mostly recognized as revenues within the next 12 months.

With respect to the performance obligations related to research and development services, the Company expects such obligations to be recognized as revenue within the next three years as the specific timing for satisfying performance obligations is subjective and at times outside the Company's control.

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

19 unchanged sentences

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 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.

1 unchanged sentence

Increases (or decreases) in accrued expenses result in adjustments to earnings for the associated valuation updates.

The fair value of performance based restricted stock unit (“PSU”) awards are based on targets of our stock price.

The Company uses a Monte Carlo simulation through a third party on the date of grant to estimate the fair value of the PSUs that are based on market conditions, or market-based PSUs.

The compensation expense for PSUs is recognized using an accelerated amortization model.

The Company recognizes income taxes utilizing the asset and liability method of accounting for income taxes.

24 unchanged sentences

There were no transfers between levels of the fair value hierarchy during 2024 or 2023 .

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 .

As of December 31, 2024 and December 31, 2023 , the Company had approximately $ 53.5 million and $ 95.1 million, respectively, of cash equivalents classified as Level 1 financial instruments.

There were no Level 2 or Level 3 financial instruments as of December 31, 2024 or December 31, 2023 .

For the years ended December 31, 2024, 2023 and 2022 , interest income of $ 6.1 million, $ 4.2 million and $ 1.0 million, respectively, was included in Other income, net on the Consolidated Statements of Operations and Comprehensive Income.

8 unchanged sentences

The Company is managed and operated as one business.

The entire business is managed by a single management team that reports to the chief executive officer, who is the Chief Operating Decision Maker.

The Company does not operate separate lines of business or separate business entities with respect to any of its product candidates.

Accordingly, the Company does not prepare discrete financial information with respect to separate product areas or by location and has only one reportable segment.

The entire business is managed by a single management team that reports to the Chief Executive Officer, who is the Chief Operating Decision Maker ("CODM").

Refer to Note 11 for further information on the Company's reportable segment.

Recent Accounting Pronouncements

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.

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

In November 2024, the FASB issued ASU 2024 - 03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Disaggregation of Income Statement Expenses , requiring public entities to disclose additional information about specific expense categories in the notes to the consolidated financial statements on an interim and annual basis.

ASU 2024 - 03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2024 - 03.

Procurement Contracts and Research Agreements

5 unchanged sentences

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.

advanced development of IV TPOXX®, post-marketing activities for oral and IV TPOXX®, development for a pediatric formulation, and procurement activities.

As of December 31, 2024 , 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 $ 519.6 million of payments are related to exercised options, and up to approximately $ 31.2 million of payments are currently specified as unexercised options.

9 unchanged sentences

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:

The remaining $ 0.3 million of deferred revenue was recognized in the second quarter of 2024 as the IV FDP containing such IV BDS was delivered to and accepted by the Strategic Stockpile.

The options that have been exercised as of December 31, 2024 , provide for payments up to approximately $ 519.6 million.

As of December 31, 2024 , there are exercised options for the following activities:

payments up to $ 450.2 million for the manufacture and delivery of up to 1.5 million courses of oral TPOXX®;

2 unchanged sentences

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.

As of December 31, 2024 , a cumulative total of $ 396.9 million of oral TPOXX® has been delivered to the Strategic Stockpile and accepted, of which approximately $ 15 million was delivered in the first quarter of 2024, approximately $ 8 million was delivered in the third quarter of 2024, and approximately $ 51 million was delivered in the fourth quarter of 2024;

a cumulative total of $ 25.4 million of IV FDP has been delivered to the Strategic Stockpile and accepted, of which approximately $ 17 million of revenue (including recognition of deferred revenue) was recorded in the second quarter of 2024 and approximately $ 8 million of revenue (including recognition of deferred revenue) was recorded in the fourth quarter of 2024;

$ 10.3 million has been received for the manufacture of IV BDS (such amount is recorded as deferred revenue);

and the Company has been cumulatively reimbursed $ 9.4 million in connection with post-marketing activities for oral and IV TPOXX®.

Unexercised options specify potential payments up to approximately $ 31.2 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 $ 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 remaining unexercised options specify 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.

6 unchanged sentences

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;

If BARDA decides only to 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.

BARDA may also decide not to exercise either remaining option.

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.

5 unchanged sentences

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 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 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 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.

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 was for Canada and approximately $ 38 million was for jurisdictions in Europe, Asia-Pacific, and the Middle East.

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 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 2024, the Company had sales of approximately $ 10 million with the U.S.

Department of Defense ("DoD").

Sales consist mostly of delivery of oral TPOXX®, with a minor amount of IV TPOXX® delivered.

In 2023, the Company had sales of approximately $ 11 million with the DoD.

Sales consist of delivery of oral TPOXX®.

Over the past three years, the Company has received three procurement contracts from the DoD, including a $ 9 million contract in August 2024, which has been fulfilled.

International Sales Activity

In the year ended December 31, 2024 , the Company had international sales of $ 23.0 million consisting of deliveries of oral TPOXX® to 13 countries.

For international sales in the first and second quarters, Meridian was the counterparty to contracts under which the sales were made (see discussion and definition below regarding International Promotion Agreement).

For international sales in the third and fourth quarters, the Company was the counterparty to the contracts under which the sales were made.

In the year ended December 31, 2023 , the Company 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.

Meridian was the counterparty to international contracts under which these sales were made (see discussion and definition below regarding International Promotion Agreement).

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.

1 unchanged sentence

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

International Promotion Agreement

Under the terms of the current International Promotion Agreement, which was amended on March 27, 2024, and effective June 1, 2024, and further amended on August 30, 2024, the Company has primary responsibility for the advertising, promotion and sale of oral TPOXX® in all geographic regions.

Meridian has limited, non-exclusive rights to advertise, promote, offer for sale and sell oral TPOXX® in the European Economic Area, Australia, Japan, Switzerland, the United Kingdom and the Association of Southeast Asian Nations and its member states (collectively, the “Current Territory”).

Meridian also performs non-promotional activities under specified contracts with third parties entered into prior to June 1, 2024, that provide for the sale of oral TPOXX® in the Current Territory.

The International Promotion Agreement entitles Meridian to receive a fee equal to a high single digit percentage of collected proceeds (whether collected by Meridian or the Company), net of certain expenses, of sales of oral TPOXX® in the Current Territory in the field of use specified in the International Promotion Agreement.

The International Promotion Agreement has a fixed term that expires on May 31, 2026, with no automatic renewal.

Under the terms of the original International Promotion Agreement ("Pre-amendment International Promotion Agreement"), which had an initial term that expired on May 31, 2024, Meridian had been 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 agreed not to commercialize any competing product, as defined in the Pre-amendment International Promotion Agreement, in the specified field of use in the Territory.

Under the Pre-amendment International Promotion Agreement, as well as the current International Promotion Agreement, SIGA has always retained ownership, intellectual property, distribution and supply rights and regulatory responsibilities in connection with TPOXX®, and, in the United States market, also retained sales and marketing rights with respect to oral TPOXX®.

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

Sales to international customers pursuant to the Pre-amendment International Promotion Agreement were invoiced and collected by Meridian, and such collections were remitted, less Meridian's fees, to the Company under a quarterly process specified in the Pre-amendment International Promotion Agreement;

and Meridian was entitled to 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 were less than or equal to a specified threshold, and to a higher specified percentage of such collected net proceeds for calendar years in which such net collected amounts exceeded the specified threshold.

Subsequent to June 1, 2024, only specified procurement contracts for the Current Territory entered into prior to June 1, 2024, continue to involve Meridian invoicing and collecting proceeds, and retaining a fee pursuant to the International Promotion Agreement.

Research Agreements and Grants

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.

As of December 31, 2023 , the Company invoiced the full amount of available funding, and as a result, 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.

For the year ended December 31, 2023 , the Company, under the PEP Label Expansion R&D Contract, recognized revenue of $ 6.4 million on an over time basis.

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

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Raw materials

$ 134,535 $ 8,061,800

Work in-process

40,417,411 53,649,859

Finished goods

9,011,934 2,506,678

$ 49,563,880 $ 64,218,337

Property, Plant and Equipment

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December 31, 2023

Lease liability, current portion

$ 2,429,897 $ 2,087,379

Professional fees

1,473,956 445,653

Lease liability, current portion

546,820 564,009

Research and development vendor costs

446,412 418,681

637,750 3,365,103

105,275 3,300,985

Accrued expenses and other current liabilities

$ 5,640,110 $ 10,181,810

Per Share Data

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Net income for basic earnings per share

$ 59,214,216 $ 68,068,826 $ 33,904,806

Change in fair value of warrants

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

$ 59,214,216 $ 68,068,826 $ 33,504,143

Weighted-average shares

71,253,172 71,362,209 72,929,550

Effect of potential common shares

652,540 317,061 616,951

Weighted-average shares:

71,905,712 71,679,270 73,546,501

Earnings per share:

$ 0.83 $ 0.95 $ 0.46

Earnings per share:

$ 0.82 $ 0.95 $ 0.46

For the years ended December 31, 2024 , December 31, 2023 and December 31, 2022 , 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.

For the year ended December 31, 2022 , 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.

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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:

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

timing of procurement orders under government contracts;

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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 .

As a result, during the year ended December 31, 2024 , the Company did not repurchase any shares.

During the year ended December 31, 2023 , the Company repurchased approximately 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 March 12, 2024, the Board of Directors declared a special dividend of $ 0.60 per share on the common stock of the Company, which resulted in an overall dividend payment of approximately $ 43 million.

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

Stock Compensation Plans

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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.

The fair value of stock options issued under our stock plan have been estimated with the following assumptions:

Year Ended December 31, 2024

Weighted Average Expected Life (in Years)

Risk-free Interest Rate

4.1 % - 4.2 %

75.3 % - 75.8 %

Dividend Yield

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

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208,584 $ 6.08

( 28,796 ) 3.04

Canceled/Expired

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629,257 $ 5.59 8.43 $ 556,565

Vested at December 31, 2023

Vested and Expected to Vest at December 31, 2024

629,257 $ 5.59 8.43 $ 556,565

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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.

As of December 31, 2024 , the remaining unrecognized stock-based compensation cost related to stock options expected to be recognized is $ 1.4 million.

The total fair value of stock options which vested during the years ended December 31, 2024 and 2023 was approximately $ 24,964 and $ 123,000 , respectively.

There were no stock options exercised during the years ended December 31, 2024 and December 31, 2022.

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.

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

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

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( 100,612 ) ( 86,177 ) ( 9,495 )

Total deferred (benefit) provision

Total deferred provision (benefit)

193,416 ( 4,797,733 ) ( 3,827,778 )

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539,738 506,451

28,213 34,546

Deferred revenue

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Statutory federal income tax rate

21.0 % 21.0 % 21.0 %

State and local taxes

0.2 % 0.1 % 1.6 %

Change in fair value of common stock warrant

Section 162(m) limitation

1.5 % 0.4 % 0.7 %

( 0.5 )% 1.0 % 0.1 %

Effective tax rate

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.

22.2 % 22.5 % 23.2 %

For the years ended December 31, 2024, 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), stock-based compensation related items, state and local taxes, and other items.

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

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The total amount accrued for interest and penalties as of December 31, 2024 and December 31, 2023 , was $ 315,000 and $ 214,000 , 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.

For the years ended December 31, 2024 and December 31, 2023 , the Company recorded an income tax expense of $ 101,000 and $ 142,000 , 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, 2024 .

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The Company's state and local tax years that are open to tax examination are generally 2020 to 2024 .

Revenues by Geographic Region

Segment and Geographic Information

The Company operates in one single operating and reportable segment, which includes all activities related to the sale of the Company’s Oral and IV TPOXX® as well as research and development services.

The Company derives revenue primarily from sales to the U.S.

Government as well as international governments (including government affiliated entities) and manages the business activities on a consolidated basis.

The segment derives revenues from customers through the delivery of product and fulfillment of research and development services.

The CODM assesses performance for the segment and decides how to allocate resources based on net income that also is reported on the income statement as consolidated net income.

Consolidated net income is also a measure that is considered in monitoring budget versus actual results.

The CODM does not review assets in evaluating the results of the segment, and therefore, such information is not presented.

The following table provides the operating result of the Company's segment:

For the years ended December 31,

Product sales and supportive services

$ 133,330,181 $ 130,668,209 $ 86,661,583

Research and development

5,389,169 9,249,011 24,114,027

Total revenues

138,719,350 139,917,220 110,775,610

Cost of sales and supportive services

31,289,229 17,825,090 10,432,561

Employee expenses

14,189,116 13,058,095 11,772,293

R&D vendor expenses

2,097,398 6,748,453 14,543,572

Professional fee expenses

3,837,929 4,820,843 3,090,985

International promotion fees

3,098,402 3,938,867 17,632,664

Other segment items (1)

14,254,475 9,922,345 10,212,445

Interest income

( 6,117,589 ) ( 4,173,146 ) ( 1,041,642 )

Income tax expense

16,856,174 19,707,847 10,227,926

$ 59,214,216 $ 68,068,826 $ 33,904,806

( 1 ) Other segment items include insurance, regulatory and consultant expenses, as well as various general corporate costs.

Revenues by geographic region were as follows:

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United States

$ 115,743,994 $ 118,650,253 $ 39,803,888

International

13,857,043 966,633 14,853,233

737,677 — 38,875,657

Europe, Middle East and Africa (EMEA)

8,380,636 20,300,334 16,270,033

Total International

22,975,356 21,266,967 70,971,722

Total revenues

$ 138,719,350 $ 139,917,220 $ 110,775,610

Commitments and Contingencies

Operating lease commitments

The Company leases its Corvallis, Oregon, facilities and office space under an operating lease which was signed on November 3, 2017 and commenced on January 1, 2018.

The Company leases its Corvallis, Oregon, office space under an operating lease which was signed on November 3, 2017 and commenced on January 1, 2018.

The initial term of this lease was to expire on December 31, 2019, after which the Company had two successive renewal options;

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In the second quarter of 2021, the Company exercised the second renewal option, which extended the lease expiration date to December 31, 2024.

In connection with the exercise of the second renewal option, the Company recorded an increase to operating lease right-of-use assets and operating lease liabilities of approximately $ 0.7 million in the second quarter 2021.

In the second quarter of 2024, the Company entered into an additional addendum, which extended the lease expiration date to December 31, 2026.

In connection with this additional addendum, the Company recorded an increase to operating lease right-of-use assets and operating lease liabilities of approximately $ 0.5 million in the second quarter of 2024.

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

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Operating lease costs totaled $ 0.6 million for each of the years ended December 31, 2024 and 2023 .

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.

Cash paid for amounts included in the measurement of lease liabilities from operating cash flows was $ 0.7 million for each the years ended December 31, 2024 and 2023 , respectively.

As of December 31, 2024 , the weighted-average remaining lease term of the Company’s operating leases was 2.23 years while the weighted-average discount rate was 9.95 %.

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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, 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.

Board of Directors

Effective June 13, 2023, an individual was elected to the Company's Board of Directors who was already providing and continued to provide consulting services to the Company.

Under a consulting agreement, the director received a monthly fee of $ 20,000 in 2023 and 2024.

During the year ended December 31, 2024 , the Company incurred $ 240,000 under this agreement.

The Company had no outstanding payables or accrued expenses related to the services performed by this vendor as of December 31, 2024 .

Effective September 26, 2024, the consulting agreement was amended;

the amendment specifies that the director would receive a payment of between $ 120,000 and $ 240,000 in the event that the Company receives a request for proposal ("RFP") or request for information ("RFI") from the Administration of Strategic Preparedness and Response within the U.S.

Government before July 1, 2025.

Because the Company did not receive an RFI or an RFP before January 1, 2025, the maximum payment now available is $ 180,000 .

In addition, pursuant to the amendment the director is entitled to receive the monthly fee through March 31, 2026, unless the director resigns as a consultant, or the Company terminates the director for cause.

On March 6, 2025, the director resigned from the Company’s Board of Directors, See Item 9B (Other Information).

Real Estate Leases

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The Company had no outstanding payables or accrued expenses related to this lease as of December 31, 2024 and 2023 .

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