SIGA

Business Context and Reporting Period

This Form 8-K filing by SIGA Technologies, Inc. (SIGA) is dated December 15, 2015. The Company is currently undergoing a voluntary Chapter 11 reorganization in the United States Bankruptcy Court for the Southern District of New York, having filed the initial petition on September 16, 2014. The primary purpose of this report is to disclose the filing of a proposed Plan of Reorganization.

Key Financial Metrics

The filing does not provide standard financial metrics such as revenue, profit, cash flow, or operating margins. However, it discloses specific financial terms related to the reorganization plan:

• Prepetition Unsecured Claims: All claims (excluding PharmAthene's) are to be paid in full in cash.
• Immediate Payment to PharmAthene: $5 million to be paid on the effective date of the Plan.
• Extension Payment Option: SIGA may pay $20 million to PharmAthene to extend the decision period for settling the claim by 90 days.
• Debt and Liquidity: The filing does not provide a clear value for total debt or current liquidity positions outside the context of the reorganization plan.

Material Changes and Plan Terms

The material change reported is the submission of the Plan of Reorganization, supported by the official committee of unsecured creditors. Key terms include:

• Existing Shareholders: Ownership of existing common stock remains unaltered upon the Plan's effective date. However, these shares are subject to potential future cancellation without consideration if SIGA chooses to satisfy PharmAthene's claim via stock issuance.
• PharmAthene Litigation: The Plan allows SIGA to emerge from Chapter 11 while continuing its litigation with PharmAthene, Inc. without posting a bond.
• Resolution Options: Once the litigation is finalized, SIGA has 120 days (extendable by 90 days) to select one of four options to settle PharmAthene's claim:
  1. Payment in full in cash plus accrued interest.
  2. Compliance with the final court order (e.g., royalty stream).
  3. Issuance of 100% of newly issued SIGA stock to PharmAthene, resulting in the cancellation of all existing shares.
  4. A mutually agreed-upon alternative.
• Covenants: SIGA must adhere to affirmative and negative covenants until terminated, with remedies available to PharmAthene in case of breach.

Outlook, Risks, and Contingencies

Management commentary indicates the Plan is designed to facilitate an exit from bankruptcy while preserving the ability to litigate the PharmAthene claim. Significant risks and contingencies include:

• Plan Confirmation: The terms of the confirmed plan may differ materially from the proposed Plan, and the Plan may be amended.
• Shareholder Dilution/Cancellation: Existing shareholders face the risk of total loss of equity if the Company opts to settle the PharmAthene claim by issuing 100% of new stock.
• Litigation Outcome: The final treatment of the PharmAthene claim depends on the outcome of ongoing litigation.

Investor Verification Checklist

• Verify the status of the Bankruptcy Court's confirmation of the proposed Plan of Reorganization.
• Monitor the progress and final outcome of the litigation between SIGA and PharmAthene, Inc.
• Confirm whether SIGA exercises the option to pay the $20 million extension fee to PharmAthene.
• Review the full text of the Plan (Exhibit 99.1) for detailed covenants and conditions not summarized in this 8-K.
• Assess the likelihood of existing shares being cancelled versus the Company paying PharmAthene in cash or royalties.