Filed Pursuant to Rule 424(b)(3)
Registration No. 333-211866
PROSPECTUS
SIGA Technologies, Inc.
Up to
35,000,000
Shares
of Common Stock Issuable Upon the Exercise of Rights to Subscribe for Such Shares
SIGA Technologies, Inc. (SIGA, the Company, we or us), is distributing, at no charge, to the holders of our common stock, par value $0.0001 per share, non-transferable subscription rights to purchase shares of our common stock. The subscription rights will not be tradable. The price per share will be determined after the close of business on November 8, 2016, which is the expiration date of our offering period (the expiration date), and will equal the lower of $1.50 or 85% of the volume weighted average price of our shares during market hours on the expiration date, as reported on the OTC Pink Sheets. We refer to the price as so determined as the subscription price.
Each stockholder will receive one subscription right for each share of our common stock owned on October 12, 2016, the record date of the rights offering, and each subscription right will entitle its holder to invest $0.65 towards the purchase of shares of our common stock , which we refer to as the basic subscription right, at the subscription price. If you exercise your basic subscription rights in full, and other stockholders do not fully exercise their basic subscription rights, you will be entitled to an over-subscription privilege to purchase a portion of the unsubscribed common stock at the subscription price, subject to proration limitations and the potential ownership limitations set forth under Rights Offering — Limitations on Exercise, which we refer to as the over-subscription privilege. The number of shares that you will obtain will equal the accepted dollar amount of your investment divided by the subscription price rounded down to the nearest whole share. Each subscription right consists of a basic subscription right and an over-subscription privilege, which we refer to, together, as the subscription right.
In connection with the rights offering, we have entered into an investment agreement, or backstop agreement, with ST Holdings One LLC (“MacAndrews”), which is a wholly owned subsidiary of MacAndrews & Forbes LLC, Blackwell Partners LLC - Series A, Nantahala Capital Partners Limited Partnership, Nantahala Capital Partners II Limited Partnership, Silver Creek CS SAV, L.L.C. and Nantahala Capital Partners SI, LP (collectively, together with MacAndrews, the Backstop Parties). Under the terms of the backstop agreement, the Backstop Parties will purchase, pursuant to a separate private placement, a number of shares of common stock equal to the number of shares that are not subscribed for in the rights offering, if any, provided that to the extent MacAndrews acquisition of our voting stock would require a filing and approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act), MacAndrews will receive non-voting convertible preferred stock in lieu of common stock, which preferred stock will automatically convert to common stock upon receipt of HSR Act approval, and will not be convertible to common stock without such HSR approval. Under the backstop agreement, the subscription price will be equal to the subscription price applicable to all shareholders under the rights offering. The Backstop Parties, taken together, will receive a fee of $1.76 million, or 5% of the maximum gross proceeds of the rights offering (the backstop fee), for providing the backstop commitment, payable, at the option of the Company, in cash or stock or, subject to the mutual agreement of the parties, other equity securities. In addition, the Backstop Parties will have certain registration rights with respect to shares received pursuant to the backstop agreement, as more fully described in The Rights Offering — Backstop Agreement. Following the rights offering and the consummation of the transactions contemplated by the backstop agreement, MacAndrews and its affiliates may be able to exert significant influence on, or may control, our affairs and actions, including matters submitted for a stockholder vote.
The total purchase price of the common stock offered in the rights offering is $35,284,792, assuming full participation, payable in cash. The net proceeds of the rights offering will be used by us for the satisfaction of PharmAthene, Inc.s judgment against us (the PharmAthene Judgment), due by November 30, 2016 pursuant to our Third Amended Chapter 11 Plan as approved by the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court). As of June 30, 2016, the Companys obligation under the PharmAthene Judgment was approximately $204 million. On July 8, 2016, SIGA paid PharmAthene $20 million toward the PharmAthene Judgment, and in September and early October 2016, the Company paid an additional $100 million toward the PharmAthene Judgment. Immediately prior to the consummation of the rights offering, the remaining balance of the PharmAthene Judgment is expected to be approximately $84 million (including monthly accrued interest).
The rights will expire at 5:00 p.m., New York City time, November 8, 2016, unless extended as described herein, which date we refer to as the expiration date. We may extend the period for exercising the rights in our sole discretion; provided, however, that we may not extend the expiration date of the rights offering past November 29, 2016. Funds received in payment of the subscription price are anticipated to be held in escrow until the loan transaction described in this prospectus is consummated and the other conditions to the rights offering are satisfied or waived (if waivable), or until we definitively determine to terminate the rights offering. Such funds will not be released from escrow to or for use by us, whether for satisfaction of the PharmAthene Judgment or for any other purpose, unless we consummate the rights offering. You will have no right to rescind your subscriptions after receipt of your payment of the subscription price except as described in this prospectus. Rights that are not exercised prior to the expiration date will expire and have no value. Stockholders who do not participate in the rights offering will continue to own the same number of shares of our common stock and, if any rights are exercised, will own a smaller percentage of the total shares of our common stock issued and outstanding after the rights offering. In addition, neither the rights offering nor the loan transaction described in this prospectus will be consummated unless we determine that, upon consummation of both the rights offering and the loan transaction described in this prospectus (or through some other source of financing), we will have sufficient cash to fully satisfy the PharmAthene judgment. We may not waive these conditions. If we determine that we do not have sufficient cash to fully satisfy the PharmAthene judgment, we will terminate the rights offering and return your subscription payment to you without interest or penalty. In addition, if we are unable to satisfy the PharmAthene judgment, PharmAthene may be entitled to all the equity of the Company. If PharmAthene receives all the equity of the Company, you will lose any shares of the Companys common stock that you currently hold and will therefore suffer a complete loss of your equity investment in the Company (other than any subscription payments made in connection with the rights offering, which will be returned to you as described herein).
We are distributing the rights and offering the common stock directly to you. We have not employed any brokers, dealers or underwriters in connection with the solicitation or exercise of rights in the rights offering and no commissions, fees or discounts will be paid in connection with the rights offering. American Stock Transfer & Trust Company, LLC is acting as the subscription agent. While certain of our directors, officers and other employees may solicit responses from you, those directors, officers and other employees will not receive any commissions or compensation for their services other than their normal compensation.
|
Per Share of
Common Stock
(1)
|
Total
(2)
|
Subscription Price
|
$
|
1.50
|
|
$
|
35,284,792
|
|
Estimated Expenses
|
|
0.02
|
|
|
500,000
|
|
Net Proceeds to SIGA
|
$
|
1.48
|
|
$
|
34,784,792
|
|
|
(1)
|
Subscription price estimated for the purpose of calculated estimated expenses per share and net proceeds per share only. The estimated subscription price is equal to the lower of $1.50 or 85% of the volume weighted average price of our shares during market hours on October 20, 2016, as reported on the OTC Pink Sheets, of $2.61. The actual subscription price may differ.
|
|
(2)
|
Assumes the rights offering is fully subscribed.
|
Exercising your subscription rights for the common stock involves risks. See Risk Factors beginning on page
13
of this prospectus.
Neither the Securities and Exchange Commission nor any state securities regulators have approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Our securities are not being offered in any jurisdiction where the offer is not permitted under applicable local laws.
If you have any questions or need further information about this rights offering, please call D.F. King & Co., Inc., the information agent for the rights offering, toll free at 1-800-207-2872, or by email at infoagent@dfking.com.
The date of this prospectus is October 21, 2016.