Good day, ladies and gentlemen, and welcome to the SIGA Technologies' Quarterly Business Update Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Todd Fromer of Investor Relations. Sir, you may begin.

Thank you, and thank you all for joining us today. This is Todd Fromer, Managing Partner of KCSA Strategic Communications, Investor Relations Consultant to SIGA Technologies. Hosting the call today are Dr. Eric Rose, Chief Executive Officer and Chairman; Daniel Luckshire, the Chief Financial Officer. Today's call is being simultaneous webcasted and is available on SIGA's website. A replay of the call will also be available in recorded format and on the company's website. Before we begin today, I would like to remind everyone that this conference call contains statements that constitute forward-looking statements. A Safe Harbor statement covering this call will be read at the end of the call and can be found in our press release for financial results for the first quarter ended March 31, 2013. With that said, I'd like to turn the call over to Dr. Eric Rose. Eric, the floor is yours.

Thank you, Todd. Good afternoon, and thank you all for joining us for this call. We'll provide you with a business update as usual, and then we will open the call for questions. Starting with the commercial side of our business. In March, we delivered approximately 190,000 courses of Arestvyr in the United States Government Strategic National Stockpile under our BARDA contract. This delivery has a value of approximately $25 million and importantly, represents the first of a series of planned deliveries of our proprietary smallpox antiviral drugs. Within the next 3 months, we plan to make 2 additional deliveries of the SNS, each approximately the same size as the first delivery. At the point of the third delivery, we expect to surpass the $500,000 -- 500,000 course delivery threshold, as specified in the BARDA contract, which is a key milestone for us and that we will be able to invoice for all product deliveries, which have been accepted by BARDA into the SNS. Also related to the BARDA contract, I'm pleased to tell you that we received notification that BARDA believe that we have met the contract milestone for the commercial validation report for our drugs. Having met this milestone, we invoiced BARDA for an $8.2 million milestone payment, which we expect to receive in the second quarter. On research and development side of our business, we continue to invest time and resources into our key areas of R&D. With respect to Arestvyr, we're making good progress on development activities that dovetail with regulatory guidance from the FDA. With regard to our preclinical programs, we continue to focus on developing oral, bioavailable, nontoxic drugs primarily flaviviruses, arenaviruses and filoviruses. Our Dengue fever and Lassa programs are examples of this broad strategic initiative. Additionally, we are continually assessing opportunities to build on our experience and expertise in rare diseases. Turning to our litigation with PharmAthene. We continue to wait for a ruling by the Delaware Supreme Court. As a reminder, oral arguments relating to the PharmAthene ligation were heard by the Delaware Supreme Court en banc on January 10. At this point, I'd like to turn the call over to Dan.

Thank you, Eric. Good afternoon to those on the call. I have a brief update on the timing of our 10-Q. In prior quarters, it has been our practice to file our 10-Q and issue our earnings release concurrently with the business update call. This quarter, we are still discussing with our independent auditors, PricewaterhouseCoopers, tactical questions concerning how we account for certain warrants issued in previous years. Accordingly, we are not filing the 10-Q or issuing the earnings release today. The warrants being reviewed were audited in prior years are noncash in nature. Additionally, the accounting for warrants does not impact operations and does not impact our expectations for future cash flows. We are working with PwC to complete the tactical analysis and file the 10-Q as soon as possible. This concludes our prepared remarks. Thank you for attending this business update, and we'll now open the line for questions.

[Operator Instructions] Our first question comes from Adnan Butt of RBC Capital Markets.

The first question is on the price per dose. Will it stay constant given the numbers that you just gave today? Or is there -- could it change over time, with more deliveries or approvals, et cetera? And then secondly, in terms of cash coming in, based on what you -- based on the expectation that 500K doses will be delivered, I think you said in calendar third Q, is that when we should expect the cash to be paid for those first set of doses delivered?

Right. So on the first part of your question, the price per course does not change unless we get FDA approval. And so we've mentioned in prior calls that we expect the approval process to be beyond the delivery process. So we do not expect any changes in the price per course. On the second part, if I understand your question correctly, yes, once we cross the threshold, the 500,000 course threshold, then we will be able to invoice cumulatively for all courses that have been delivered to that point, so for at least 500,000 courses or more, if we delivered more. So to put it in context, we delivered approximately 190,000 courses. And as we mentioned, that has a value of $25 million -- of approximately $25 million.

[Operator Instructions] Our next question comes from Greg Wade of Wedbush.

Dan, with respect to -- just maybe a couple of financial metrics associated with the quarter, what was cash at the end of the quarter?

At this point, we -- the policy is not to comment on financials before we file the 10-Q. So once we file 10-Q, then we'll be able to comment on our financials.

Okay. And with respect to the warrant pricing, can you give us some idea as to the magnitude this could have on financial statements? If there's a change, would you expect to have to restate? And then could it also impact the cumulative losses associated with rest of your development and the potential pending deal with PharmAthene?

All right. Taking it backwards is the -- any type of accounting related to the warrants will not be part of the net profit calculation to our understanding. So that does not impact that process at all. On the first part of the question, is that -- this is a technical matter. It's something as we mentioned that is noncash, doesn't impact our operations, doesn't impact cash flows expectations going forward. We're working with our independent auditors to work through it. And then we expect to -- once we work through it, then we'll be able to iron out the specifics.

And when is your Q due? When is the last date?

The due date for filers in our category is this Friday.

Do you expect you'll have to file for an extension?

It's premature at this time to answer that question.

Our next question is a follow-up from Adnan Butt of RBC Capital Markets.

Sorry my line disconnected. I just wanted to follow up and ask. Did you say anything on the approval timing? Because that's where my line got disconnected. And just a follow-up on the litigation process, there's no timing as to when a ruling or a decision could be out, correct?

Yes, yes. The court has discretion on their timing. And so they don't specify specifically what the timing will be. In terms of -- we didn't say anything specifically on the FDA approval timing other than, as we mentioned in prior calls, we expect that process to go beyond the full delivery process.

Our next question comes from Joaquin Horton of Sterne Agee.

I want to ask you a question about the delivery on the courses. Is that going to all take place in the second quarter? Or is it stretching into the third quarter also?

Well, the deliveries will continue beyond the second quarter. We have said that we expect to reach the 500,000 course threshold to start payment on a cumulative basis, then on an ongoing basis once we reach the 500,000 course threshold. So there will be -- again, we expect to reach that 500,000 course threshold in the second quarter, but there will be deliveries beyond that.

Okay. So in other words, you're delivering approximately 190,000 courses. You've already delivered 1. You're going to deliver 2 more by the end of this quarter?

That's what we've said.

Okay, great. I see where we added a new board member. Anything you want to add to your thoughts on why we added a board member, the former Chairman of Pfizer?

We're very pleased that Jeff Kindler, the former CEO and Chair of Pfizer is joining our board. We think we have a very interesting and important business. And I think, Mr. Kindler appreciated that as well. And we're delighted that he's agreed to join us.

One other -- in fact a couple of questions. One, how are you finding the government, BARDA, the FDA -- well, not necessarily FDA but the Department of Defense and NIH, are they accepting white papers? Or is there any grant requests out there that we can be involved in?

We are always both looking at the landscape for potential grants and contracts from the government to which we could be responsive. And there is a considerable amount of such proposals or requests for proposals for such R&D opportunities that we see and for which we apply. In fact, there's -- they are too numerous for us to mention because we have people doing this every day. NIAID, BARDA, DoD, all of these agencies have a rich R&D agenda, particularly when it comes to infectious disease and particularly for biodefense threats. And we have been responsive to many of these in the past, obviously quite successfully. And we continue to apply for those, and will continue to apply for those.

So the government is, even though with the tight money situation, is still pretty active then?

We've seen some very impressive RFPs in our space, and we're responding to them.

Terrific. Looking past -- I don't know if we can look past the lawsuit, but there seems to be a lot of potential for this company to grow, is there -- at some point in time, when do you think that you'll be able to share that with us?

Well, I think just in the context of our contract alone, this is a key point of inflection for the company to reach this commercial transition. We do have an aggressive R&D agenda with developing other drugs, particularly antivirals, where we think we're pretty good at that. And in addition, we think there are other business opportunities that will and are presenting themselves to us. But we've got to navigate this transition and execute against this contract. That's what we said is our primary focus for quite some time. I think we're living up to that challenge by being on time with our deliveries and being complete with those deliveries, meeting all the security requirements that are required of us, as well as all the quality issues that are incumbent upon us to be a supplier to the government. And needless to say as the cash flow materializes, that's going to present new opportunities for us. We intend to take advantage of that.

Our next question is a follow-up from Greg Wade of Wedbush.

So Dan, looks like you're shipping into the SNS about 190,000 courses per month. Can you just remind us what your original guidance is with respect to the time course across which you thought it would take the company to fulfill this first 2 million course component of the deal? And then if you are able to ship in at this rate, is there a chance that you'll be done early?

All right. So the original guidance was that once we start delivering, we will fulfill the full 2 million within 2 years. That guidance still holds. We are -- we definitely are incentivized and focused on doing things as quickly as possible and driving growth in the company. And so we said within 2 years, it could be faster. But the fact that as you sort of extrapolate and, say, "Well, it looks like it's once every month." That will not be every month delivery. There is a little bit of choppiness in the short term. In the long term, it averages out probably to something once every 6 to 10 weeks, depending on the fact and circumstances. So we're going to have months when there are no deliveries. We could even have 2 months. But then there is going to be a lot. So it all sort of averages out. And when you look at it that way, it works out to -- within 2 years with an opportunity to be a little bit quicker.

Okay, great. And it's mostly the supply side as opposed to the receive side that results in this choppiness?

Yes. It's the way the contract is oriented that is we have the batch and we can't just deliver every week. But we have a lot of freedom on the delivery side and our partners encourage us to be efficient. And so yes, I think you're correct in that we do have a whole supply chain that we have to manage.

And at this time, I'm not showing any further questions, so I'd like to turn the call back to management for any closing comments.

Again, let me thank you for joining us. We are well into the transition from being an R&D stage company to a commercial stage company. We've completed delivery of almost 200,000 courses of our drug, expect 2 more shipments before the end of this quarter of comparable size. We expect to reach the threshold for us to start getting paid cumulatively for those deliveries, and we believe that this all will add up to considerable benefit from our shareholder base as we complete this transition to a commercial stage company. Again, thanks for joining us. I'm going to turn the call back to Todd Fromer.

Thank you. As a reminder, this call included certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including statements regarding the efficacy or potential of products, the time line for bringing such products to market and the continued development and possible eventual approval for such products. Forward-looking statements are based on management's estimates, assumptions and projections and are subject to uncertainties, many of which are beyond SIGA's control. Actual results may differ materially from those anticipated in any forward-looking statements. Factors that may cause such differences include the risk that potential products that appear promising to SIGA or its collaborators cannot be shown to be efficacious or safe in subsequent preclinical or clinical trials; SIGA or its collaborators will not obtain appropriate or necessary government approvals to market, medias or other potential products; SIGA may not be able to obtain anticipated funding for its development projects or other needed funding; SIGA may not be able to secure funding from anticipated government contracts and grants; SIGA may not be able to secure or enforce sufficient legal rights in its products, including patent protection for its products. Any challenge for SIGA's patents and other proprietary rights, as is adversely determined, could affect its business and even if determined favorably, could be costly. Regulatory requirements applicable to SIGA's products may result in the need for further or additional testing or documentation that will delay or prevent seeking or obtaining needed approvals to market these products. The U.S. Biomedical Advanced Research and Development Authority may not complete the procurement set forth in its solicitation for the acquisition of the smallpox antiviral for the Strategic National Stockpile or may complete it on different terms. Any contractual award we may receive to supply a smallpox antiviral may be subject to one or more protests, which may cause contract awards to be delayed or denied. The volatility and competitive nature of the biotechnology industry may hamper SIGA's efforts. Changes in domestic and foreign economic marketing conditions may adversely affect SIGA's ability to advance its research or its products and the effect of federal, state and foreign regulation on SIGA's businesses. More detailed information about SIGA and risk factors that may affect the realization of forward-looking statements, including the forward-looking statements in this conference call is set forth in SIGA's filings with the Securities and Exchange Commission, including SIGA's annual report on Form 10-K for the fiscal year ended December 31, 2012, and in other documents that SIGA has filed with the commission. SIGA urges investors and security holders to read these documents free of charge at the commission's website at www.sec.gov. Interested parties may also obtain these documents free of charge from SIGA. Forward-looking statements speak only to the date they are made, and except for any obligation under the U.S. federal securities laws, SIGA undertakes no obligation to publicly update any forward-looking statements as a result of new information, future events or otherwise. Thank you, everyone. Operator?