Effective May 31, 2016, Navidea terminated its joint venture with R-NAV.  Under the terms of the agreement, Navidea (1) transferred all of its shares of R-NAV, consisting of 1,500,000 Series A Preferred Units and 3,500,000 Common Units, to R-NAV; and (2) paid $110,000 in cash to R-NAV.  In exchange, R-NAV (1) transferred all of its shares of TcRA Imaging, Inc. (TcRA) to Navidea, thereby returning the technology licensed to TcRA to Navidea; and (2) forgave the $333,333 remaining on the promissory note.  Neither Navidea nor R-NAV has any further obligations of any kind to either party.  As a result of this transaction, the Company recognized a loss on disposal of the investment in R-NAV of $39,732 during the second quarter of 2016.

Navidea’s investment in R-NAV was being accounted for using the equity method of accounting.  Navidea’s equity in the loss of R-NAV was $15,159 and $268,432, respectively, for the nine-month periods ended September 30, 2016 and 2015.  Navidea’s equity in the loss of R-NAV exceeded our initial investment in R-NAV.  As such, the carrying value of the Company’s investment in R-NAV was $0 as of the date of termination.

The Company’s obligation to provide $500,000 of in-kind services to R-NAV was being recognized as those services were provided.  The Company provided $15,000 and $27,000, respectively, of in-kind services during the nine-month periods ended September 30, 2016 and 2015.  As of the date of termination, the Company had $383,000 of in-kind services remaining to provide under this obligation.  This obligation ceased on May 31, 2016 under the terms of the agreement.

Navidea provided additional services to R-NAV in support of its development activities.  Such services were immaterial to Navidea’s overall operations.