414

March 2017,

ll of our material assets were pledged as collateral for our borrowings under the CRG Loan Agreement. In addition to the security interest in our assets, the CRG Loan Agreement included covenants that imposed significant requirements on us. An event of default would have entitled CRG to accelerate the maturity of our indebtedness, increase the interest rate from to the default rate of per annum, and invoke other remedies available to it under the loan agreement and the related security agreement. During the course of CRG alleged multiple claims of default on the CRG Loan Agreement, and filed suit in the District Court of Harris County, Texas (the “Texas Court”). On CRG exercised control over of the Company’s primary bank accounts and took possession of million that was on deposit. Multiple motions, actions and hearings followed over the remainder of and into

March 3, 2017,

414

February 22, 2017.

March 3, 2017,

the million Deposit Amount of its alleged indebtedness and other obligations outstanding under the CRG Term Loan. Concurrently with payment of the Deposit Amount, CRG released all liens and security interests granted under the CRG Loan Documents and the CRG Loan Documents were terminated and are of further force or effect; provided, however, that, notwithstanding the foregoing, the Company and CRG agreed to continue with their proceeding pending in the Texas Court to fully and finally determine the Final Payoff Amount. The Company and CRG further agreed that the Final Payoff Amount would be less than million and more than million. In addition, concurrently with the payment of the Deposit Amount and closing of the Asset Sale, (i) Cardinal Health agreed to post a million letter of credit in favor of CRG (at the Company’s cost and expense to be deducted from the closing proceeds due to the Company, and subject to Cardinal Health indemnification rights under the Purchase Agreement) as security for the amount by which the High Payoff Amount exceeds the Deposit Amount in the event the Company is unable to pay all or a portion of such amount, and (ii) CRG agreed to post a million letter of credit in favor of the Company as security for the amount by which the Deposit Amount exceeds the Low Payoff Amount. If, on the hand, it is finally determined by the Texas Court that the amount the Company owes to CRG under the Loan Documents exceeds the Deposit Amount, the Company will pay such excess amount, plus the costs incurred by CRG in obtaining CRG’s letter of credit, to CRG and if, on the other hand, it is finally determined by the Texas Court that the amount the Company owes to CRG under the Loan Documents is less than the Deposit Amount, CRG will pay such difference to the Company and reimburse Cardinal Health for the costs incurred by Cardinal Health in obtaining its letter of credit. Any payments owing to CRG arising from a final determination that the Final Payoff Amount is in excess of million shall be paid by the Company without resort to the letter of credit posted by Cardinal Health and such letter of credit shall only be a secondary resource in the event of failure of the Company to make payment to CRG. The Company will indemnify Cardinal Health for any costs it incurs in payment to CRG under the settlement, and the Company and Cardinal Health further agree that Cardinal Health can pursue all possible remedies, including offset against earnout payments (guaranteed or otherwise) under the Purchase Agreement, warrant exercise, or any other payments owed by Cardinal Health or any of its affiliates, to the Company, or any of its affiliates, if Cardinal Health incurs any cost associated with payment to CRG under the settlement. The million being held in escrow pursuant to court order in the Ohio case and the million being held in escrow pursuant to court order in the Texas case were released to the Company at closing of the Asset Sale. On Cardinal Health posted a million letter of credit, and on CRG posted a million letter of credit, each as required by the Global Settlement Agreement.

December 2017.

  The Texas Court ruled that the Company’s total obligation to CRG is in excess of million, limited to million under the Global Settlement Agreement.  The Texas Court acknowledged only the million payment made in concluding that the Company owes CRG another million, however the Texas Court did expressly take the Company’s payment of million into account.  The Company believes that this million should be credited against the million; CRG disagrees.  On the Company filed an emergency motion to set supersedeas bond and to modify judgment, describing the Texas Court’s oversight of explaining how to apply the million payment, requesting that the judgment be modified to set the supersedeas amount at million so that the Company can stay enforcement of the judgment pending appeal.  The Texas Court refused to rule on this motion, and the court of appeals entered an order compelling the Texas Court to set a supersedeas amount.  The Texas Court has scheduled a hearing on the issue for however it has yet set the amount, and enforcement of the judgment is stayed until days after the Texas Court does so.  We currently await further action by the Texas Court.  If we are ultimately required to pay an additional million to CRG, such payment would have a significant adverse effect on our financial position and would likely force us to curtail our planned development activities.  See Note

414,

$7.7

’s liabilities, obligations and indebtedness under the Platinum Loan Agreement between the Company and Platinum-Montaur, which were transferred by Platinum-Montaur to PPCO.  The Company was informed by PPVA that it was the owner of additional amounts owed on the Platinum-Montaur loan.  PPVA claims a balance of approximately million was due upon closing of the Asset Sale.  That amount is also subject to competing claims of ownership by Dr. Michael Goldberg, the Company’s President and Chief Executive Officer.  The Company has yet paid the balance to anyone, as ownership is subject to dispute.

March 2, 2017,

  In the Payoff Letter, PPCO defined “Indebtedness” to include all amounts due under the Platinum Note, indicated that upon payment of the Payoff Amount, all “Indebtedness owed to Lender” shall have been satisfied in full, and that the “Loan Documents,” which included the Platinum Loan Agreement and the Platinum Note, “shall terminate and have further force or effect.”  The letter also confirmed that as of the date that payment was made by Navidea, the Receiver was providing a release and indemnification in favor of Navidea based on any claims made by any affiliate of PPCO.  The Payoff Amount was paid pursuant to the Payoff Letter.  The remaining balance of the Platinum Note would have matured under its terms in however the Company has paid the balance as it is still subject to ongoing competing claims of ownership.  The Company intends to pay the balance of the debt if it is determined to be due and owing to PPVA or Dr. Goldberg.

November 2, 2017,

$1,914,827.22

March 3, 2017,

  The claims asserted are for breach of contract and unjust enrichment in connection with funds received by the Company under the Platinum Loan Agreement.  Said action was removed to the United States District of New York on An initial pretrial conference was held on At the conference the Court stayed the deadline for the Company to answer or otherwise respond to the complaint.  The Court also directed the parties to engage in informal jurisdictional discovery and a follow up status conference was held on during which the Court set a briefing schedule and determined that Navidea’s motion to dismiss is due on The Court also referred the case to a settlement conference, which has been scheduled for Because the funds sought by Platinum-Montaur are subject to claims of competing ownership, the Company intends to defend itself in the action and seek a determination as to whether any funds are due and owing to the plaintiff.

414

’s financial position and ability to continue as a going concern was alleviated.  Based on our current working capital and our projected cash burn, including our belief that the Company will be obligated to pay up to an additional million to CRG, management believes that the Company will be able to continue as a going concern for at least months following the issuance of this Annual Report on Form -K.  Our projected cash burn also factors in certain cost cutting initiatives that have been implemented and approved by the board of directors, including reductions in the workforce and a reduction in facilities expenses.  Additionally, we have considerable discretion over the extent of development project expenditures and have the ability to curtail the related cash flows as needed.  The Company also has funds remaining under outstanding grant awards, and continues working to establish new sources of non-dilutive funding, including collaborations and additional grant funding that can augment the balance sheet as the Company works to reduce spending to levels that can be supported by our revenues.  We believe all of these factors are sufficient to alleviate substantial doubt about the Company’s ability to continue as a going concern.