Our consolidated financial statements include the accounts of Navidea and our wholly owned subsidiaries, Navidea Biopharmaceuticals Limited and Cardiosonix Ltd, as well as those of our majority-owned subsidiary, Macrophage Therapeutics, Inc. (“MT”). All significant inter-company accounts were eliminated in consolidation. Cardiosonix was legally dissolved in

 

On pursuant to an Asset Purchase Agreement dated the “Purchase Agreement”), the Company completed its previously announced sale to Cardinal Health LLC (“Cardinal Health ) of its assets used, held for use, or intended to be used in operating its business of developing, manufacturing and commercializing a product used for lymphatic mapping, lymph node biopsy, and the diagnosis of metastatic spread to lymph nodes for staging of cancer (the “Business”), including the Company’s radioactive diagnostic agent marketed under the Lymphoseek trademark for current approved indications by the U.S. Food and Drug Administration (“FDA”) and similar indications approved by the FDA in the future (the “Product”), in Canada, Mexico and the United States (the “Territory”) (giving effect to a License-Back Agreement and excluding certain assets specifically retained by the Company) (the “Asset Sale”). Such assets sold in the Asset Sale consist primarily of, without limitation, (i) intellectual property used in or reasonably necessary for the conduct of the Business, (ii) inventory of, and customer, distribution, and product manufacturing agreements related to, the Business, (iii) all product registrations related to the Product, including the new drug application approved by the FDA for the Product and all regulatory submissions in the United States that have been made with respect to the Product and all Health Canada regulatory submissions and, in each case, all files and records related thereto, (iv) all related clinical trials and clinical trial authorizations and all files and records related thereto, and (v) all rights, title and interest in and to the Product, as specified in the Purchase Agreement (the “Acquired Assets”).

 

Upon closing of the Asset Sale, the Supply and Distribution Agreement dated as amended, between Cardinal Health and the Company was terminated and, as a result, the provisions thereof are of further force or effect (other than any indemnification, payment, notification or data sharing obligations which survive the termination).

 

Our consolidated balance sheets and statements of operations have been reclassified, as required, for all periods presented to reflect the Business as a discontinued operation. Cash flows associated with the operation of the Business have been combined with operating, investing and financing cash flows, as appropriate, in our consolidated statements of cash flows. See Note

 

Certain prior period amounts also have been reclassified to conform with the current year’s presentation, including the adoption of Accounting Standards Update (“ASU”) - and cash flows related to loss on extinguishment of debt.

 

 

– Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

 

– Quoted prices in markets that are active or financial instruments for which all significant inputs are observable, either directly or indirectly; and

 

– Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

 

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. In determining the appropriate levels, we perform a detailed analysis of the assets and liabilities whose fair value is measured on a recurring basis. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments which trade infrequently and therefore have little or price transparency are classified as Level See Note

 

The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

 

 

 

 

 

 

We also earn revenues related to our licensing and distribution agreements. The consideration we are eligible to receive under our licensing and distribution agreements typically includes upfront payments, reimbursement for research and development costs, milestone payments, and royalties. Each licensing and distribution agreement is unique and requires separate assessment in accordance with current accounting standards. See Note

 

 

In the FASB issued ASU - .  ASU - does change the core principle of the guidance, rather it clarifies the implementation guidance on principal versus agent considerations.  ASU - clarifies the guidance in ASU - , which is yet effective.  The effective date and transition requirements for ASU - are the same as for ASU - which was deferred by year by ASU - .  Public business entities should adopt the new revenue recognition standard for annual reporting periods beginning after including interim periods within that year.  Early adoption is permitted only as of annual reporting periods beginning after including interim periods within that year.

 

In the FASB issued ASU - .  ASU - does change the core principle of the guidance, rather it clarifies the identification of performance obligations and the licensing implementation guidance, while retaining the related principles for those areas.  ASU - clarifies the guidance in ASU - , which is yet effective.  The effective date and transition requirements for ASU - are the same as for ASU - which was deferred by year by ASU - .  Public business entities should adopt the new revenue recognition standard for annual reporting periods beginning after including interim periods within that year.  Early adoption is permitted only as of annual reporting periods beginning after including interim periods within that year.

 

In the FASB issued ASU - . ASU - does change the core principle of the guidance, rather it affects only certain narrow aspects of Topic including assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. ASU - affects the guidance in ASU - , which is yet effective. The effective date and transition requirements for ASU - are the same as for ASU - which was deferred by year by ASU - . Public business entities should adopt the new revenue recognition standard for annual reporting periods beginning after including interim periods within that year. Early adoption is permitted only as of annual reporting periods beginning after including interim periods within that year.

 

In the FASB issued ASU - . ASU - does change the core principle of the guidance, rather it affects only certain narrow aspects of Topic including loan guarantee fees, contract cost impairment testing, provisions for losses on construction- and production-type contracts, clarification of the scope of Topic disclosure of remaining and prior-period performance obligations, contract modification, contract asset presentation, refund liability, advertising costs, fixed-odds wagering contracts in the casino industry, and cost capitalization for advisors to private and public funds. ASU - affects the guidance in ASU - , which is yet effective. The effective date and transition requirements for ASU - are the same as for ASU - which was deferred by year by ASU - . Public business entities should adopt the new revenue recognition standard for annual reporting periods beginning after including interim periods within that year. Early adoption is permitted only as of annual reporting periods beginning after including interim periods within that year.

 

We adopted ASU - along with additional related ASUs - - - and - effective using the modified retrospective method of adoption. The adoption of ASU - and related ASUs resulted in increases in deferred revenue and accumulated deficit of See Note

 

In the FASB issued ASU - . ASU - requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash or equivalents. Therefore, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU - is effective for public business entities for fiscal years beginning after and interim periods within those fiscal years. Early adoption in permitted, including adoption in an interim period. If an entity early adopts ASU - in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. We adopted ASU - effective The adoption of ASU - resulted in reclassification of million of restricted cash in the consolidated statement of cash flows for the -month period ended

 

In the FASB issued ASU -  ASU - amends Accounting Standards Codification (“ASC”) Topic to provide guidance on accounting for the tax effects of the Tax Cuts and Jobs Act (the “Tax Act”) pursuant to Staff Accounting Bulletin  ASU - addresses situations where the accounting under ASC Topic is incomplete for certain income tax effects of the Tax Act upon issuance of the entity’s financial statements for the reporting period in which the Tax Act was enacted.  The adoption of ASU - in did have a material effect on our consolidated financial statements.