We are subject to legal proceedings and claims that arise in the ordinary course of business.

 

 

On Sinotau filed a suit for damages, specific performance, and injunctive relief against the Company in the U.S. District Court for the District of Massachusetts alleging breach of a letter of intent for licensing to Sinotau of the Company’s product candidate and technology. In the Court denied the Company’s motion to dismiss. The Company filed its answer to the complaint and the parties have filed multiple joint motions to stay the case pending settlement discussion, which to date have been granted.

 

In the Company executed a letter of intent with Sinotau and Cerveau Technologies, Inc. (“Cerveau”), outlining a plan to sublicense to Cerveau the worldwide rights to conduct research using as well as grant to Cerveau an exclusive license for the development, marketing and commercialization of in Australia, Canada, China and Singapore. The letter of intent included a provision stating that Sinotau will release all claims in the Sinotau Litigation upon the parties’ execution of a definitive agreement; the commercial rights agreement contemplated by the letter of intent would also include a release of such claims and a covenant to sue on such claims.

 

In the Company executed an agreement to provide Meilleur Technologies, Inc., (“Meilleur”), a wholly-owned subsidiary of Cerveau, worldwide rights to conduct research using as well as an exclusive license for the development and commercialization of in Australia, Canada, China, and Singapore. Meilleur also has an option to commercialize worldwide. As a result of the agreement, Navidea expects that the litigation initiated by Sinotau will be dismissed.

 

 

As disclosed in the Company’s Annual Report on Form -K and other filings, the Company has been engaged in ongoing litigation with CRG, in its capacity as a lender and as control agent for other affiliated lenders party to the CRG Loan Agreement, in the Texas Court relating to CRG’s claims of default under the terms the CRG Loan Agreement. Following a trial in the Texas Court ruled that the Company’s total obligation to CRG is in excess of million, limited to million under the parties’ Global Settlement Agreement reached in The Texas Court acknowledged only the million payment made in concluding that the Company owed CRG another million, however the Texas Court did expressly take the Company’s payment of million into account and awarded, as part of the million, amounts that had already been paid as part of the million. 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 double recovery created by the million award without taking into account the million payment in requesting that the judgment be modified to set the supersedeas amount at million so that the Company could 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. On the Texas Court ordered the Company to put up a supersedeas bond in the amount of  million. The Company filed for an emergency stay of the order in the appellate court in Harris County. On the appellate court denied the Company’s emergency stay motion. The Company continues to believe that the million paid to CRG in should be credited as payment toward the million total, and the Company intends to further contest the matter through the appellate court in Texas.

 

On CRG drew approximately million on the letter of credit. This was in addition to the million and the million that Navidea had previously paid to CRG.

 

On Navidea filed suit in the Ohio Court against the Lenders.  The suit asserts that the Lenders fraudulently induced Navidea to enter into a settlement agreement and breached the terms of the same through certain actions taken by the Lenders in connection with the Global Settlement Agreement reached in pursuant to which Navidea agreed to pay up to million to Lenders, as well as through actions and misrepresentations by CRG after the Global Settlement Agreement was executed.  The suit also asserts claims for conversion and unjust enrichment against the Lenders for their collection of more than million, the maximum permitted under the Global Settlement Agreement, and their double recovery of amounts paid as part of the million paid in and recovered again as part of the million. CRG’s double recovery and recovery of more than million are due to CRG drawing the entire million on the Cardinal Health letter of credit. To date, answer or other response or motion has been filed by the Lenders to Navidea’s complaint.

 

In a related proceeding before the Ohio Court, initially filed in and under which the Global Settlement Agreement was reached in the Ohio Court has issued preliminary findings that the settlement gave rise to a million cap on amounts owed to Lenders by Navidea and that Navidea might have been properly credited for certain funds in excess of million previously swept by Lenders from a bank account owned by Navidea.  The Ohio Court also made a preliminary ruling that it possessed jurisdiction to interpret the settlement agreement at issue. The Company intends to pursue recovery of the million, and other damages, in the Ohio Court.

 

On CRG filed a new suit against the Company in the Texas Court. This new suit seeks a declaratory judgment that CRG did breach the Global Settlement Agreement by drawing approximately million on the Cardinal Health letter of credit. On CRG moved the Texas Court to issue an anti-suit injunction barring the Company from litigating in the Ohio Court. The Texas Court denied that motion on CRG served the Company with the new Texas suit on and the Company’s answer is due on The Company intends to contest this issue in the Ohio Court, the Texas Court, and on appeal in Texas. See Notes and (b).

 

 

On Navidea filed suit against Sinotau in the U.S. District Court for the Southern District of Ohio. The Company's complaint included claims seeking a declaration of the rights and obligations of the parties to an agreement regarding rights for the tilmanocept product in China and other claims. The complaint sought a temporary restraining order (“TRO”) and preliminary injunction to prevent Sinotau from interfering with the Company’s Asset Sale to Cardinal Health On the Court granted the TRO and extended it until The Asset Sale closed on On the Court dissolved the TRO as moot. Sinotau also filed a suit against the Company and Cardinal Health in the U.S. District Court for the District of Delaware on On the District of Delaware case was transferred to the Southern District of Ohio. On the Ohio Court determined that both cases in the Southern District of Ohio are related and the case was stayed for days pending settlement discussions. On Navidea and Sinotau executed an amendment to the agreement, modifying certain terms of the agreement and effectively resolving the legal dispute. On Navidea and Sinotau executed a Settlement Agreement and Mutual Release, and on Navidea and Sinotau voluntarily dismissed their legal cases.

 

 

On Platinum-Montaur commenced an action against the Company in the Supreme Court of the State of New York, County of New York, seeking damages of approximately million purportedly due as of plus interest accruing thereafter. 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 was due on The Company filed its motion to dismiss in advance of the filing deadline. A settlement conference was held on and attended by a representative of Navidea and counsel, Dr. Goldberg and counsel, and counsel for PPVA and PPCO.  PPCO requested participation in the conference due to certain recent issues that have arisen concerning potential liability of PPCO to Navidea under the release and indemnification provisions of the payoff letter issued by PPCO in connection with the payment PPCO has received under the Platinum Loan Agreement.  The settlement conference resulted in agreement. Because the funds sought by Platinum-Montaur are subject to claims of competing ownership, the Company intends to continue to defend itself in the action.

 

In accordance with ASC Topic , we make a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Although the outcome of any litigation is uncertain, in our opinion, the amount of ultimate liability, if any, with respect to these actions, other than the CRG litigation for which we have accrued a contingent liability, will materially affect our financial position.