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 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 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, the litigation initiated by Sinotau was dismissed in

 

 

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 was 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. The Company filed its initial brief on the merits in this appeal on with CRG filing its response on Navidea’s final reply brief is due on The Company does expect a ruling on this appeal until at the earliest.

 

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. On Navidea filed an amended complaint asserting additional claims, including claims for breach of confidentiality by CRG, and on CRG filed a motion seeking to dismiss the amended complaint. On the Court entered an Order granting in part and overruling in part CRG’s Motion to Dismiss.  While several of the Company’s claims were dismissed, the core of the Complaint, relating to the claimed overpayment to CRG was permitted to proceed.  On CRG filed a Petition with the Ohio Supreme Court seeking a Writ of Prohibition against the Trial court and asserting that the Trial Court’s denial in part of CRG’s Motion to Dismiss was improper.  The Petition has been fully briefed and a decision is expected in the near future.  At the Trial Court level, discovery is ongoing in the case and it is anticipated that the Company will file a Motion for Summary Judgment sometime in

 

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 is pursuing 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 The Company moved to dismiss these claims pursuant to the Texas Citizens Participation Act. On the Texas Court denied the Company’s Motion to Dismiss.  That same day, the Company took an immediate appeal of its claims under the Texas Citizens Participation Act to the Fourteenth Court of Appeals of Texas.  The Company filed its initial brief on the merits in this appeal on with CRG’s response due on The Company does expect a ruling on this appeal until at the earliest.

 

On CRG filed a amended petition in the new suit. This amended petition includes the prior request for declaratory judgment that CRG did breach the Global Settlement Agreement. In addition, the amended petition asserts a claim against Navidea for breach of contract. CRG alleges that Navidea breached the Global Settlement Agreement and its duty of good faith and fair dealing by seeking reconsideration in the original Texas suit, appealing the original Texas suit, and filing the Ohio suit. The Company is contesting this issue in the Ohio Court, the Texas Court, and on appeal in Texas. See Notes and

 

 

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 were 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 Court for the Southern District of New York on An initial pretrial conference was held on 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.  On the Court granted judgment for Navidea and dismissed all claims in the case.  The Court stated that Platinum-Montaur had standing to assert any contractual interest in funds that might be due under the Platinum Loan Agreement.  The Court also disagreed with Platinum-Montaur’s claim of unjust enrichment on similar grounds and found that Platinum-Montaur lacked any sufficient personal stake to maintain claims against Navidea.  The claims against Navidea were dismissed without prejudice on the grounds of lack of standing to pursue the claims asserted.

 

 

Effective Dr. Michael Goldberg resigned as the Chief Executive Officer and President, and from the Board of Directors, of the Company.  In connection with Dr. Goldberg’s resignation, Navidea and Dr. Goldberg entered into a binding Agreement, with the intent of entering into or more additional Definitive Agreements, which set forth the terms of the separation from service.  The Agreement provides that Dr. Goldberg will be entitled to receive a severance of payable in equal installments over years, along with a -time payment of approximately which represents the cost of continuing his existing health care coverage for a period of months.  The Agreement also provides that Dr. Goldberg will be entitled to million shares of common stock of Navidea, representing in part payment of accrued bonuses and payment of the balance of the Platinum Note.  A portion of the million shares to be issued to Dr. Goldberg will be held in escrow for up to months in order to reimburse Navidea in the event that Navidea is obligated to pay any portion of the Platinum Note to a party other than Dr. Goldberg.  Further, the Agreement provides that the Company’s subsidiary, MT, will redeem all of Dr. Goldberg’s preferred stock and issue to Dr. Goldberg super voting common stock equal to of the outstanding shares of MT.

 

As of the date of filing this Quarterly Report on Form -Q, the Definitive Agreements have yet been signed as negotiations are ongoing and the terms are subject to change.  Any issuance of shares to Dr. Goldberg will be subject to NYSE American regulations.  of the million shares of Navidea common stock have been issued, nor have the MT preferred shares been exchanged for MT super voting common stock.

 

 

On the Company received a notification (the “Deficiency Letter”) from the NYSE American stating that Navidea was in compliance with certain NYSE American continued listing standards relating to stockholders’ equity. Specifically, the Deficiency Letter stated that Navidea is in compliance with Section (a)(ii) of the NYSE American Company Guide, which requires an issuer to have stockholders’ equity of million or more if it has reported losses from continuing operations and/or net losses in of its most recent fiscal years. The Deficiency Letter noted that Navidea had stockholders’ equity of million as of and has reported net losses in of its most recent fiscal years ended

 

Navidea was required to submit a plan to the NYSE American by advising of actions it has taken or will take to regain compliance with the continued listing standards by Navidea submitted a plan by the deadline.

 

On the Company received a notification (the “Acceptance Letter”) from the NYSE American that the Company’s plan to regain compliance was accepted. The Acceptance Letter also stated that the NYSE American had inadvertently omitted an additional deficiency from the Deficiency Letter. Specifically, the Deficiency Letter should have stated that Navidea is in compliance with Section (a)(iii) of the NYSE American Company Guide, which requires an issuer to have stockholders’ equity of million or more if it has reported losses from continuing operations and/or net losses in its most recent fiscal years. The Acceptance Letter noted that Navidea had stockholders’ equity of million as of and has reported losses from continuing operations and/or net losses in its most recent fiscal years ended

 

The Company must provide quarterly updates to the NYSE American staff (the “Staff”) concurrent with its interim/annual SEC filings. If Navidea fails to regain compliance with the stockholders’ equity standards by the NYSE American commence delisting procedures.

 

In addition, the Deficiency Letter stated that the Staff determined that the Company’s securities have been selling for a low price per share for a substantial period of time and, pursuant to Section (f)(v) of the NYSE American Company Guide, Navidea’s continued listing is predicated on it effecting a reverse stock split of its common stock, par value per share (“Common Stock”) or otherwise demonstrating sustained price improvement within a reasonable period of time, which the Staff has determined to be later than Navidea must regain compliance with the price standard by that date in order to be considered for continued trading through the end of

 

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, will materially affect our financial position.