In MT, our previously wholly-owned subsidiary, entered into a Securities Purchase Agreement to sell up to shares of its Series A Convertible Preferred Stock (“MT Preferred Stock”) and warrants to purchase up to shares of MT Common Stock to the MT Investors for a purchase price of per unit. A unit consists of share of MT Preferred Stock and warrants to purchase MT Common Stock. Under the agreement, of the MT Preferred Stock and warrants are committed to be purchased by Dr. Goldberg, and the balance by Platinum. The full shares of MT Preferred Stock and warrants that be sold under the agreement are convertible into, and exercisable for, MT Common Stock representing an aggregate interest on a fully converted and exercised basis. Navidea owns the remainder of the MT Common Stock. On definitive agreements with the MT Investors were signed for the sale of the tranche of shares of MT Preferred Stock and warrants to purchase shares of MT Common Stock to the MT Investors, with gross proceeds to MT of The MT Common Stock held by parties other than Navidea is reflected on the consolidated balance sheets as a noncontrolling interest.

 

The warrants have certain characteristics including a net settlement provision that require the warrants to be accounted for as a derivative liability at fair value, with subsequent changes in fair value included in earnings. The fair value of the warrants was estimated to be at issuance and at and See Notes (m) and In addition, certain provisions of the Securities Purchase Agreement obligate the MT Investors to acquire the remaining MT Preferred Stock and related warrants for million at the option of MT. The estimated relative fair value of this put option was at issuance based on the Black-Scholes option pricing model and is classified within stockholders' equity.

 

In addition, we entered into a Securities Exchange Agreement with the MT Investors providing them an option to exchange their MT Preferred Stock for our common stock in the event that MT has completed a public offering with gross proceeds to MT of at least million by the anniversary of the closing of the initial sale of MT Preferred Stock, at an exchange rate per share obtained by dividing by the greater of (i) of the -day volume weighted average price per share of our common stock on the anniversary of the initial closing or (ii) To the extent that the MT Investors do timely exercise their exchange right, MT has the right to redeem their MT Preferred Stock for a price equal to per share. We also granted MT an exclusive sublicense for certain therapeutic applications of the Manocept technology.

 

In and Platinum contributed a total of to MT. MT was obligated to provide anything in return, although it was considered likely that the MT Board would ultimately authorize some form of compensation to Platinum. The Company initially recorded the entire as a current liability pending determination of the form of compensation.

 

In MT’s Board of Directors authorized modification of the original investments of by Platinum and by Dr. Goldberg to a convertible preferred stock with a PIK coupon retroactive to the time the initial investments were made. The conversion price of the preferred will remain at the million initial market cap but a full ratchet was added to enable the adjustment of conversion price, warrant number and exercise price based on the valuation of the institutional investment round. In addition, the MT Board authorized issuance of additional convertible preferred stock with the same terms to Platinum as compensation for the additional of investments made in and Based on the MT Board’s authorization of additional equity, the Company reclassified the additional from a current liability to equity during the year ended As of the date of filing of this Form -K, final documents related to the above transactions authorized by the MT Board have been completed.

 

In the Company entered into the Agreement with Dr. Michael Goldberg related to his resignation from his positions as an executive officer and a director of Navidea.  Among other things, the Agreement provided that Dr. Goldberg would become Chief Executive Officer of MT, and that MT would redeem all of Dr. Goldberg’s MT preferred stock and issue to Dr. Goldberg MT super voting common stock equal to of the outstanding shares of MT, subject to execution of Definitive Agreements.  As of the date of filing of this Annual Report on Form -K, the Definitive Agreements have yet been signed.

 

On Dr. Goldberg represented to the MT Board that he had, without MT Board or shareholder approval, created a subsidiary of MT, transferred all of the assets of MT into the subsidiary, and then issued himself stock in the subsidiary. On Navidea notified MT that it was terminating the sublicense effective because MT became insolvent in violation of the sublicense agreement. On the Board of Directors of MT removed Dr. Goldberg as President and Chief Executive Officer of MT and from any other office of MT to which he have been appointed or in which he was serving. Dr. Goldberg remains a member of the MT Board, together with Michael Rice and Dr. Claudine Bruck. Mr. Rice and Dr. Bruck remain members of the board of directors of Navidea. The MT Board then appointed Mr. Latkin to serve as President and Chief Executive Officer of MT.

 

On Navidea filed a complaint against Dr. Goldberg in the United States District Court for the Southern District of New York, alleging breach of the Agreement, as well as a breach of the covenant of good faith and fair dealing and to obtain a declaratory judgment that Navidea’s performance under the Agreement is excused and that Navidea is entitled to terminate the Agreement as a result of Dr. Goldberg’s actions.  Also on MT initiated a suit against Dr. Goldberg in the Court of Chancery of the State of Delaware, alleging, among other things, breach of fiduciary duty as a director and officer of MT and conversion, and to obtain a declaratory judgment that the transactions Dr. Goldberg caused MT to enter into are void.  On the Court of Chancery entered an order maintaining status quo, which provided, among other things, that MT’s board of directors authorize any act or transaction on behalf of the Company, and that without prior written authorization of the MT board, Dr. Goldberg shall hold himself out as CEO of MT or purport to act or authorize any action on behalf of MT except as authorized by the MT board.

 

On Dr. Goldberg filed a complaint against Navidea and MT in the United States District Court for the Southern District of New York. The Complaint alleges a breach of contract claim against both Navidea and MT for failure to pay to Dr. Goldberg funds allegedly due to him under the Platinum Note. The Complaint further alleges a breach of contract claim against Navidea due to Navidea’s failure to issue million shares to Dr. Goldberg, to issue MT Super Voting Common Stock, by removing Dr. Greene from the MT Board of Directors, by appointing Mr. Rice and Dr. Bruck to the MT Board of Directors, and by terminating Dr. Goldberg as CEO of MT. See Note