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

 

 

Prior to the Asset Sale to Cardinal Health in all 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. 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

 

On the Company entered into a Global Settlement Agreement with MT, CRG, and Cardinal Health to effectuate the terms of the settlement previously entered into by the parties on In accordance with the Global Settlement Agreement, on the Company repaid the million Deposit Amount of its 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. In accordance with the Global Settlement Agreement, on the Company repaid million of its indebtedness and other obligations outstanding under the CRG Term Loan. Also 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.

 

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 Global Settlement Agreement. 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 intends to further contest the matter through the appellate court in Texas. The Company’s appeal on the merits is now fully briefed, and the Company expects a ruling on the merits appeal at some point in CRG has repeatedly filed motions seeking to have the Texas Court grant an anti-suit injunction which would purportedly restrict Navidea’s ability to proceed with litigation in Ohio. All of these motions have been denied either by the Texas Court or by the appellate court in Texas. The last such motion was denied on The case is fully briefed and awaiting a ruling. The Company expects a ruling sometime in

 

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 Ohio 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 Ohio Court’s denial in part of CRG’s Motion to Dismiss was improper.  The Trial Court filed a motion to dismiss the writ of prohibition and the Company, after intervening in the writ of prohibition action, moved for judgment on the pleadings. Following that, proceedings have resumed in front of the Trial Court.  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 in the case filed and referenced above.

 

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 appeal of the denial of the Company’s motion to dismiss CRG’s complaint under the Texas Citizens Participation Act is now fully briefed and awaiting a ruling. The Company expects a ruling sometime in

 

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 Note

 

 

On the Company received a demand for arbitration through the American Arbitration Association, Columbus, Ohio, from Ricardo J. Gonzalez, the Company’s then Chief Executive Officer, claiming that he was terminated without cause and, alternatively, that he resigned in accordance with Section of his Employment Agreement pursuant to a notice received by the Company on On the Company notified Mr. Gonzalez that his failure to undertake responsibilities assigned to him by the Board of Directors and otherwise work after being ordered to do so on multiple occasions constituted an effective resignation, and the Company accepted that resignation. The Company rejected the resignation of Mr. Gonzalez pursuant to certain provisions in Section of his Employment Agreement. Also, the Company notified Mr. Gonzalez that, alternatively, his failure to return to work after the expiration of the cure period provided in his Employment Agreement constituted cause for his termination under his Employment Agreement. Mr. Gonzalez was seeking severance and other amounts claimed to be owed to him under his Employment Agreement. In response, the Company filed counterclaims against Mr. Gonzalez alleging malfeasance by Mr. Gonzalez in his role as Chief Executive Officer. Mr. Gonzalez withdrew his claim for additional severance pursuant to his Employment Agreement, and the Company withdrew its counterclaims. On the Company received a ruling in favor of Mr. Gonzalez finding that he was terminated by the Company without cause on Mr. Gonzalez was awarded salary, bonus, and benefits in the aggregate amount of plus interest, attorneys’ fees, and other costs. The arbitration award is final and binding on the parties. The Company paid an aggregate of to Mr. Gonzalez on

 

 

On FTI Consulting, Inc. (“FTI”) commenced an action against the Company in the Supreme Court of the State of New York, County of New York, seeking damages in excess of comprised of: (i) for investigative and consulting services FTI alleges to have provided to the Company pursuant to an Engagement Agreement between FTI and the Company, and (ii) in excess of for purported interest due on unpaid invoices, plus attorneys’ fees, costs and expenses.  On the Company filed an Answer and Counterclaim denying the allegations of the Complaint and seeking damages on its Counterclaim, in an amount to be determined at trial, for intentional overbilling by FTI. On a preliminary conference was held by the Court at which time a scheduling order governing discovery was issued. On the Company and FTI entered into a settlement agreement. According to FTI, as of FTI was owed including interest charges and legal fees. Under the terms of the settlement agreement, the Company paid an aggregate of to FTI on

 

 

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.  The 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 District 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 District Court granted judgment for Navidea and dismissed all claims in the case.  The District Court stated that Platinum-Montaur had standing to assert any contractual interest in funds that might be due under the Platinum Loan Agreement.  The District 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.

 

On Platinum-Montaur filed a notice of appeal with the United States Court of Appeals for the Second Circuit claiming that the District Court erred in dismissing Platinum-Montaur’s claims for breach of contract and unjust enrichment. On Platinum-Montaur filed its brief in the Second Circuit, asking the Second Circuit to reverse the District Court and remand the case to the District Court for further proceedings. On the Company filed its brief in the Second Circuit. It is known at this time whether the Second Circuit will hold oral argument on this matter or when the Second Circuit will render its decision. See Note

 

 

Effective Dr. Michael Goldberg resigned from his positions as an executive officer and a director of Navidea. In connection with Dr. Goldberg’s resignation, Navidea and Dr. Goldberg entered into the 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. On the Company issued million shares of common stock of Navidea to Dr. Goldberg, million of which were placed in escrow in accordance with the Agreement. As of the date of filing 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

 

 

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. The Staff initially granted Navidea a plan period through to regain compliance with Section (f)(v) by effecting a reverse stock split or otherwise demonstrating sustained price improvement.

 

In Navidea’s stockholders voted to approve a potential amendment to the Company’s amended and restated certificate of incorporation to effect a reverse split of the Company’s common stock, as determined by the Board of Directors at its discretion, of a ratio of less than -for- and more than -for-twenty.

 

On the Company received a notice from the NYSE American that they had granted the Company an extension until to regain compliance with Section (f)(v) of the NYSE American’s continued listing standards. 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.