| Significant Accounting Policies [Text Block] |
| | Summary of Significant Accounting Policies | | |
Basis of Presentation: The information presented as of March
31, 2020 and for the three -month periods ended March
31, 2020 and 2019 is unaudited, but includes all adjustments (which consist only of normal recurring adjustments) that the management of Navidea Biopharmaceuticals, Inc. (“Navidea”, the “Company,” or “we”) believes to be necessary for the fair presentation of results for the periods presented. Certain prior period amounts also have been reclassified to conform to the current year’s presentation. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. The balances as of March
31, 2020 and the results for the interim periods are not necessarily indicative of results to be expected for the year. The consolidated financial statements should be read in conjunction with Navidea’s audited consolidated financial statements for the year ended December
31, 2019, which were included as part of our Annual Report on Form 10 -K. | Our consolidated financial statements include the accounts of Navidea and our wholly owned subsidiary, Navidea Biopharmaceuticals Limited, as well as those of our majority-owned subsidiary, Macrophage Therapeutics, Inc. (“MT”). All significant inter-company accounts were eliminated in consolidation. In March 2020, the World Health Organization categorized the current COVID- 19 outbreak as a pandemic, and the President of the United States declared the COVID- 19 outbreak a national emergency. COVID- 19 continues to spread globally, including throughout the United States, which has impacted the global economy and may impact our operations, including the potential interruption of our clinical trial activities and our supply chain. To date, we do not believe there has been any appreciable impact to the Company’s clinical development and regulatory timelines resulting from COVID- 19. However, the COVID- 19 pandemic has adversely affected economies and financial markets worldwide, resulting in an economic downturn that could impact our business, financial condition and results of operations, including our ability to obtain additional funding, if needed. To date, much of the funding from the February 2020 transactions described in Note 2 below has been delayed, due in part to the COVID- 19 pandemic and its devastating impact on global financial markets. The extent to which COVID- 19 impacts our operations and financial results will depend on numerous evolving factors that we are not able to accurately predict, including: the duration and scope of the pandemic, government actions taken in response to the pandemic, and the impact on our ability to continue to conduct our clinical trials.
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Financial Instruments and Fair Value: The following methods and assumptions were used to estimate the fair value of each class of financial instruments: | | | |
Cash
and cash equivalents
, accounts and other receivables, and accounts payable: The carrying amounts approximate fair value because of the short maturity of these instruments. | | | |
Notes payable: The carrying value of our debt at March 31, 2020 and December
31, 2019 primarily consisted of the face amount of the notes plus accrued interest. At March 31, 2020 and December 31, 2019, the fair value of our notes payable was approximately $176,000 and $306,000, both amounts equal to the carrying value of the notes payable. See Note 8.
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Revenue Recognition: We currently generate revenue primarily from grants to support various product development initiatives. We generally recognize grant revenue when expenses reimbursable under the grants have been paid and payments under the grants become contractually due. | 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 3.
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Leases: All of our leases are operating leases and are included in right-of-use lease assets, current lease liabilities and noncurrent lease liabilities on our consolidated balance sheets. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s incremental borrowing rates or implicit rates, when readily determinable. The discount rates used for each lease were based principally on the Platinum debt, which was secured and outstanding for most of 2018. We used a “build-up” method where the approach was to estimate the risk/credit spread priced into the debt rate and then adjust that for the remaining term of each lease. Additionally, some market research was completed on the Company’s peer group as identified for purposes of compensation analysis. Short-term operating leases which have an initial term of 12 months or less are not recorded on the consolidated balance sheets. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Lease expense is included in selling, general and administrative expenses on our consolidated statements of operations. See Note 9.
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Recent
ly
Adopted
Accounting
Standards
: In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018 - 13, Fair Value Measurement (Topic 820 ): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement . ASU 2018 - 13 is intended to improve the effectiveness of disclosure requirements on fair value measurements in Topic 820. ASU 2018 - 13 modifies certain disclosure requirements and is effective for annual and interim reporting periods beginning after December 15, 2019. The adoption of ASU 2018 - 13 did not have any impact on our consolidated financial statements or our fair value disclosures. | | | |
Recently Issued Accounting Standards: In December 2019, the FASB issued ASU No. 2019 - 12,
:
Simplifying the Accounting for Income Taxes . ASU 2019 - 12 is intended to improve consistent application and simplify the accounting for income taxes. ASU 2019 - 12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance. ASU 2019 - 12 is effective for annual and interim reporting periods beginning after December 12, 2020, with early adoption permitted. We do not expect the adoption of ASU 2019 - 12 to have a material impact on our consolidated financial statements. |
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