Quarterly report pursuant to Section 13 or 15(d)

Note 11 - Equity

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Note 11 - Equity
 6 Months Ended
Jun. 30, 2020
Notes to Financial Statements  
Stockholders' Equity Note Disclosure [Text Block]
1
1
.
Equity
 
In
December 2019,
the Company executed a Stock Purchase Agreement with the investors named therein. Pursuant to the Stock Purchase Agreement, the investors agreed to purchase approximately
2.1
million shares of the Company's Common Stock in a private placement for aggregate gross proceeds to the Company of approximately
$1.9
million. Of this amount, approximately
$1.1
million was received during
2019.
The remaining
$812,000
of proceeds were received and the related Common Stock was issued in
January 2020.
In accordance with current accounting guidance, the
$812,000
of stock subscriptions receivable was included in stock subscriptions and other receivables in the consolidated balance sheet as of
December 31, 2019.
 
In
February 2020,
the Company executed agreements with
two
existing investors to purchase approximately
4.0
million shares of the Company's Common Stock for aggregate gross proceeds to Navidea of approximately
$3.4
million. Of this amount, approximately
$3.0
million was received during the
first
and
second
quarters of
2020.
The remaining
$392,000
was received and the related Common Stock was issued during
July 2020.
In accordance with current accounting guidance, the
$392,000
of stock subscriptions receivable was included in stock subscriptions and other receivables in the consolidated balance sheet as of
June 30, 2020.
 
Also in
February 2020,
the Company executed a binding term sheet to sell the Judgment entered by the Ohio Court of Common Pleas in favor of Navidea in the amount of
$4.3
million plus interest, for
$4.2
million of proceeds to Navidea. On
May 6, 2020,
the Company entered into a Stock Purchase Agreement and Letter of Investment Intent with Keystone pursuant to which the Company agreed to issue to Keystone
420,000
shares of newly-designated Series C Preferred Stock for an aggregate purchase price of
$4.2
million. Pursuant to the Stock Purchase Agreement, Keystone agreed to purchase shares of Series C Preferred Stock in amounts to be determined by Keystone in
one
or more closings (each, a “Call Closing”) on or before
November 6, 2020,
provided that all of the Series C Preferred Stock must be purchased by such date.
 
Holders of the Series C Preferred Stock
may
convert some or all of the Series C Preferred Stock into shares of the Company's Common Stock at a
10%
discount to market (the “Conversion Shares”), provided that the Company
may
not
issue such Conversion Shares in excess of
19.99%
of the number of shares of Company common stock outstanding as of the date of the investment (the “Exchange Cap”) without shareholder approval, which the Company is
not
required to seek. In the event that (a) the Company does
not
have enough Conversion Shares registered for resale so as to allow for a requested conversion and immediate resale, or (b) if the number of Conversion Shares issued reaches the Exchange Cap, then the Company will be required to redeem the difference in cash at
$11
per share of Series C Preferred Stock, but only if, when and to the extent that the Company has received cash proceeds as a result of the Judgment being affirmed.
 
In the event of the liquidation or dissolution of the Company, after payment of the debts and other liabilities of the Company, the holders of Series C Preferred Stock then outstanding shall be entitled to receive, out of the assets of the Company and before any payment
may
be made to the holders of Common Stock or any other junior stock, an amount per share of Series C Preferred Stock calculated by taking the total amount available for distribution to holders of all outstanding Common Stock before deduction of any preference payments for the Series C Preferred Stock, divided by the total of (
x
) all of the then outstanding shares of Common Stock plus (y) all of the shares of Common Stock into which the outstanding shares of Series C Preferred Stock can be converted, and then (z) multiplying the sum so obtained by the number of shares of Common Stock into which such share of Series C Preferred Stock could then be converted (the "Series C Preferred Liquidation Preference Amount").
 
Of the
$4.2
million,
$700,000
was received and the related
70,000
shares Series C Preferred Stock was issued during the
second
quarter of
2020.
These
70,000
shares were subsequently converted into
410,765
shares of Common Stock during the
second
quarter of
2020.
The remaining
$3.5
million was received and the related
350,000
shares of Series C Preferred Stock were issued during the period beginning on
July 1, 2020
and ending on the date of filing of this Quarterly Report on Form
10
-Q. These
350,000
shares were subsequently converted into
1,014,311
shares of Common Stock during the period beginning on
July 1, 2020
and ending on the date of filing of this Quarterly Report on Form
10
-Q. In accordance with current accounting guidance,
$3.5
million of stock subscriptions receivable was included in stock subscriptions and other receivables in the consolidated balance sheet as of
June 30, 2020.
 
In accordance with current accounting guidance, the Company recorded a deemed dividend of approximately
$78,000
related to the BCF of the
70,000
shares of Series C Preferred Stock that were issued during the
three
-month period ended
June 30, 2020. 
The Series C Preferred Stock is classified as mezzanine equity.  See Note
1
(e).
 
Navidea intends to use the net proceeds from these transactions to fund its research and development programs, including continued advancement of its
two
Phase
2b
and Phase
3
clinical trials of
Tc99m
tilmanocept in patients with rheumatoid arthritis, and for general working capital purposes and other operating expenses. See Note
2.
 
During the
six
-month period ended
June 30, 2020,
we issued
94,159
shares of our common stock valued at
$172,000
to our full-time employees as partial payment in lieu of cash for their
2019
bonuses.
 
During the
six
-month periods ended
June 30, 2020
and
2019,
we issued
32,651
and
8,128
shares of our common stock as matching contributions to our
401
(k) Plan which were valued at
$40,000
and
$20,000,
respectively.