13.

Equity Instruments

a.

Preferred Stock and Common Stock: 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 and the remaining $812,000 of proceeds were received and the related Common Stock was issued in January 2020.

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. The entire $3.4 million was received and the related 4,020,588 shares of Common Stock were issued during 2020.

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 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 had the option to 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 “Series C Conversion Shares”), provided that the Company could not issue such Series C Conversion Shares in excess of 19.99% of the number of shares of Common Stock outstanding as of the date of the investment (the “Series C Exchange Cap”) without shareholder approval, which the Company was not required to seek. The entire $4.2 million was received and the related 420,000 shares of Series C Preferred Stock were issued during 2020. In accordance with current accounting guidance, the Company recorded a deemed dividend of approximately $467,000 related to the BCF of the 420,000 shares of Series C Preferred Stock that were issued during the year ended December 31, 2020. These 420,000 shares were subsequently converted into 1,425,076 shares of Common Stock during 2020.

On August 9, 2020, Company entered into a binding MOU with Jubilant. The MOU outlines the terms and framework for a potential Exclusive License and Distribution Agreement for Navidea’s Tc99m-Tilmanocept Rheumatoid Arthritis diagnostic application in the United States, Canada, Mexico, and Latin America. In connection with the MOU, the Company entered into a Stock Purchase Agreement with Jubilant, pursuant to which Jubilant purchased 209,205 shares of Common Stock for gross proceeds of $1.0 million in exchange for exclusivity of negotiations while due diligence efforts are completed. The investment was priced “at market,” which was the closing price of Navidea’s Common Stock on the NYSE American on the trading day immediately preceding the investment. See Note 2.

On August 30, 2020, the Company entered into a Common Stock Purchase Agreement with each of the Investors named therein, pursuant to which the Investors agreed to purchase from the Company, up to $25.0 million in shares of the Company’s Common Stock. The initial closing of the sale and purchase of the Common Stock (the “Initial Closing”) was required to occur within forty-five (45) business days after the date on which the NYSE American approved the Company’s listing application for the Common Stock. The Investors agreed to purchase an aggregate of 1,000,000 shares of Common Stock at the Initial Closing, at a purchase price of $5.00 per share. Subsequent closings of the sale and purchase of the Common Stock (each a “Subsequent Closing”) were to occur from time to time after the Initial Closing on such dates and times as agreed upon by the Company and the Investors, but in any event no later than ninety (90) business days after the Initial Closing; provided that the closing price of the Common Stock on the NYSE American exchange shall have closed at or above $5.00 for five consecutive trading days. The Investors were to purchase the Common Stock at such Subsequent Closing at a price per share equal to market value within the meaning of Section 713 of the NYSE American Company Guide; provided that in no event would the Investors be obligated to purchase Common Stock at a Subsequent Closing at a price greater than $5.75 per share. The Company had the right to terminate the Common Stock Purchase Agreement upon written notice to the Investors if (a) the Initial Closing had not occurred within ninety (90) days of the date of the agreement or (b) if the Investors have not purchased an aggregate of $25.0 million in Common Stock as of the date that was ninety (90) business days after the Initial Closing. Notwithstanding the foregoing, no Investor was obligated to purchase any Common Stock if such shares proposed to be purchased, when aggregated with all other shares of Common Stock then owned beneficially by such Investor and its affiliates, would have resulted in the beneficial ownership by such Investor and its affiliates of more than 4.99% of the then issued and outstanding shares of Common Stock. One of the Company’s existing investors, John K. Scott, Jr., was a party to the Common Stock Purchase Agreement and agreed to purchase $25,000 of Common Stock, which amount was received and the related 5,000 shares of Common Stock were issued during 2020. In accordance with current accounting guidance, the remaining $4.975 million of stock subscriptions receivable was included in common stock subscriptions receivable on the consolidated balance sheet as of December 31, 2020. During the second quarter of 2021, the Company determined that it was unlikely that the remaining $4.975 million would ever be collected. Accordingly, the common stock subscription receivable was reversed from the consolidated balance sheet during the second quarter of 2021. On December 14, 2021, the Company terminated the Common Stock Purchase Agreement. See Note 2.

On August 31, 2020, the Company entered into the Series D Preferred Stock Purchase Agreement with Keystone pursuant to which the Company agreed to issue to Keystone 150,000 shares of newly-designated Series D Preferred Stock for an aggregate purchase price of $15.0 million. Pursuant to the Series D Preferred Stock Purchase Agreement, Keystone agreed to purchase Series D Preferred Stock in amounts to be determined by Keystone in one or more closings during the nine-month period following the date on which the prospectus supplement to register the underlying Common Stock was filed with the SEC, provided that all of the Series D Preferred Stock must be purchased by such date. Holders of the Series D Preferred Stock have the option to convert some or all of the Series D Preferred Stock into shares of the Company’s Common Stock at a 10% discount to market (the “Series D Conversion Shares”), provided that the Company may not issue such Series D Conversion Shares in excess of 19.99% of the number of shares of Company common stock outstanding as of the date of the investment without shareholder approval, which the Company is not required to seek. The Series D Preferred Stock is convertible into a maximum of 5,147,000 shares of Common Stock.

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 D 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 D 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 D 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 D 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 D Preferred Stock could then be converted.

Of the $15.0 million, approximately $1.8 million was received and the related 17,750 shares of Series D Preferred Stock were issued during 2020. The Company recorded a deemed dividend of approximately $197,000 related to the BCF of the 17,750 shares of Series D Preferred Stock that were issued during 2020. These 17,750 shares were subsequently converted into 827,280 shares of Common Stock during 2020. An additional $2.9 million was received and the related 29,250 shares of Series D Preferred Stock were issued during the period beginning on January 1, 2021 and ending on March 26, 2021, the date of filing of the 2020 Annual Report on Form 10-K. These 29,250 shares of Series D Preferred Stock were subsequently converted into 1,375,089 shares of Common Stock during the period beginning on January 1, 2021 and ending on March 26, 2021. In accordance with current accounting guidance, $2.9 million of stock subscriptions receivable was included in stock subscriptions and other receivables, and approximately $10.3 million was included in preferred stock subscriptions receivable in the consolidated balance sheet as of December 31, 2020.

Through July 7, 2021, Keystone purchased 72,500 shares of Series D Preferred Stock pursuant to the Series D Preferred Stock Purchase Agreement for an aggregate purchase price of $7.25 million, which were subsequently converted into 3,778,789 shares of Common Stock through December 31, 2021. Of those amounts, 17,750 shares of Series D Preferred Stock were purchased and converted into 827,280 shares of Common Stock in 2020, and 54,750 shares of Series D Preferred Stock were purchased and converted into 2,951,509 shares of Common Stock in 2021. On July 8, 2021, the Company entered into the Series D Amendment with Keystone pursuant to which Keystone purchased 22,077 shares of Series D Preferred Stock for an aggregate purchase price of approximately $2.2 million. After purchasing the 22,077 shares, Keystone has no further right or obligation to purchase shares of Series D Preferred Stock. Accordingly, the Series D Preferred Stock subscription receivable was reduced to $0 on the condensed consolidated balance sheet as of December 31, 2021. Including the purchases pursuant to the Series D Amendment, Keystone’s purchases of Series D Preferred Stock pursuant to the Series D Purchase Agreement during the year ended December 31, 2021 totaled 76,827 shares of Series D Preferred Stock for an aggregate purchase price of approximately $7.7 million. The Series D Amendment also contains a customary mutual release provision. As of December 31, 2021, 22,077 shares of Series D Preferred Stock remain outstanding. See Note 2.

On March 2, 2021, the Company entered into a Series E Preferred Stock Purchase Agreement with an existing accredited investor, John K. Scott, Jr. pursuant to which the Company issued to Mr. Scott in a private placement transaction 50,000 shares of Series E Preferred Stock for an aggregate purchase price of $5.0 million.

Under the Series E Preferred Stock Purchase Agreement, Mr. Scott was granted a right of first offer with respect to future issuances of Company securities (the “Right of First Offer”); provided, however, that in no event shall Mr. Scott have such right if the acquisition of any of such securities would result in Mr. Scott beneficially holding more than 33.33% of the Company’s outstanding Common Stock on an as-converted basis, as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules thereunder (the “Share Cap”). In the event that Mr. Scott does not exercise the Right of First Offer, the Company will then be entitled to offer and sell the new securities to any third party at a price not less than, and upon terms no more favorable to the offeree than, those offered to Mr. Scott (a “Third Party Offering”). Pursuant to the Series E Preferred Stock Purchase Agreement, Mr. Scott also has the option to purchase up to 33.33% of the new securities offered in a Third-Party Offering at the same price and upon the terms available to the other purchaser(s) (the “Preemptive Right”); provided, however, that in no event may Mr. Scott acquire new Company securities in a Third-Party Offering to the extent the acquisition thereof would violate the Share Cap. The Right of First Offer and the Preemptive Right expired on December 31, 2021.

In connection with the private placement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which, among other things, the Company prepared and filed with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-1 to register for resale the maximum number of Series E Conversion Shares (as defined below) issuable upon conversion of the Series E Preferred Stock. In the event that both (i) the number of shares of Common Stock beneficially held by Mr. Scott falls below 20% of the outstanding Common Stock on an as-converted basis, as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder, and (ii) Mr. Scott is an affiliate (as that term is defined under Rule 144) at the time of the Reload Request (as defined below), the Company, upon written request from Mr. Scott (the “Reload Request”), will be required prepare and file with the SEC one, and only one, additional registration statement covering the resale of those shares of Common Stock owned by Mr. Scott as of the date of the Reload Request that, as of such time, are not registered for resale under the Securities Act of 1933, as amended (the “Securities Act”). The securities issued in the offering have not been registered under the Securities Act, and until so registered the securities may not be offered or sold absent registration or availability of an applicable exemption from registration.

Except with respect to transactions which may adversely affect any right, preference, privilege or voting power of the Series E Preferred Stock, the Series E Preferred Stock has no voting rights. Whenever the Company’s Board of Directors declares a dividend on Common Stock, each record holder of a share of Series E Preferred Stock on the record date set by the Board of Directors will be entitled to receive an amount equal to such dividend declared on one share of Common Stock multiplied by the number of shares of Common Stock (the “Series E Conversion Shares”) into which such share of Series E Preferred Stock could be converted on the record date, without regard to any conversion limitations in the Series E Preferred Certificate of Designation of Preferences, Rights and Limitations (the “Series E Preferred Certificate”). Holders of the Series E Preferred Stock may convert some or all of the Series E Preferred Stock into Series E Conversion Shares at a fixed price of $2.30 per Series E Conversion Share, provided that the aggregate number of Series E Conversion Shares issued pursuant to the Series E Preferred Certificate cannot exceed the Share Cap without shareholder approval, which the Company is not required to seek. The Company has the right to redeem any outstanding shares of Series E Preferred Stock at a price of $110 per share at any time on or prior to the one-year anniversary of the issuance date, payable in cash. See Note 2.

Navidea has used the net proceeds from these transactions to fund its R&D 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 year ended December 31, 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. No such stock bonus payments were made during the year ended December 31, 2021.

b.

Stock Warrants: As of December 31, 2021, there are 972,324 outstanding warrants to purchase Common Stock. The warrants are exercisable at prices ranging from $0.20 to $49.80 per share with a weighted average exercise price per share of $17.97. The warrants have remaining outstanding terms ranging from 0.2 to 13.6 years.

*

Weighted average exercise price.

c.

Common Stock Reserved: As of December 31, 2021, we have reserved 1,892,114 shares of authorized Common Stock for the exercise of all outstanding stock options and warrants, 1,368,211 shares for the issuance of Common Stock upon conversion of Series D Preferred Stock, 2,173,913 shares for the issuance of Common Stock upon conversion of Series E Preferred Stock and 49,242 shares to be issued to certain directors who elected to defer receipt of both cash stock for director fees until at least July 1, 2022. An additional 250,000 shares of Common Stock have been reserved for issuance to Dr. Goldberg related to the Goldberg Agreement. See Note 11.