Amendment to NOL Rights Agreement

On April 7, 2022, the Company’s Board of Directors (the “Board”) adopted an NOL rights plan in the form of a Section 382 Rights Agreement (“NOL Rights Agreement”) to preserve and protect the Company’s net operating loss carryforwards (“NOLs”) and other tax assets. As of December 31, 2022, the Company had approximately $175 million of NOLs available to offset future federal taxable income.

Under the NOL Rights Agreement, the Board declared a non-taxable dividend of one preferred share purchase right for each outstanding share of common stock of the Company, each right initially representing the right to purchase one one-thousandth of a share of our Series H Junior Participating Preferred Stock. The rights will be exercisable only if a person or group acquires 4.99% or more of Navidea common stock. Existing shareholders that beneficially own in excess of 4.99% of Navidea common stock are “grandfathered in” at their current ownership level and the rights then become exercisable if any of those stockholders acquire an additional 0.5% or more of Navidea common stock. If the rights become exercisable, all holders of rights, other than the person or group triggering the rights, will be entitled to purchase Navidea common stock at a 50 percent discount or the Company may exchange each right held by such holders for five shares of common stock (the “Exchange Ratio”). Rights held by the person or group triggering the rights will become void and will not be exercisable. The Board has the discretion to exempt any person or group from the provisions of the NOL Rights Agreement.

On January 10, 2023, the Board approved the First Amendment to Section 382 Rights Agreement (“NOL Rights Agreement Amendment”), which reduced the Exchange Ratio from five shares of common stock per right to three shares of common stock per right. No other terms of the NOL Rights Agreement were amended.

The rights issued under the NOL Rights Agreement, as amended, will expire on the earliest of (i) April 6, 2025; (ii) the effective date of the repeal of Section 382 or any successor statute if the Board determines in its sole discretion that the amended NOL Rights Agreement is no longer necessary or desirable for the preservation of NOLs or other tax benefits; (iii) the first day of a taxable year of the Company to which the Board determines in its sole discretion that no NOLs or other Tax Benefits may be carried forward; or (iv) the day following the certification of the voting results of the Company’s 2022 annual meeting of stockholders if at or before such annual meeting a proposal to approve the NOL Rights Agreement has not been approved by stockholders, unless the Rights are earlier redeemed or exchanged by the Company, or upon the occurrence of certain transactions.

401(k) Employer Match

During the three-month periods ended March 31, 2023 and 2022, we issued 163,586 and 53,238 shares of our Common Stock as matching contributions to our 401(k) Plan, which were valued at $52,348 and $44,720, respectively.

Long Term Incentive Plan

On September 9, 2022, the Company’s Board of Directors (the “Board”) approved and adopted the terms and conditions of a long-term incentive plan (“LTIP”) that seeks to motivate and reward employees. The LTIP provides for the issuance of share-based awards to employees of the Company pursuant to the 2014 Plan. The target amount of the stock award under the LTIP for each employee was determined based on a variety of factors. Payout of the stock awards is based on the achievement of pre-established performance objectives and goals related to financing and U.S. Food and Drug Administration (“FDA”) and European Medicines Agency (“EMA”) regulatory milestones for the Company’s Phase 3 clinical trial for rheumatoid arthritis (NAV3-33). The financing and EMA regulatory milestones will each comprise 5% of the total stock award payout for participants; the FDA regulatory milestones will comprise the remaining 90%. The payout amount is subject to downward adjustment based on the timing of the achievement of the particular milestone. In order to receive the payout, the participant generally will be required to continue to be employed through the date of the payout.

Although the Company did not fully satisfy the financing milestone, based on completion of the Rights Offering in August 2022 (“2022 Rights Offering”), the Board decided to pay out 5% of the target stock award to all participants under the LTIP. During the year ended December 31, 2022, we issued 70,500 shares of Common Stock to all participants under the LTIP, which were valued at $19,740. Upon issuance of the stock awards, the participants were 100% vested in the stock awards.

On March 10, 2023, the Board amended the LTIP to award all 1,339,500 remaining unearned LTIP stock awards as stock options. The LTIP stock options have an exercise price of $0.32 per share and will expire on the tenth anniversary of the date of grant. The LTIP stock options will vest according to the performance objectives originally established for the LTIP as described above.