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 nine-month periods ended September 30, 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 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.

Stock Purchase Agreement

On April 26, 2023, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with Keystone Capital Partners, LLC (“Keystone”) whereby the Company may offer and sell, from time to time at its sole discretion, and whereby Keystone committed to purchase, up to $2,750,000 of shares of the Company’s Common Stock (but subject to certain limitations and conditions). Under the Purchase Agreement, the Company agreed to issue to Keystone 400,000 shares of Common Stock as consideration for its commitment to purchase shares under the Purchase Agreement, with 200,000 shares (based on the closing stock price of $0.25 as of April 25, 2023) being delivered on the date of the Purchase Agreement and the remaining 200,000 shares (based on the closing stock price of $0.25 as of April 25, 2023) to be delivered upon the Company raising a minimum of $2,750,000 under the Purchase Agreement or any other source. Concurrently with entering into the Purchase Agreement, the Company also entered into a registration rights agreement with Keystone, pursuant to which it agreed to provide Keystone with certain registration rights related to the shares issued under the Purchase Agreement.

On May 10, 2023, the Company entered into a letter agreement with Keystone, confirming and agreeing that the Company would not issue, and Keystone would not purchase, any shares under the Purchase Agreement in excess of 6,567,409 shares of Common Stock, which represents 19.99% of the shares of the Common Stock outstanding immediately prior to the execution of the Purchase Agreement, unless (i) the Company obtains stockholder approval to do so or (ii) the price per share paid equals or exceeds the greater of book value or market value of the Company’s Common Stock.

Between May 3, 2023 and May 25, 2023, the Company sold a total of 6,108,489 shares of Common Stock to Keystone under the Purchase Agreement, generating net proceeds of $600,126.

As a result of these Dilutive Issuances (as defined in the Certificate of Designation for the Series I Preferred Stock and the related Warrants issued in the 2022 Rights Offering), the conversion price of the Series I Preferred Stock and the exercise price of the Warrants have been adjusted to $0.16 per share. Based on the adjusted conversion price, each share of the Series I Preferred Stock is convertible into 6,250 shares of Common Stock.

Series J Preferred Stock

On May 22, 2023, the Company entered into Stock Purchase Agreements (each, a “Purchase Agreement”) with two accredited investors, pursuant to which the Company sold to the investors in a private placement a total of 11,000 shares of Series J Convertible Preferred Stock, par value $0.001 per share (“Series J Preferred Stock”), for an aggregate purchase price of $1,100,000. Under each Purchase Agreement, the Company also agreed to provide the investors with certain registration rights related to the resale of the shares of the Company’s Common Stock issuable upon conversion of the Series J Preferred Stock.

The Company filed a certificate of designation (the “Series J Certificate of Designation”) with the Secretary of State of Delaware designating the rights, preferences and limitations of the shares of Series J Preferred Stock on May 22, 2022. The Series J Certificate of Designation authorizes 150,000 shares of Series J Preferred Stock.

The Series J Preferred Stock will be convertible into a number of shares of Common Stock equal to the original issuance price divided by $0.104, subject to adjustment as provided in the Certificate of Designation. However, the holder may not convert shares of the Series J Preferred Stock if, as a result of such conversion, the holder would beneficially own more than 4.99% of the total number of shares of Common Stock outstanding at such time unless the holder of Series J Preferred Stock obtains the prior written consent of the Company (which consent the Company may withhold in its sole absolute discretion).

Except with respect to transactions which may adversely affect any right, preference, privilege or voting power of the Series J Preferred Stock, the Series J Preferred Stock has no voting rights. If dividends are declared on the Common Stock, the holder of Series J Preferred Stock will be entitled to receive an amount equal to the dividend declared on one share of Common Stock multiplied by the number of shares of Common Stock into which the Series J Preferred Stock could be converted on the record date, without regard to any conversion limitations.

Upon any liquidation, the holder of Series J Preferred Stock will be entitled to receive, before any assets may be distributed to the holders of Common Stock, an amount per share of Series J Preferred Stock calculated by taking the total amount available for distribution to holders of all of the Company’s outstanding Common Stock divided by the total of (x) all of the then outstanding shares of the Company’s Common Stock plus (y) all of the shares of the Company’s Common Stock into which all of the outstanding shares of the Series J 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 J Preferred Stock could then be converted.

Stock Exchange Agreement

On June 1, 2023, the Company entered into a Stock Exchange Agreement with John K. Scott, Jr., pursuant to which Mr. Scott surrendered 990 shares of Series G Redeemable Preferred Stock (“Series G Preferred Stock”) and $68,853 of accrued and unpaid dividends thereon in exchange for 11,969 shares of Series J Preferred Stock.

In accordance with U.S. GAAP, we determined that the fair value of the Series G Preferred Stock and accrued and unpaid dividends thereon that were surrendered pursuant to the Stock Exchange Agreement was approximately $1,058,853. The total fair value of the Series J Preferred Stock that was issued in exchange for the Series G Preferred Stock and accrued and unpaid dividends thereon was $1,196,900. Therefore, the incremental fair value received by Mr. Scott was approximately $138,045. The incremental amount was recognized as a deemed dividend during the second quarter of 2023.

Pursuant to the Stock Exchange Agreement, Mr. Scott also agreed to surrender his remaining 2,270 shares of Series G Preferred Stock and the remaining balance of accrued and unpaid dividends thereon in exchange for 27,889 shares of Series J Preferred Stock, subject to the Company’s stockholders approving the issuance of shares of the Company’s Common Stock upon conversion of such shares of series J Preferred Stock in compliance with NYSE American listing standards. The Company’s stockholders approved the issuance of Common Stock upon conversion of such shares of Series J Preferred Stock at the special meeting of stockholders (“Special Meeting”) held on July 27, 2023. However, the Company and Mr. Scott have agreed that the closing of the Series G exchange will occur no later than December 30, 2023.

In addition, the Stock Exchange Agreement provides Mr. Scott with certain registration rights related to the resale of the shares of Common Stock issuable upon conversion of the Series J Preferred Stock.

On June 6, 2023, Mr. Scott converted 11,969 shares of Series J Preferred Stock into 11,508,672 shares of the Company’s Common Stock.

Series K Preferred Stock Dividend and Redemption

On June 16, 2023, the Board declared a dividend of one one-thousandth of a share of Series K Preferred Stock, par value $0.001 per share (“Series K Preferred Stock”), for each outstanding share of the Company’s Common Stock to stockholders of record at 5:00 p.m. Eastern Time on June 27, 2023 (the “Record Date”). The Company issued 83,949 shares of Series K Preferred Stock pursuant to the stock dividend.

Each share of Series K Preferred Stock entitled the holder thereof to 1,000,000 votes per share and to vote together with the outstanding shares of Common Stock of the Company as a single class exclusively with respect to any proposal to adopt an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), to reclassify the outstanding shares of Common Stock into a smaller number of shares of Common Stock at a ratio specified in or determined in accordance with the terms of such amendment.

At the Special Meeting held on July 27, 2023, the Company’s stockholders approved the proposal to adopt an amendment to the Company’s Certificate of Incorporation to effect, on or prior to the one-year anniversary of the date of the Special Meeting, a reverse split of the common stock at a ratio between 1-for-20 and 1-for-50, with such ratio and the implementation and timing of such reverse stock split to be determined in the discretion of the Board of Directors (the Reverse Stock Split Proposal”). All shares of Series K Preferred Stock that were not present in person or by proxy at the Special Meeting as of immediately prior to the opening of the polls at such meeting were automatically redeemed in whole, but not in part, by the Company (the “Initial Redemption”). Any outstanding shares of Series K Preferred Stock that were not redeemed pursuant to an Initial Redemption were redeemed in whole, but not in part, automatically upon the approval by the Company’s stockholders of the Reverse Stock Split Proposal (the “Subsequent Redemption”) at the Special Meeting. Both the Initial Redemption and the Subsequent Redemption occurred on July 27, 2023. As a result, no shares of Series K Preferred Stock remain outstanding.

Partial Term Note Exchange

On June 29, 2023, the Company entered into a letter agreement with John K. Scott, Jr. to exchange $1,073,600 principal amount of the 2022 Bridge Note for 12,200,000 shares of Common Stock based on the closing stock price on June 28, 2023. See Note 8.