Quarterly report pursuant to Section 13 or 15(d)

Derivative Instruments

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Derivative Instruments
6 Months Ended
Jun. 30, 2012
Derivative Instruments
9. Derivative Instruments

 

Certain warrants to purchase our common stock are considered derivative liabilities under current accounting standards. At June 30, 2012, Navidea’s Series GG warrants are considered derivative liabilities under these standards. We do not use derivative instruments for hedging of market risks or for trading or speculative purposes.

 

During the first six months of 2012, an outside investor exercised 20,000 Series V warrants, resulting in reclassification of $52,000 in derivative liabilities related to those warrants to additional paid-in capital. During the first six months of 2011, certain outside investors exercised 1,578,948 Series CC warrants, 1,194,211 Series DD warrants, 810,000 Series V warrants, and 60,000 Series Z warrants, resulting in reclassification of $1.4 million in derivative liabilities related to those warrants to additional paid-in capital.

 

The net effect of marking the Company’s derivative liabilities to market during the three-month periods ended June 30, 2012 and 2011 resulted in net increases in the estimated fair values of the derivative liabilities of approximately $93,000 and $10,000, respectively, which were recorded as non-cash expense. The net effect of marking the Company’s derivative liabilities to market during the six-month periods ended June 30, 2012 and 2011 resulted in net increases in the estimated fair values of the derivative liabilities of approximately $277,000 and $964,000, respectively, which were also recorded as non-cash expense. The total estimated fair value of the remaining derivative liabilities was $793,000 and $569,000 as of June 30, 2012 and December 31, 2011, respectively.