Note 7 - Investment in Macrophage Therapeutics, Inc.
|3 Months Ended|
Mar. 31, 2019
|Notes to Financial Statements|
|Investments in and Advances to Affiliates, Schedule of Investments [Text Block]||
August 2018,the Company entered into an Agreement (the “Agreement”) with Dr. Michael Goldberg related to his resignation from his positions as an executive officer and a director of Navidea. Among other things, the Agreement provided that Dr. Goldberg would become Chief Executive Officer of MT, and that MT would redeem all of Dr. Goldberg’s MT preferred stock and issue to Dr. Goldberg MT super voting common stock equal to
5%of the outstanding shares of MT, subject to execution of
oneor more additional definitive agreements (the “Definitive Agreements”). As of the date of filing of this Quarterly Report on Form
10-Q, the Definitive Agreements have
notyet been signed.
February 11, 2019,Dr. Goldberg represented to the MT Board that he had, without MT Board or shareholder approval, created a subsidiary of MT, transferred all of the assets of MT into the subsidiary, and then issued himself stock in the subsidiary. On
February 19, 2019,Navidea notified MT that it was terminating the sublicense effective
March 1, 2019because MT became insolvent pursuant to the sublicense agreement. On
February 20, 2019,the Board of Directors of MT removed Dr. Goldberg as President and Chief Executive Officer of MT and from any other office of MT to which he
mayhave been appointed or in which he was serving. Dr. Goldberg remains a member of the MT Board, together with Michael Rice and Dr. Claudine Bruck. Mr. Rice and Dr. Bruck remain members of the board of directors of Navidea. The MT Board then appointed Mr. Latkin to serve as President and Chief Executive Officer of MT.
February 20, 2019,Navidea filed a complaint against Dr. Goldberg in the United States District Court for the Southern District of New York, alleging breach of the Agreement, as well as a breach of the covenant of good faith and fair dealing and to obtain a declaratory judgment that Navidea’s performance under the Agreement is excused and that Navidea is entitled to terminate the Agreement as a result of Dr. Goldberg’s actions. On
April 10, 2019,Dr. Goldberg answered the complaint and asserted counterclaims against Navidea for breach of contract related to the Platinum Note, for tortious interference, and for breach of contract, fraud in the inducement, mutual mistake of fact, unilateral mistake of fact, negligent misrepresentation, breach of the implied covenant of good faith and fair dealing, a declaratory judgment, and injunctive relief in connection with the Agreement. On
April 26, 2019,Navidea filed an amended complaint against Dr. Goldberg which added a claim for breach of fiduciary duty seeking damages related to certain actions Dr. Goldberg took while CEO of Navidea.
February 20, 2019,MT initiated a suit against Dr. Goldberg in the Court of Chancery of the State of Delaware, alleging, among other things, breach of fiduciary duty as a director and officer of MT and conversion, and to obtain a declaratory judgment that the transactions Dr. Goldberg caused MT to enter into are void. On
March 13, 2019,the Court of Chancery entered an order maintaining status quo, which provided, among other things, that MT’s board of directors
mayauthorize any act or transaction on behalf of the Company, and that without prior written authorization of the MT board, Dr. Goldberg shall
nothold himself out as CEO of MT or purport to act or authorize any action on behalf of MT except as authorized by the MT board.
March 7, 2019,Dr. Goldberg filed a complaint against Navidea and MT in the United States District Court for the Southern District of New York. The complaint alleges a breach of contract claim against both Navidea and MT for failure to pay to Dr. Goldberg funds allegedly due to him under the Platinum Note. The complaint further alleges a breach of contract claim against Navidea due to Navidea’s failure to issue
1,175,000shares to Dr. Goldberg, to issue MT super voting common stock, by removing Dr. Greene from the MT board of directors, by appointing Mr. Rice and Dr. Bruck to the MT board of directors, and by terminating Dr. Goldberg as CEO of MT. On
April 26, 2019,Navidea moved to dismiss the claims related to the Platinum Note and MT filed an answer to the complaint. See Note
The entire disclosure for the information summarizing investments in and advances to majority-owned subsidiaries, other controlled companies, and other affiliates. It reflects specified information about ownership, financial results from, and financial position in such entities.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef