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Contingent Royalty Liability
12 Months Ended
Dec. 31, 2013
Text Block [Abstract]  
Contingent Royalty Liability

8. Contingent Royalty Liability

Effective July 31, 2012, Robert Gipson, Thomas Gipson, Arthur Koenig and Ingalls & Snyder Value Partners LP, all lenders to the Company under a Convertible Note Purchase Agreement originally executed in 2007 and herein referred to as the prior lenders, elected to convert $16,000,000 of principal outstanding under the promissory notes to a royalty on future net sales of the Company’s Altropane product.

On December 31, 2013 the Company entered into a Release of Liability Agreement with the prior lenders referenced above pursuant to which the prior lenders unconditionally released the Company from any and all liability to pay any royalties to them on future sales of Altropane.

Coincident with the execution of the Release of Liability Agreement with the prior lenders, the Company entered into a Purchase and Sale Agreement with Royalty Realization IV, LLC, a related party, that was created for the purpose of collecting royalties and paying them to the prior lenders, also related parties. The sole member of Royalty Realization IV, LLC is one of the three general partners of Ingalls & Snyder Value Partners LP. Ingalls & Snyder Value Partners LP is a related party as it is one of the prior lenders and the Company’s major shareholder and lender, Mr. Gipson, is also one of its three general partners. Neither of these general partners own more than 10% of Ingalls & Snyder Value Partners LP. The agreement provides that, in exchange for $25,000 cash consideration to the Company, Royalty Realization IV, LLC agreed to pay 8% royalties on future sales of Altropane to the prior lenders and the Company agreed to instruct Navidea to pay the 8% royalty due to the Company directly to Royalty Realization IV if and when such royalty is earned by the Company.

At December 31, 2013 the Company no longer carried any long-term contingent liability on its balance sheet and eliminated any requirement to estimate the value of such contingent liability. Since the prior lenders and Royalty Realization IV, LLC are considered related parties, the associated gain and consideration received were considered to be in essence capital transactions and therefore, were recognized as increases to additional paid in capital.