XML 73 R20.htm IDEA: XBRL DOCUMENT v2.4.0.8
Commitments and Contingencies
12 Months Ended
Dec. 31, 2013
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

13. Commitments and Contingencies

In August 2013 the Company vacated its offices in Hopkinton, MA and is currently occupying approximately 200 square feet of office space in Auburndale, MA as a tenant at will on a shared basis at $500 per month. Total rent expense was approximately $25,800, $2,500 of which is for the Auburndale space and $71,500 for the years ended December 31, 2013 and 2012, respectively and approximately $4,141,300 for the period from inception (October 16, 1992) through December 31, 2013.

On March 13, 2012 the Company received notice that Boston Children’s Hospital and Children’s Medical Center Corporation had filed a lawsuit in Middlesex Superior Court, Middlesex County, Massachusetts seeking to recover amounts alleged to be owed by the Company to the plaintiffs.

On February 1, 2013 the Company entered into a Settlement Agreement and Release with Boston Children’s Hospital (BCH) and Children’s Medical Center Corporation (CMCC) in full settlement of the lawsuit filed by BCH and CMCC seeking to recover amounts alleged to be owed by the Company to the plaintiffs totaling $642,906 plus costs.

In settlement of all claims by BCH and CMCC, the Company agreed to pay a lump sum of One Hundred Eighty five Thousand dollars ($185,000) to the plaintiffs. In addition to the lump sum payment, the Company agreed to pay to the plaintiffs an additional sum equal to the then cash value of 20,000 shares of the common stock of Navidea upon the occurrence of the first milestone described in Section 4.2 of the sublicense agreement dated as of July 31, 2012 between Navidea and the Company. The milestone occurred in December, 2013 at which time the value of 20,000 shares of Navidea common stock was $40,000. The Company paid CMCC the sum of $40,000 in January 2014 in accordance with the terms of the Settlement Agreement and Release.

 

On May 2, 2012 the Company received notice that Biostorage Technologies, Inc (Biostorage) had filed a lawsuit in Marion Superior/Circuit Court, Marion County, Indiana seeking to recover amounts alleged to be owed by the Company to the plaintiffs totaling $119,363. On July 27 , 2013, the Company entered into a settlement agreement with Biostorage pursuant to which the Company agreed to pay a total of $75,000 to Biostorage in three installments as follows: $10,000 on July 31, 2013, $40,000 December 31, 2013 and $25,000 February 28, 2014. The Company also agreed to stipulate a judgment in the amount of $95,000 to be adjusted down by each payment actually made by the Company and so long as each required payment is made by the Company on time, the judgment will be vacated on February 28, 2014. As of December 31, 2013 the Company had paid the entire $75,000 settlement amount in full and therefore recognized the remaining $20,000 as a gain which is reported in other income.

Sublicense Agreement with Navidea

Effective July 31, 2012, the Company entered into an exclusive, worldwide sublicense agreement with Navidea for the research, development and commercialization of Altropane. Altropane is an Iodine-123 radiolabeled imaging agent which is being developed as an aid in the diagnosis of Parkinson’s disease and movement disorders as described in Note 9.

Either party may terminate the agreement if the other party materially breaches the agreement and such breach remains uncured for 60 days after the date of notice of such breach. Navidea has the right to terminate the agreement at any time for any or no reason, in part or in its entirety, upon providing sixty day notice to the Company. If neither party terminates the agreement, then the agreement will remain in effect until the occurrence of the last royalty expiration date as such term is defined in the sublicense agreement.

Amended and Restated License Agreement with Harvard

Simultaneous with the signing of the Navidea Sublicense Agreement in July 2012, the Company entered into an Amended and Restated License Agreement with Harvard which resulted in the revision of certain financial terms regarding the royalty payable to Harvard, the percentage of non-royalty income payable to Harvard by the Company and the timing of said payments. Pursuant to the agreement, the Company is obligated to make a cash payment of $8,750 to Harvard in connection with the receipt of the cash consideration of $175,000 received from Navidea upon execution of the sublicense agreement. This payment is due to Harvard within 30 days following the first commercial sale of the Altropane product. The Company was also obligated to transfer to Harvard 15,000 shares of the Navidea common stock received as part of the sublicense agreement to Harvard. The shares were transferred during January 2013. As result of the receipt by the Company of the first milestone payment from Navidea in December 2013, the Company is obligated to transfer 5,000 shares of the Navidea common stock received by the Company. These shares will be transferred upon the effectiveness of an S-3 registration statement to be filed by Navidea covering the shares issued. In addition, the Company is obligated to make a cash payment of $10,000 to Harvard in connection with the receipt of the cash milestone of $200,000 received from Navidea. This payment is due to Harvard within 30 days following the first commercial sale of the Altropane product.

Guarantor Arrangements

The Company has entered into agreements to indemnify its executive officers and directors for certain events or occurrences while the officer or director is, or was serving, at the Company’s request in such capacity. The indemnification period is for the officer’s or director’s lifetime. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a director and officer insurance policy that limits the Company’s exposure and enables the Company to recover a portion of any future amounts paid. As a result of the Company’s insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is minimal.