Navidea Biopharmaceuticals Annual Report 2017

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FY2017 Annual Report · Navidea Biopharmaceuticals

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from to to

Commission file number 001-35076

NAVIDEA BIOPHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

31-1080091
(I.R.S. Employer Identification No.)

4995 Bradenton Avenue, Suite 240, Dublin, Ohio
(Address of principal executive offices)

43017-3552
(Zip Code)

Registrant's telephone number, including area code (614) 793-7500

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, par value $.001 per share
(Title of Class)

NYSE American
(Name of Each Exchange on Which Registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting
company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer
Non-accelerated filer

☐
☐

Accelerated filer
(Do not check if a smaller reporting company)
Smaller reporting company
Emerging growth company

☒

☐
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b-2 of the Act.) Yes ☐ No ☒

The aggregate market value of shares of common stock held by non-affiliates of the registrant on June 30, 2017 was $78,564,174.

The number of shares of common stock outstanding on March 1, 2018 was 162,783,979.

None.

DOCUMENTS INCORPORATED BY REFERENCE

The Private Securities Litigation Reform Act of 1995 (the “PSLRA”) provides a safe harbor for forward-looking statements made by or on
behalf of the Company. Statements in this document which relate to other than strictly historical facts, such as statements about the
Company’s plans and strategies, expectations for future financial performance, new and existing products and technologies, anticipated
clinical and regulatory pathways, the ability to obtain, and timing of, regulatory approvals of the Company’s products, the timing and
anticipated results of commercialization efforts, and anticipated markets for the Company’s products, are forward-looking statements
within the meaning of the PSLRA. The words “believe,” “expect,” “anticipate,” “estimate,” “project,” and similar expressions identify
forward-looking statements that speak only as of the date hereof. Investors are cautioned that such statements involve risks and
uncertainties that could cause actual results to differ materially from historical or anticipated results due to many factors including, but
not limited to, material weaknesses in our internal control over financial reporting and our ability to maintain effective controls of
financial reporting in the future, the Company’s continuing operating losses, uncertainty of market acceptance, accumulated deficit,
future capital needs, uncertainty of capital funding, dependence on earnouts, royalties and grant revenue, limited product line and
distribution channels, competition, risks of development of new products, and other risks set forth below under Item 1A, “Risk Factors.”
The Company undertakes no obligation to publicly update or revise any forward-looking statements.

PART I

Item 1. Business

Development of the Business

Navidea Biopharmaceuticals, Inc. (“Navidea,” the “Company,” or “we”), a Delaware corporation (NYSE American: NAVB), is a
biopharmaceutical company focused on the development and commercialization of precision immunodiagnostic agents and
immunotherapeutics. Navidea is developing multiple precision-targeted products based on our Manocept™ platform to enhance patient
care by identifying the sites and pathways of undetected disease and enable better diagnostic accuracy, clinical decision-making and
targeted treatment.

On March 3, 2017, pursuant to an Asset Purchase Agreement dated November 23, 2016, (the “Purchase Agreement”), the Company
completed its previously announced sale to Cardinal Health 414, LLC (“Cardinal Health 414”) of its assets used, held for use, or intended
to be used in operating its business of developing, manufacturing and commercializing a product used for lymphatic mapping, lymph node
biopsy, and the diagnosis of metastatic spread to lymph nodes for staging of cancer (the “Business”), including the Company’s radioactive
diagnostic agent marketed under the Lymphoseek® trademark for current approved indications by the U.S. Food and Drug Administration
(“FDA”) and similar indications approved by the FDA in the future (the “Product”), in Canada, Mexico and the United States (the
“Territory”) (giving effect to the License-Back described below and excluding certain assets specifically retained by the Company) (the
“Asset Sale”). Such assets sold in the Asset Sale consist primarily of, without limitation, (i) intellectual property used in or reasonably
necessary for the conduct of the Business, (ii) inventory of, and customer, distribution, and product manufacturing agreements related to,
the Business, (iii) all product registrations related to the Product, including the new drug application approved by the FDA for the Product
and all regulatory submissions in the United States that have been made with respect to the Product and all Health Canada regulatory
submissions and, in each case, all files and records related thereto, (iv) all related clinical trials and clinical trial authorizations and all files
and records related thereto, and (v) all rights, title and interest in and to the Product, as specified in the Purchase Agreement (the “Acquired
Assets”).

In connection with the closing of the Asset Sale, the Company entered into a License-Back Agreement (the “License-Back”) with
Cardinal Health 414. Pursuant to the License-Back, Cardinal Health 414 granted to the Company a sublicensable (subject to conditions)
and royalty-free license to use certain intellectual property rights included in the Acquired Assets and owned by Cardinal Health 414 as of
the closing of the Asset Sale to the extent necessary for the Company to (i) on an exclusive basis, subject to certain conditions, develop,
manufacture, market, sell and distribute new pharmaceutical and other products that are not Competing Products (as defined in the
License-Back), and (ii) on a non-exclusive basis, develop, manufacture, market, sell and distribute the Product throughout the world other
than in the Territory. Subject to the Company’s compliance with certain restrictions in the License-Back, the License-Back also restricts
Cardinal Health 414 from using the intellectual property rights included in the Acquired Assets to develop, manufacture, market, sell, or
distribute any product other than the Product or other product that (a) accumulates in lymphatic tissue or tumor-draining lymph nodes for
the purpose of (1) lymphatic mapping or (2) identifying the existence, location or staging of cancer in a body, or (b) provides for or
facilitates any test or procedure that is reasonably substitutable for any test or procedure provided for or facilitated by the Product.
Pursuant to the License-Back and subject to rights under existing agreements, Cardinal Health 414 was given a right of first offer to
market, sell and/or market any new products developed from the intellectual property rights licensed by Cardinal Health 414 to the
Company by the License-Back.

As part of the Asset Sale, the Company and Cardinal Health 414 also entered into ancillary agreements providing for transitional services
and other arrangements. The Company amended and restated its license agreement with The Regents of the University of California, San
Diego (“UCSD”) pursuant to which UCSD granted a license to the Company to exploit certain intellectual property rights owned by UCSD
and, separately, Cardinal Health 414 entered into a license agreement with UCSD pursuant to which UCSD granted a license to Cardinal
Health 414 to exploit certain intellectual property rights owned by UCSD for Cardinal Health 414 to sell the Product in the Territory.

In exchange for the Acquired Assets, Cardinal Health 414 (i) made a cash payment to the Company at closing of approximately $80.6
million after adjustments based on inventory being transferred and an advance of $3.0 million of guaranteed earnout payments as part of
the CRG settlement (described below in Item 3 – Legal Proceedings), (ii) assumed certain liabilities of the Company associated with the
Product as specified in the Purchase Agreement, and (iii) agreed to make periodic earnout payments (to consist of contingent payments and
milestone payments which, if paid, will be treated as additional purchase price) to the Company based on net sales derived from the
purchased Product subject, in each case, to Cardinal Health 414’s right to off-set. In no event will the sum of all earnout payments, as
further described in the Purchase Agreement, exceed $230 million over a period of ten years, of which $20.1 million are guaranteed
payments for the three years immediately after closing of the Asset Sale. At the closing of the Asset Sale, $3 million of such earnout
payments were advanced by Cardinal Health 414 to the Company, and paid to Capital Royalty Partners II L.P. (“CRG”) as part of the
Deposit Amount paid to CRG (described below in Item 3 – Legal Proceedings).

Upon closing of the Asset Sale, the Supply and Distribution Agreement, dated November 15, 2007 (as amended, the “Supply and
Distribution Agreement”), between Cardinal Health 414 and the Company was terminated and, as a result, the provisions thereof are of no
further force or effect (other than any indemnification, payment, notification or data sharing obligations which survive the termination). At
the closing of the Asset Sale, Cardinal Health 414 paid to the Company $1.2 million, as an estimate of the accrued revenue sharing
payments owed to the Company as of the closing date, net of prior payments.

The Asset Sale to Cardinal Health 414 in March 2017 significantly improved our financial condition and our ability to continue as a going
concern. The Company also continues working to establish new sources of non-dilutive funding, including collaborations and grant
funding that can augment the balance sheet as the Company works to reduce spending to levels that can be supported by our revenues.

Other than Tc99m tilmanocept, which the Company has a license to distribute outside of Canada, Mexico and the United States, none of
the Company’s drug product candidates have been approved for sale in any market.

We manage our business based on two primary types of drug products: (i) diagnostic substances, including Tc99m tilmanocept and other
diagnostic applications of our Manocept platform, our R-NAV joint venture (terminated on May 31, 2016), NAV4694 and NAV5001
(license terminated in April 2015), and (ii) therapeutic development programs, including therapeutic applications of our Manocept platform
and all development programs undertaken by Macrophage Therapeutics, Inc. See Note 21 to the consolidated financial statements for more
information about our business segments.

Our History

We were originally incorporated in Ohio in 1983 and reincorporated in Delaware in 1988. From inception until January 2012, we operated
under the name Neoprobe Corporation. In January 2012, we changed our name to Navidea Biopharmaceuticals, Inc. in connection with
both the sale of our medical device business and our strategic repositioning as a precision medicines company focused on “NAVigating
IDEAs” that result in the development and commercialization of precision diagnostic and therapeutic pharmaceuticals.

Since our inception, the majority of our efforts and resources have been devoted to the research and clinical development of
radiopharmaceutical technologies primarily related to the intraoperative diagnosis and treatment of cancers. From the late 1990’s through
2011, we also devoted substantial effort towards the development and commercialization of medical devices, including a line of handheld
gamma detection devices which was sold in 2011 and a line of blood flow measurement devices which we operated from 2001 through
2009.

From our inception through August 2011, we manufactured a line of gamma radiation detection medical devices called the neoprobe ®
GDS system (the “GDS Business”). We sold the GDS Business to Devicor Medical Products, Inc. (“Devicor”) in August 2011. In
exchange for the assets of the GDS Business, Devicor made net cash payments to us totaling $30.3 million, assumed certain liabilities of
the Company associated with the GDS Business, and agreed to make royalty payments to us of up to an aggregate maximum amount of
$20.0 million based on the net revenue attributable to the GDS Business through 2017. Based on the 2015 GDS Business revenue, we
earned royalty payments of $1.2 million. We did not earn any such royalty payments prior to 2015 or in 2016 and 2017.

Following the sale of the GDS business and the subsequent strategic repositioning as a precision medicines company, the Company in-
licensed the two neuro-tracer product candidates, NAV4694 and NAV5001. The Company progressed the development of both product
candidates over the course of 2012 through 2014, moving both into Phase 3 clinical trials. However, in May 2014, the Navidea Board
announced that, based on its belief that the public markets were not giving appropriate value to its Phase 3 pipeline products and were
likely penalizing the Company for allocating resources to these programs, the Company would be restructuring its development efforts to
focus on cost effective development of the Manocept platform while it sought development partners for NAV4694 and NAV5001. In April
2015, the Company entered into an agreement with Alseres Pharmaceuticals, Inc. (“Alseres”) to terminate the NAV5001 sub-license
agreement. The Company is currently engaged in discussions related to the potential partnering or divestiture of NAV4694.

In December 2014, we announced the formation of a new business unit to further explore therapeutic applications for the Manocept
platform, which was incorporated as Macrophage Therapeutics, Inc. (“MT”) in January 2015 as a majority-owned subsidiary. MT has
developed preliminary processes for producing the first several therapeutic Manocept immunoconstructs in the MT-1000 drug line,
designed to specifically target and kill activated CD206+ macrophages, and the MT-2000 line, which are designed to inhibit the
inflammatory activity of activated CD206+ macrophages. The first of these constructs are MT-1001 and MT-2001, both developed from
the Manocept platform technology and the efforts of Navidea’s development team and contain a similar chemical scaffold and targeting
moieties designed to selectively target CD206+ macrophages. A payload of a select therapeutic molecule is conjugated to each
immunoconstruct through a linkage that will release the molecule within the targeted tissue: MT-1001 contains doxorubicin moieties (an
anthracycline antitumor antibiotic) conjugated to the Manocept backbone and MT-2001 contains a potent anti-inflammatory agent. MT has
contracted with independent facilities to produce sufficient quantities of the MT-1000 and MT-2000 class agents along with the
concomitant analytical standards, to provide material for planned preclinical animal studies and future clinical trials.

Our Technology and Product Candidates

Our primary development efforts over the last several years were focused on diagnostic products, including Lymphoseek which was sold to
Cardinal Health 414 in March 2017. Our more recent initiatives have been focused exclusively on diagnostic and therapeutic line
extensions based on our Manocept platform.

The flexible and versatile Manocept acts as a platform molecular engine for the design of targeted imaging molecules applicable to a range
of diagnostic modalities, including single photon emission computed tomography (“SPECT”), positron emission tomography (“PET”),
gamma-scanning (both imaging and topical) and intra-operative and/or optical-fluorescence detection. Active clinical diagnostic programs
in several diseases (discussed below) representing specific macrophage activation states are ongoing.

Cardiovascular Disease (“CV”) – A nine-subject study to evaluate diagnostic imaging of emerging atherosclerosis plaque with the Tc99m
tilmanocept product dosed subcutaneously was completed (ClinicalTrials.gov NCT02542371). The results of this study were presented at
two major international meetings (Conference on Retroviruses and Opportunistic Infections (“CROI”) and Society of Nuclear Medicine
and Molecular Imaging (“SNMMI”), 2017) and published in early release in the Journal of Infectious Diseases in January 2017 (published
in the circulated version, Journal of Infectious Diseases (2017) 215 (8): 1264-1269), confirming that the Tc99m tilmanocept product can
both quantitatively and qualitatively target non-calcified plaque in the aortic arch of Acquired Immunodeficiency Syndrome (“AIDS”)
patients (supported by NIH/NHLBI Grant 1 R43 HL127846-01). We have also begun a second Phase1/2 study in cooperation with
Massachusetts General Hospital. This study expands the initial investigation to the assessment of not only aortic plaque but also carotid and
coronary arteries. In addition, we have applied for follow-on NIH/NHLBI support to fund additional clinical studies. These studies are
currently under development and design for Phase 2 trials.

Rheumatoid Arthritis (“RA”) – Two Tc99m tilmanocept dose escalation studies in RA have been initiated. The first study, now complete
(ClinicalTrials.gov NCT02683421), included 18 subjects (nine with active disease and nine healthy subjects) dosed subcutaneously with
50 and 200 µg/2mCi Tc99m tilmanocept. The results of this study were presented at three international meetings, including Biotechnology
Innovation Organization (“BIO”), SNMMI, and The American College of Rheumatology (“ACR”), 2017. This study is submitted for peer
review publication. In addition, based on completion of extensive preclinical dosing studies pursuant to our dialog with the FDA, we have
completed a study involving intravenous (“IV”) dosing of Tc99m tilmanocept (ClinicalTrials.gov NCT02865434). In conjunction with this
study, we have completed pharmacokinetic (“PK”) and pharmacodynamics (“PD”) phases in human subjects as well. The majority of the
studies have been supported through a Small Business Innovation Research (“SBIR”) grant (NIH/NIAMSD Grant 1 R44 AR067583-
01A1). We anticipate a presentation of the results at the 2018 SNMMI meeting and full published results thereafter.

Kaposi’s Sarcoma (“KS”) – Although we initiated and completed a study of KS in 2015 (ClinicalTrials.gov NCT022201420), we received
additional funding from the National Institutes of Health (“NIH”) in 2016 to continue both diagnostic and therapeutic studies in this
disease. The new support not only continues the imaging of the cutaneous form of this disease but expands this to imaging of visceral
disease via IV administration of Tc99m tilmanocept (NIH/NCI 1 R44 CA192859-01A1; ClinicalTrials.gov NCT03157167). Additionally,
we received funding to support the therapeutic initiative for KS employing a select form of the MT-1001.3 agent under current evaluation.
The Company has already completed a portion of the Phase 1 SBIR portion of this award (NIH/NCI 1 R44 CA206788-01) and will
complete Phase 2 of the award with FDA investigational new drug (“IND”) filing.

Colorectal Cancer (“CRC”) and Synchronous Liver Metastases – During the first quarter of 2017, we initiated an imaging study in subjects
with CRC and liver metastases via IV administration of Tc99m tilmanocept. This study has results but will continue to enroll subjects (up
to 12 subjects with dose modification; this study may also be expanded depending on NIH/NCI funding). This study is supported through a
SBIR grant (NIH/NCI 1 R44 CA1962783-01A1; ClinicalTrials.gov NCT03029988).

Nonalcoholic Steatosis Hepatitis (“NASH”) – Navidea has initiated a study in the imaging of NASH. This study (ClinicalTrials.gov
NCT03332940) is designed to enroll 12 subjects with IV administration of Tc99m tilmanocept and an imaging comparator, and includes
dose escalation modification for Tc99m tilmanocept. This study is ongoing and has results which will be reported later in the year.

Based on performance in these very large market opportunities, the Company anticipates continued investment in these programs,
including initiating studies designed to obtain new approvals for the Tc99m tilmanocept product.

The Company has completed further preclinical studies employing both MT 1000-class and 2000-class therapeutic conjugates of
Manocept. The positive results from these studies are indicative of Manocept’s specific targeting supported by its strong binding affinity to
CD206 receptors. This high degree of specificity is a foundation of the potential for this technology to be useful in treating diseases linked
to the over-activation of macrophages. This includes various cancers as well as autoimmune, infectious, CV, and central nervous system
(“CNS”) diseases. Our efforts in this area were further supported by the 2015 formation of MT, a majority-owned subsidiary that was
formed specifically to explore therapeutic applications for the Manocept platform. Results of these preclinical efforts will be published
later this year pending the conclusion of intellectual property applications.

MT has been set up to pursue the therapeutic drug delivery model. This model enables the Company to leverage its technology over many
potential disease applications and with multiple partners simultaneously without significant capital outlays. To date, the Company has
developed two lead families of therapeutic products. The MT-1000 class is designed to deplete activated macrophages via apoptosis. The
MT-2000 class is designed to modulate activated macrophages from a classically activated phenotype to the alternatively activated
phenotype. Both families have been tested in a number of disease models in rodents.

We continue to seek to partner or out-license NAV4694. On October 26, 2017, the Company executed a letter of intent with Hainan
Sinotau Pharmaceutical Co., Ltd. (“Sinotau”) and Cerveau Technologies, Inc. (“Cerveau”), outlining a plan to sublicense to Cerveau the
worldwide rights to conduct research using NAV4694, as well as grant to Cerveau an exclusive license for the development, marketing and
commercialization of NAV4694 in Australia, Canada, People’s Republic of China (“China”) and Singapore. The letter of intent includes a
provision stating that Sinotau will release all claims in the Sinotau Litigation upon the parties’ execution of a definitive agreement; the
commercial rights agreement contemplated by the letter of intent would also include a release of such claims and a covenant not to sue on
such claims. See Item 3 – Legal Proceedings.

The NAV5001 sublicense was terminated in April 2015.

Manocept Platform - Diagnostics and Therapeutics Background

Navidea’s Manocept platform is predicated on the ability to specifically target the CD206 mannose receptor expressed on activated
macrophages. Activated macrophages play important roles in many disease states and are an emerging target in many diseases where
diagnostic uncertainty exists. This flexible and versatile platform serves as an engine for purpose-built molecules that may significantly
impact patient care by providing enhanced diagnostic accuracy, clinical decision-making, and target-specific treatment. This disease-
targeted drug platform provides the capability to utilize a breadth of diagnostic modalities, including SPECT, PET, gamma-scan (both
imaging and topical), intra-operative and/or optical-fluorescence detection, as well as delivery of therapeutic compounds that target
macrophages, and their role in a variety of immune- and inflammation-based disorders. The FDA-approved sentinel node/lymphatic
mapping agent, Tc99m tilmanocept, is representative of the ability to successfully exploit this mechanism to develop powerful new
products and to expand this technology application into commercially advantageous markets.

Impairment of the macrophage-driven disease mechanisms is an area of increasing and proven focus in medicine. The number of people
affected by all the inflammatory diseases combined is estimated at more than 40 million in the United States and perhaps 700 million
worldwide, making macrophage-mediated diseases an area of remarkable clinical importance. There are many recognized disorders having
macrophage involvement, including RA, atherosclerosis/vulnerable plaque, nonalcoholic steatohepatitis (“NASH”), inflammatory bowel
disease, systemic lupus erythematosus, KS, and others that span clinical areas in oncology, autoimmunity, infectious diseases, cardiology,
CNS diseases, and inflammation.

In July 2014, the Company completed a license agreement with UCSD for the exclusive world-wide rights in all diagnostic and therapeutic
uses of tilmanocept, except for the use of Tc99m tilmanocept in Canada, Mexico and the United States, which rights have been licensed
directly to Cardinal Health 414 by UCSD in connection with the Asset Sale. The license agreement is effective until the third anniversary
of the expiration date of the longest-lived underlying patent. Under the terms of the license agreement, UCSD has granted Navidea the
exclusive rights to make, use, sell, offer for sale and import licensed products for all diagnostic and therapeutic uses as defined in the
agreement and to practice the defined licensed methods during the term of the agreement. Navidea may also sublicense the patent rights,
subject to certain sublicense terms as defined in the agreement. As consideration for the license rights, Navidea agreed to pay UCSD a
license issue fee of $25,000 and license maintenance fees of $25,000 per year. We also agreed to make payments to UCSD upon
successfully reaching certain clinical, regulatory and cumulative sales milestones, and a royalty on net sales of licensed products subject to
a $25,000 minimum annual royalty. Navidea also agreed to reimburse UCSD for all patent-related costs and to meet certain diligence
targets.

Manocept Platform – Immuno-Diagnostics Clinical Data

Rheumatoid Arthritis

In conjunction with the agreed submission of an IND amendment for IV administration of tilmanocept to the FDA, we initiated a multi-
center Phase 1/2 registrational trial employing IV administration to evaluate tilmanocept for the primary diagnosis of RA and to aid in the
differential diagnosis of RA from other types of inflammatory arthritis. The first subject was dosed and imaged in February 2017. This
study is complete and includes PK and PD cohorts as well as dose escalation subjects (ClinicalTrials.gov NCT02865434; Study supported
by NIH/NIAMSD Grant 1 R44 AR067583-01A1).

Cardiovascular Disease

Results of our studies to date (ClinicalTrials.gov NCT02542371) provide strong evidence of the potential of Tc99m tilmanocept to
accumulate in high risk morphology plaques, the ability to make preliminary comparisons of aortic Tc99m tilmanocept uptake by
SPECT/CT in clinically symptomatic patients vs. healthy age-matched subjects, and to evaluate the ability of Tc99m tilmanocept to
identify the same aortic atherosclerotic plaques that are identified by contrast enhanced coronary computed tomography angiography
and/or PET/CT. A second study has been initiated in subjects with Human Immunodeficiency Virus (“HIV”) that greatly expands the
original study in both the scope of the drug administration as well as the diagnostic assessment of the subjects. We anticipate results in the
second or third quarter of 2018.

Nonalcoholic Steatohepatitis

The Company has initiated a clinical study examining the safety and efficacy of Tc99m radiolabel escalation of IV-injected Tc99m
tilmanocept in SPECT/CT imaging studies to identify and quantify the extent of NASH lesions in human patients. The study already has
results and we anticipate presenting some limited results in during the first half of 2018 (ClinicalTrials.gov NCT03332940).

Other Immuno-Diagnostic Applications

The Company has received an award for a Fast Track SBIR grant providing for up to $1.8 million from the NIH ’s National Cancer
Institute to fund preclinical studies examining the safety of IV injection of Tc99m tilmanocept, a Manocept platform product, followed by
a clinical study providing the initial evaluation of the safety and efficacy of SPECT/CT imaging studies with IV Tc99m tilmanocept to
identify and quantify both skin- and organ-associated KS lesions in human patients. The grant is awarded in two parts with the potential for
total grant money of up to $1.8 million over two and a half years. The first six-month funding segment of $300,000, which has already
been awarded, enabled Navidea to secure necessary collaborations and Institutional Review Board approvals. We have now been awarded
the remaining portion of the second funding segment, which provided an additional $1.5 million to accrue participants, perform the Phase
1/2 study and perform data analyses to confirm the safety and effectiveness of intravenously administered Tc99m tilmanocept. We
received Institutional Review Board approval of the clinical protocol, and we initiated a Phase 1/2 clinical study in KS in 2017.

Biomarker Application and Qualification

In November 2017, the Company commenced the qualification of the biomarker CD206 with the FDA Biomarker Section of The Center
for Drug Evaluation and Research (“CDER”). As per FDA protocol, Navidea submitted a draft letter of intent (“LOI”) to CDER prior to
the November meeting. According to the CDER directive, “the Biomarker Qualification Program was established to support the CDER’s
work with external stakeholders to develop biomarkers that aid in the drug development process. Through the FDA’s Biomarker
Qualification Program, an entity may request regulatory qualification of a biomarker for a particular context of use (“COU”) in drug
development.” Post-meeting with the FDA and because of Navidea’s overwhelming data sets and the general external publication
database, Navidea, in conjunction with FDA, is now reviewing the LOI with the FDA’s recommended consultants. Navidea is revising the
LOI draft strategy in order to expedite the application process. Since the meeting, Navidea has gathered extensive new data that bear on
this qualification strategy. On March 1, 2018, Navidea had a follow-up meeting with the FDA’s assigned strategist and further narrowing
of the LOI elements were reviewed. Navidea is continuing the process of finalizing the LOI COU and providing the background data sets
for qualification review with the FDA/CDER.

Macrophage Therapeutics Background

In December 2014, the Company formed a new business unit to further explore therapeutic applications for the Manocept platform. In
January 2015, Navidea incorporated the business unit as MT, a majority-owned subsidiary of Navidea. Navidea also granted MT an
exclusive license for certain therapeutic applications of the Manocept technology.

MT has developed processes for producing the first two therapeutic Manocept immuno-constructs, MT-1002, designed to specifically
target and kill activated CD206+ macrophages by delivering doxorubicin, and MT-2002, designed to inhibit the inflammatory activity of
activated CD206+ macrophages by delivering a potent anti-inflammatory agent. MT has contracted with independent facilities to produce
sufficient quantities of the MT-1002 and MT-2002 agents along with the concomitant analytical standards, to provide material for planned
preclinical animal studies and future clinical trials.

Manocept Platform – In-Vitro and Pre-Clinical Immunotherapeutics Data

The novel MT-1002 construct is designed to specifically deliver doxorubicin, a chemotoxin, which can kill KS tumor cells and their
tumor-associated macrophages potentially altering the course of cancer. KS is a serious and potentially life threatening illness in persons
infected with HIV and the third leading cause of death in this population worldwide. The prognosis for patients with KS is poor with high
probabilities for mortality and greatly diminished quality of life. The funds for this Fast Track grant will be released in three parts, which
together have the potential to provide up to $1.8 million in resources over 2.5 years with the goal of completing an IND submission for a
Manocept construct (MT-1000 class of compounds) consisting of tilmanocept linked to doxorubicin for the treatment of KS. The first part
of the grant provided $232,000 to support analyses including in vitro and cell culture studies now complete and will be followed by Part 2
and 3 FDA-required preclinical animal testing studies. The information from these studies will be combined with other information in an
IND application that will be submitted to the FDA requesting permission to begin testing the compound in selected KS subjects (supported
by NIH/NCI 1 R44 CA206788-01).

Navidea and MT continue to evaluate emerging data in other disease states to define areas of focus, development pathways and partnering
options to capitalize on the Manocept platform, including ongoing studies in KS, RA and infectious diseases. The immuno-inflammatory
process is remarkably complex and tightly regulated with indicators that initiate, maintain and shut down the process. Macrophages are
immune cells that play a critical role in the initiation, maintenance, and resolution of inflammation. They are activated and deactivated in
the inflammatory process. Because macrophages may promote dysregulation that accelerates or enhances disease progression, diagnostic
and therapeutic interventions that target macrophages may open new avenues for controlling inflammatory diseases. There can be no
assurance that further evaluation or development will be successful, that any Manocept platform product candidate will ultimately achieve
regulatory approval, or if approved, the extent to which it will achieve market acceptance.

Navidea and MT have already reported on the peripheral infectious disease aspects of KS, including HIV and HHV8 (CROI, Boston 2016,
and KS HHV8 Summit Miami 2015). As noted Navidea and MT continue this work funded by the NIH/NIAID and NCI.

Nonalcoholic fatty liver disease (“NAFLD”) is a spectrum of liver disorders and is defined by the presence of steatosis in more than 5% of
hepatocytes with little or no alcohol consumption. NASH is the most extreme form of NAFLD. A major characteristic of NASH involves
cells undergoing lipotoxicity, releasing endogenous signals prompting the accumulation of various macrophages to assess the damage.
Studies have shown that levels of endogenous molecular inflammatory signals positively correlate with inflammation, hepatocyte
ballooning, and other NAFLD symptoms. Navidea and MT have developed a molecular delivery technology capable of targeting only the
disease-causing macrophages by selectively binding to the CD206 receptor. Selective binding and efficient delivery of this agent mitigates
the potential of affecting the neighboring cells or interfering more broadly with the normal function of the immune system.

We have completed four in vivo studies employing our MT-1002 and MT-2002 Manocept conjugates in a well-established mouse model of
NAFLD/NASH and liver fibrosis. The NALFD scores, which correlate to the agents’ effectiveness, were significantly reduced, with all the
activity related to inflammation and “ballooning” scores. Fibrosis decreased significantly when compared to the control in the later dosing
arm of the study. Liver weights did not differ during any phase of the study between control and agent-treated groups, nor was there any
evidence of damage to the roughly 30% of the liver made up of un-activated macrophages called Kupffer cells. MT-1002 and MT-2002
both significantly reduced key disease assessment parameters in the in vivo STAMTM NASH model. We believe these agents present
themselves as potential clinically effective candidates for further evaluation. We continue to use this model to further assess the activity of
our agents.

We have completed an expanded series of predictive in vitro screening tests of the MT-1002 and MT-2002 therapeutic conjugates against
the Zika and Dengue viruses, which included infectivity and viral replication inhibition effectiveness as well as dose finding studies and
mechanisms of action, the latter based on conjugate structures. We have also completed a series of predictive in vivo screening tests of the
MT-1002 and MT-2002 therapeutic conjugates against Leishmaniosis, which included host cell targeting and killing effectiveness as well
as dose finding studies and mechanisms of action. A portion of the results from the in vivo Leishmaniosis study, completed in conjunction
with the National Institute of Allergy and Infectious Diseases/NIH, was recently published in the Journal of Experimental Medicine
(published in the circulated version Journal of Experimental Medicine 2018 Jan 2;215(1):357-375). The results from all evaluations were
positive and have provided a basis for moving forward with additional in vivo testing of the selected conjugates. We have selected
collaborators for these in vivo studies, which we expect will take place over the next four to six months. We will provide updates as
information becomes available on future testing. However, we cannot assure you that further evaluation or development will be successful,
that any Manocept platform product candidate will ultimately achieve regulatory approval, or if approved, the extent to which it will
achieve market acceptance. See Risk Factors.

NAV4694 (Candidate for Divestiture)

NAV4694 is a fluorine-18 (“F-18”) labeled PET imaging agent being developed as an aid in the imaging and evaluation of patients with
signs or symptoms of Alzheimer’s disease (“AD”) and mild cognitive impairment (“MCI”). NAV4694 binds to beta-amyloid deposits in
the brain that can then be imaged in PET scans. Amyloid plaque pathology is a required feature of AD and the presence of amyloid
pathology is a supportive feature for diagnosis of probable AD. Patients who are negative for amyloid pathology do not have AD.
NAV4694 has been studied in rigorous pre-clinical studies and clinical trials in humans. Clinical studies through Phase 3 have included
subjects with MCI, suspected AD patients, and healthy volunteers. Results suggest that NAV4694 has the potential ability to image
patients quickly and safely with high sensitivity and specificity.

In May 2014, the Board of Directors made the decision to refocus the Company's resources to better align the funding of our pipeline
programs with the expected growth in Tc99m tilmanocept revenue. This realignment primarily involved reducing our near-term support
for our neurological product candidates, including NAV4694, as we sought a development partner or partners for these programs.
Discussions related to the potential partnering or divestiture of NAV4694 were delayed due in large part to litigation brought by Sinotau,
one of the potential partners. In August 2015, Sinotau filed a suit for damages, specific performance, and injunctive relief against the
Company in the U.S. District Court for the District of Massachusetts alleging breach of a letter of intent for licensing to Sinotau of the
Company’s NAV4694 product candidate and technology. In September 2016, the Court denied the Company’s motion to dismiss. The
Company filed its answer to the complaint and the parties have filed multiple joint motions to stay the case pending settlement discussion,
which to date have been granted. On October 26, 2017, the Company executed a letter of intent with Sinotau and Cerveau, outlining a
plan to sublicense to Cerveau the worldwide rights to conduct research using NAV4694, as well as grant to Cerveau an exclusive license
for the development, marketing and commercialization of NAV4694 in Australia, Canada, China and Singapore. The letter of intent
includes a provision stating that Sinotau will release all claims in the Sinotau Litigation upon the parties’ execution of a definitive
agreement; the commercial rights agreement contemplated by the letter of intent would also include a release of such claims and a
covenant not to sue on such claims.

NAV5001 (In-License Terminated)

NAV5001 is an iodine-123 labeled SPECT imaging agent being developed as an aid in the diagnosis of Parkinson’s disease (“PD”) and
other movement disorders, with potential use as a diagnostic aid in dementia. The agent binds to the dopamine transporter (“DAT”) on the
cell surface of dopaminergic neurons in the striatum and substantia nigra regions of the brain. Loss of these neurons is a hallmark of PD.
In addition to its potential use as an aid in the differential diagnosis of PD and movement disorders, NAV5001 may also be useful in the
diagnosis of Dementia with Lewy Bodies, one of the most common forms of dementia after AD.

In May 2014, the Board of Directors decided to refocus the Company's resources to better align the funding of our pipeline programs with
the expected growth in Lymphoseek revenue. This realignment primarily involved reducing our near-term support for our neurological
product candidates, including NAV5001.

In April 2015, the Company entered into an agreement with Alseres to terminate the sub-license agreement, dated July 31, 2012, for
research, development and commercialization of NAV5001. Under the terms of this agreement, Navidea transferred all regulatory, clinical
and manufacturing-related data related to NAV5001 to Alseres. Alseres agreed to reimburse Navidea for any incurred maintenance costs
of the contract manufacturer retroactive to March 1, 2015. In addition, Navidea has supplied clinical support services for NAV5001 on a
cost-plus reimbursement basis. However, to this point, Alseres has been unsuccessful in raising the funds necessary to restart the program
and reimburse Navidea. As a result, we have taken steps to end our obligations under the agreement and notified Alseres that we consider
them in breach of the agreement. To date, we have not been successful in our efforts to recover the funds we expended complying with our
obligations under the termination agreement.

Market Overview

Tc99m Tilmanocept – Cancer Market Overview

Cancer is the second leading cause of death in both the United States and Europe. The American Cancer Society (“ACS”) estimates that
cancer will cause over 600,000 deaths in 2018 in the United States alone. Additionally, the ACS estimates that approximately 1.7 million
new cancer cases will be diagnosed in the United States during 2018. For the types of cancer to which our oncology agents may be
applicable (breast, melanoma, head and neck, prostate, lung, colorectal, gastrointestinal and gynecologic), the ACS has estimated that over
1.2 million new cases will occur in the United States in 2018. The Agency for Healthcare Research and Quality has estimated that the
direct medical costs for cancer in the United States for 2015 were $80.2 billion.

Currently, the application of intraoperative lymphatic mapping (“ILM”) is most established in breast cancer. Breast cancer is the second
leading cause of death from cancer among all women in the United States The probability of developing breast cancer generally increases
with age, rising from about 1.9% in women under age 49 to 6.8% in women age 70 or older. According to the ACS, over 268,000 new
cases of breast cancer are expected to be diagnosed during 2018 in the United States alone.

The use of ILM is also common in melanoma. The ACS estimates that approximately 91,000 new cases of melanoma will be diagnosed in
the United States during 2018. In addition to breast cancer and melanoma, we believe that our oncology products may have utility in other
cancer types with another 806,000 new cases expected during 2018 in the United States.

If the potential of Tc99m tilmanocept as a radioactive tracing agent is ultimately realized, it may address not only the breast and melanoma
markets on a procedural basis, but also assist in the clinical evaluation and staging of solid tumor cancers and expanding lymph node
mapping to other solid tumor cancers such as prostate, gastric, colon, head and neck, gynecologic, and non-small cell lung. Tc99m
tilmanocept is approved by the FDA for use in solid tumor cancers where lymphatic mapping is a component of surgical management and
for guiding sentinel lymph node biopsy in patients with clinically node negative breast cancer, melanoma or squamous cell carcinoma of
the oral cavity. Tc99m tilmanocept has also received European approval in imaging and intraoperative detection of sentinel lymph nodes
in patients with melanoma, breast cancer or localized squamous cell carcinoma of the oral cavity.

Manocept Diagnostics and Macrophage Therapeutics Market Overview

Impairment of the macrophage-driven disease mechanism is an area of increasing focus in medicine. There are many recognized disorders
having macrophage involvement, including RA, atherosclerosis/vulnerable plaque, Crohn’s disease, TB, systemic lupus erythematosus,
KS, and others that span clinical areas in oncology, autoimmunity, infectious diseases, cardiology, and inflammation. The number of
people affected by all the inflammatory diseases combined is estimated at more than 40 million in the United States and perhaps 700
million worldwide, making these macrophage-mediated diseases an area of remarkable clinical importance. RA alone affects over 1.3
million people in the United States and as much as 1% of the worldwide population. Data from studies using agents from the Manocept
platform in RA, KS and TB were published in a special supplement, Nature Outlook: Medical Imaging, in Nature’s October 31, 2013
issue. The supplement included a White Paper by Navidea entitled “Innovations in receptor-targeted precision imaging at Navidea:
Diagnosis up close and personal,” focused on the Manocept platform.

NAV4694 - Alzheimer’s Disease Market Overview

The Alzheimer’s Association (“AA”) estimates that more than 5.5 million Americans had AD in 2017. On a global basis, Alzheimer’s
Disease International estimated in 2015 that there were 46.8 million people living with dementia, and this number is believed to be close to
50 million people in 2017. This number is expected to almost double every 20 years, reaching 75 million in 2030 and over 130 million in
2050. AA estimates that total costs for AD care was approximately $259 billion in 2017. AA also estimates that there are over 15 million
AD and dementia caregivers providing 18.2 billion hours of unpaid care valued at over $230 billion. AD is the sixth-leading cause of death
in the U.S. and the only cause of death among the top 10 in the U.S. that cannot be prevented, cured or even slowed. Based on U.S.
mortality data from 2000-2014, deaths from AD have risen 89 percent while deaths attributed to the number one cause of death, heart
disease, decreased 14 percent during the same period.

Marketing and Distribution

Unlike the United States, where institutions typically rely on radiopharmaceutical products which are compounded and delivered by
specialized radiopharmacy distributors such as Cardinal Health 414, institutions in Europe predominantly purchase non-radiolabeled
material and compound the radioactive product on-site. With respect to Tc99m tilmanocept commercialization in Europe, we have chosen
a specialty pharmaceutical strategy that should be supportive of premium product positioning and reinforce Tc99m tilmanocept's clinical
value proposition, as opposed to a commodity or a generics positioning approach. In March 2015, we entered into an exclusive sublicense
agreement for the commercialization and distribution of a 50 microgram kit for radiopharmaceutical preparation (tilmanocept) in the
European Union (“EU”) with SpePharm AG (an affiliate of Norgine BV), a European specialist pharmaceutical company with an extensive
pan-European presence. Under the terms of the exclusive license agreement, Navidea transferred responsibility for regulatory maintenance
of the Tc99m tilmanocept Marketing Authorization to SpePharm in January 2017. SpePharm is also responsible for production,
distribution, pricing, reimbursement, sales, marketing, medical affairs, and regulatory activities. In connection with entering into the
agreement, Navidea received an upfront payment of $2.0 million, and is entitled to milestones totaling up to an additional $5.0 million and
royalties on European net sales. The initial territory covered by the agreement includes all 28 member states of the European Economic
Community with the option to expand into additional geographical areas. During the second quarter of 2017, SpePharm launched Tc99m
tilmanocept in select EU markets, providing a number of early adopters with sample doses to provide exposure to the product. EU sales
commenced during the third quarter of 2017.

In August 2014, Navidea entered into an exclusive agreement with Sinotau, a pharmaceutical organization with a broad China focus in
oncology and other therapeutic areas, who will develop and commercialize Tc99m tilmanocept in China. In exchange, Navidea will earn
revenue based on unit sales to Sinotau, royalties based on Sinotau’s sales of Tc99m tilmanocept and milestone payments from Sinotau,
including a $300,000 non-refundable upfront payment. As part of the agreement, Sinotau is responsible for costs and conduct of clinical
studies and regulatory applications to obtain Tc99m tilmanocept approval by the China Food and Drug Administration (“CFDA”). Upon
approval, Sinotau will be responsible for all Tc99m tilmanocept sales, marketing, market access and medical affairs activities in China and
excluding Hong Kong, Macau and Taiwan. Navidea and Sinotau will jointly support certain pre-market planning activities with a joint
commitment on clinical and market development programs pending CFDA approval. On February 1, 2017, Navidea filed a suit against
Sinotau, and on February 2, 2017, Sinotau filed a suit against the Company and Cardinal Health 414. On February 8, 2018, Navidea and
Sinotau executed an amendment to the agreement, modifying certain terms of the agreement and effectively resolving the legal dispute.
On February 17, 2018, Navidea and Sinotau executed a Settlement Agreement and Mutual Release, and on February 20, 2018, Navidea
and Sinotau voluntarily dismissed their legal cases. See Item 3 – Legal Proceedings.

In June 2017, Navidea entered into an exclusive license and distribution agreement with Sayre Therapeutics (“Sayre”) for the development
and commercialization of Tc99m tilmanocept in India. Sayre specializes in innovative treatments and medical devices commercialization
in South Asia. Under the terms of the agreement, Navidea received a $100,000 upfront payment and is eligible to receive milestone
payments and double-digit royalties associated with the sale of Tc99m tilmanocept in India. Tc99m tilmanocept has not yet received
marketing approval in India.

Tc99m tilmanocept is in various stages of approval in other global markets and sales to this point in these markets, to the extent there were
any, have not been material. However, we believe that with international partnerships to complement our positions in the EU, China and
India, we will help establish Tc99m tilmanocept as a global leader in lymphatic mapping, as we are not aware of any other company that
has a global geographic range. However, it is possible that Tc99m tilmanocept will never achieve regulatory approval in any market
outside the U.S. or EU, or if approved, that it may not achieve market acceptance in any market. We may also experience difficulty in
securing collaborative partners for other global markets or radiopharmaceutical products, or successfully negotiating acceptable terms for
such arrangements. See Risk Factors.

Manufacturing

We currently use and expect to continue to be dependent upon contract manufacturers to manufacture each of our product candidates. We
have established a quality control and quality assurance program, including a set of standard operating procedures and specifications with
the goal that our products and product candidates are manufactured in accordance with current good manufacturing practices (“cGMP”)
and other applicable domestic and international regulations. We may need to invest in additional manufacturing and supply chain
resources, and may seek to enter into additional collaborative arrangements with other parties that have established manufacturing
capabilities. It is likely that we will continue to rely on third-party manufacturers for our development and commercial products on a
contract basis.

In November 2009, we completed a Manufacture and Supply Agreement with Reliable Biopharmaceutical Corporation (“Reliable”) for the
manufacture of the bulk drug substance with an initial term of 10 years. In September 2013, we entered into a Manufacturing Services
Agreement with OSO BioPharmaceuticals Manufacturing, LLC (“OsoBio”) for contract pharmaceutical development, manufacturing,
packaging and analytical services for Tc99m tilmanocept. Also in September 2013, we completed a Service and Supply Master Agreement
with Gipharma S.r.l. (“Gipharma”) for process development, manufacturing and packaging of reduced-mass vials for sale in the EU. Upon
closing of the Asset Sale to Cardinal Health 414, our contracts with Reliable and OsoBio were transferred to Cardinal Health 414.
Similarly, following the transfer of the Tc99m tilmanocept Marketing Authorization to SpePharm, our contract with Gipharma was
transferred to SpePharm. We may not be successful in completing future agreements for the supply of Tc99m tilmanocept on terms
acceptable to the Company, or at all. See Risk Factors.

Competition

Competition in the pharmaceutical and biotechnology industries is intense. We face competition from a variety of companies focused on
developing oncology and neurology diagnostic drugs. We compete with large pharmaceutical and other specialized biotechnology
companies. We also face competition from universities and other non-profit research organizations. Many emerging medical product
companies have corporate partnership arrangements with large, established companies to support the research, development, and
commercialization of products that may be competitive with our products. In addition, a number of large established companies are
developing proprietary technologies or have enhanced their capabilities by entering into arrangements with or acquiring companies with
technologies applicable to the detection or treatment of cancer and other diseases targeted by our product candidates. Smaller companies
may also prove to be significant competitors, particularly through collaborative arrangements with large pharmaceutical and established
biotechnology companies. Many of these competitors have products that have been approved or are in development and operate large,
well-funded research and development programs. Many of our existing or potential competitors have substantially greater financial,
research and development, regulatory, marketing, and production resources than we have. Other companies may develop and introduce
products and processes competitive with or superior to ours.

We expect to encounter significant competition for our pharmaceutical products. Companies that complete clinical trials, obtain required
regulatory approvals and commence commercial sales of their products before us may achieve a significant competitive advantage if their
products work through a similar mechanism as our products and if the approved indications are similar. A number of biotechnology and
pharmaceutical companies are developing new products for the treatment of the same diseases being targeted by us. In some instances,
such products have already entered late-stage clinical trials or received FDA approval and may be marketed for some period prior to the
approval of our products.

We believe that our ability to compete successfully will be based on our ability to create and maintain scientifically advanced “best-in-
class” technology, develop proprietary products, attract and retain scientific personnel, obtain patent or other protection for our products,
obtain required regulatory approvals and manufacture and successfully market our products, either alone or through third parties. We
expect that competition among products cleared for marketing will be based on, among other things, product efficacy, safety, reliability,
availability, price, and patent position. See Risk Factors.

Tc99m Tilmanocept Competition

Surgeons who practice the lymphatic mapping procedure for which Tc99m tilmanocept is intended currently use other
radiopharmaceuticals such as a sulfur colloid or other colloidal compounds. In addition, some surgeons still use vital blue dyes to assist in
the visual identification of the draining lymphatic tissue around a primary tumor. In the EU and certain Pacific Rim markets, there are
colloidal-based compounds with various levels of approved labeling for use in lymphatic mapping, although a number of countries still
employ products used “off-label.”

NAV4694 Competition

Several potential competitive [18F] products have been approved for use as biomarkers to aid in detection of AD. Developed through Eli
Lilly’s wholly-owned Avid Radiopharmaceuticals, florbetapir, now known as Amyvid, received FDA approval to market in April 2012.
Florbetapir also received marketing authorization in the EU in January 2013. In addition to fluorbetapir, there are two other beta-amyloid
imaging agents available: florbetaben from Piramal Enterprises, Imaging Division, and flutemetamol from GE Healthcare. In October
2013, the FDA approved flutemetamol, under the name VizamylTM, for adults being evaluated for AD and dementia with PET brain
imaging. Florbetaben, now called NeuraceqTM, received EMA approval for use in PET imaging of the brain to estimate beta-amyloid
neuritic plaque density in adult patients with cognitive impairment who are being evaluated for AD and other causes of cognitive decline
from the EMA in February 2014 and from the FDA in March 2014.

Patents and Proprietary Rights

The patent position of biotechnology companies, including Navidea, generally is highly uncertain and may involve complex legal and
factual questions. Potential competitors may have filed applications, or may have been issued patents, or may obtain additional patents
and proprietary rights relating to products or processes in the same area of technology as that used by the Company. The scope and validity
of these patents and applications, the extent to which we may be required to obtain licenses thereunder or under other proprietary rights,
and the cost and availability of licenses are uncertain. Our patent applications or those licensed to us may not result in additional patents
being issued, and our patents or those licensed to us may not afford protection against competitors with similar technology; these patents
may be designed around by others or others may obtain patents that we would need to license or design around.

We also rely upon unpatented trade secrets. Others may independently develop substantially equivalent proprietary information and
techniques, or otherwise gain access to our trade secrets, or disclose such technology, or we may not be able to meaningfully protect our
rights to our unpatented trade secrets.

We require our employees, consultants, advisers, and suppliers to execute a confidentiality agreement upon the commencement of an
employment, consulting or manufacturing relationship with us. The agreement provides that all confidential information developed by or
made known to the individual during the course of the relationship will be kept confidential and not disclosed to third parties except in
specified circumstances. In the case of employees, the agreements provide that all inventions conceived by the individual will be the
exclusive property of our company. However, these agreements may not provide meaningful protection for our trade secrets in the event
of an unauthorized use or disclosure of such information. We also employ a variety of security measures to preserve the confidentiality of
our trade secrets and to limit access by unauthorized persons. However, these measures may not be adequate to protect our trade secrets
from unauthorized access or disclosure. See Risk Factors.

Tilmanocept Intellectual Property

Tilmanocept is under license from UCSD to Navidea for the exclusive world-wide rights in all diagnostic and therapeutic uses of
tilmanocept, except for the diagnostic use of Tc99m tilmanocept in Canada, Mexico and the United States, which rights have been
licensed directly to Cardinal Health 414 by UCSD in connection with the Asset Sale. Navidea maintains license rights to Tc99m
tilmanocept in the rest of the world, as well as a license to the intellectual property underlying the Manocept platform.

Tc99m tilmanocept and related compositions, including the Manocept backbone composition and methods of use, are the subject
of multiple patent families totaling 43 patents and patent applications in the United States and certain major foreign markets.

The first composition of matter patent covering tilmanocept was issued in the United States in June 2002. This patent will expire in May
2020, but a request for patent term extension has been filed to further extend the life of this patent. The claims of the composition of matter
patent covering tilmanocept have been allowed in the EU and issued in the majority of major-market EU countries in 2004. These patents
will expire in 2020, but a request for supplemental protection certificates are in process to further extend the life of these patents, and some
have been granted, extending the patent term to 2025. The composition of matter patent has also been issued in Japan, which will expire in
2020.

Patent applications have been filed in the U.S. and certain major foreign markets related to manufacturing processes for tilmanocept, the
first of which was issued in the U.S. in 2013. These patents and/or applications will expire between 2029 and 2032. Further patent
applications have been filed with The Ohio State Innovation Foundation related to CD206 expressing cell-related disorders. These patents
and/or applications would be expected to expire between 2034 and 2035. We have filed further patent applications related to 2-heteroaryl
substituted benzofurans. These patents and/or applications will expire between 2036 and 2037.

NAV4694 Intellectual Property

NAV4694 was being developed under an exclusive worldwide license from AstraZeneca. The NAV4694 license grants Navidea
commercialization rights to the fluorine-18 labeled biomarker for use as an aid in the diagnosis of AD. NAV4694 is the subject of 3 issued
patents in the U.S. and 29 patents issued or pending in 13 foreign jurisdictions covering the [18F]NAV4694 drug substance and the
NAV4694 precursor. These patents and/or applications will expire between 2028 and 2029.

Government Regulation

The research, development, testing, manufacture, labeling, promotion, advertising, distribution and marketing, among other things, of our
products are extensively regulated by governmental authorities in the United States and other countries. In the United States, the FDA
regulates drugs under the Federal Food, Drug, and Cosmetic Act, Public Health Service Act, and their implementing regulations. Failure to
comply with applicable U.S. requirements may subject us to administrative or judicial sanctions, such as FDA refusal to approve pending
new drug applications or supplemental applications, warning letters, product recalls, product seizures, total or partial suspension of
production or distribution, injunctions and/or criminal prosecution. We also may be subject to regulation under the Occupational Safety
and Health Act, the Atomic Energy Act, the Toxic Substances Control Act, the Export Control Act and other present and future laws of
general application as well as those specifically related to radiopharmaceuticals.

Most aspects of our business are subject to some degree of government regulation in the countries in which we conduct our operations. As
a developer, manufacturer and marketer of medical products, we are subject to extensive regulation by, among other governmental entities,
the FDA and the corresponding state, local and foreign regulatory bodies in jurisdictions in which our products are intended to be sold.
These regulations govern the introduction of new products, the observance of certain standards with respect to the manufacture, quality,
safety, efficacy and labeling of such products, the maintenance of certain records, the tracking of such products, performance surveillance
and other matters.

Failure to comply with applicable federal, state, local or foreign laws or regulations could subject us to enforcement action, including
product seizures, recalls, withdrawal of marketing clearances, and civil and criminal penalties, any one or more of which could have a
material adverse effect on our business. We believe that we are in substantial compliance with such governmental regulations. However,
federal, state, local and foreign laws and regulations regarding the manufacture and sale of radiopharmaceuticals are subject to future
changes. Such changes may have a material adverse effect on our company.

For some products, and in some countries, government regulation is significant and, in general, there is a trend toward more stringent
regulation. In recent years, the FDA and certain foreign regulatory bodies have pursued a more rigorous enforcement program to ensure
that regulated businesses like ours comply with applicable laws and regulations. We devote significant time, effort and expense addressing
the extensive governmental regulatory requirements applicable to our business. To date, we have not received a noncompliance
notification or warning letter from the FDA or any other regulatory bodies of alleged deficiencies in our compliance with the relevant
requirements, nor have we recalled or issued safety alerts on any of our products. However, a warning letter, recall or safety alert, if it
occurred, could have a material adverse effect on our company. See Risk Factors.

In the early- to mid-1990s, the review time by the FDA to clear medical products for commercial release lengthened and the number of
marketing clearances decreased. In response to public and congressional concern, the FDA Modernization Act of 1997 (the “1997 Act”)
was adopted with the intent of bringing better definition to the clearance process for new medical products. While the FDA review times
have improved since passage of the 1997 Act, the FDA review processes could delay our Company's introduction of new products in the
United States in the future. In addition, many foreign countries have adopted more stringent regulatory requirements that also have added
to the delays and uncertainties associated with the development and release of new products, as well as the clinical and regulatory costs of
supporting such releases. It is possible that delays in receipt of, or failure to receive, any necessary clearance for our new product offerings
could have a material adverse effect on our business, financial condition or results of operations. See Risk Factors.

The U.S. Drug Approval Process

None of our drugs may be marketed in the United States until such drug has received FDA approval. The steps required before a drug may
be marketed in the United States include:

●

preclinical laboratory tests, animal studies and formulation studies;

submission to the FDA of an IND application for human clinical testing, which must become effective before human clinical
trials may begin;

adequate and well-controlled human clinical trials to establish the safety and efficacy of the investigational product for each
indication;

submission to the FDA of a New Drug Application (“NDA”);

satisfactory completion of FDA inspections of the manufacturing and clinical facilities at which the drug is produced, tested,
and/or distributed to assess compliance with cGMPs and current good clinical practices (“cGCP”) standards; and

FDA review and approval of the NDA.

Preclinical tests include laboratory evaluation of product chemistry, toxicity and formulation, as well as animal studies. The conduct of the
preclinical tests and formulation of the compounds for testing must comply with federal regulations and requirements. The results of the
preclinical tests, together with manufacturing information and analytical data, are submitted to the FDA as part of an IND, which must
become effective before human clinical trials may begin. An IND will automatically become effective 30 days after receipt by the FDA
unless, before that time, the FDA raises concerns or questions about issues such as the conduct of the trials as outlined in the IND. In such
a case, the IND sponsor and the FDA must resolve any outstanding FDA concerns or questions before clinical trials can proceed. We
cannot be sure that submission of an IND will result in the FDA allowing clinical trials to begin.

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators.
Clinical trials are conducted under protocols detailing the objectives of the study, the parameters to be used in monitoring safety, and the
effectiveness criteria to be evaluated. Each protocol must be submitted to the FDA as part of the IND.

Clinical trials typically are conducted in three sequential phases, but the phases may overlap or be combined. The study protocol and
informed consent information for study subjects in clinical trials must also be approved by an institutional review board at each institution
where the trials will be conducted. Study subjects must sign an informed consent form before participating in a clinical trial. Phase 1
usually involves the initial introduction of the investigational product into people to evaluate its short-term safety, dosage tolerance,
metabolism, pharmacokinetics and pharmacologic actions, and, if possible, to gain an early indication of its effectiveness. Phase 2 usually
involves trials in a limited subject population to (i) evaluate dosage tolerance and appropriate dosage, (ii) identify possible adverse effects
and safety risks, and (iii) evaluate preliminarily the efficacy of the product candidate for specific indications. Phase 3 trials usually further
evaluate clinical efficacy and further test its safety by using the product candidate in its final form in an expanded subject population.
There can be no assurance that Phase 1, Phase 2 or Phase 3 testing will be completed successfully within any specified period of time, if at
all. Furthermore, we or the FDA may suspend clinical trials at any time on various grounds, including a finding that the subjects or
patients are being exposed to an unacceptable health risk.

The FDA and the IND sponsor may agree in writing on the design and size of clinical studies intended to form the primary basis of an
effectiveness claim in an NDA application. This process is known as a Special Protocol Assessment (“SPA”). These agreements may not
be changed after the clinical studies begin, except in limited circumstances. The existence of a SPA, however, does not assure approval of
a product candidate.

Assuming successful completion of the required clinical testing, the results of the preclinical studies and of the clinical studies, together
with other detailed information, including information on the manufacturing quality and composition of the investigational product, are
submitted to the FDA in the form of an NDA requesting approval to market the product for one or more indications. The testing and
approval process requires substantial time, effort and financial resources. Submission of an NDA requires payment of a substantial review
user fee to the FDA. Before approving a NDA, the FDA usually will inspect the facility or the facilities where the product is
manufactured, tested and distributed and will not approve the product unless cGMP compliance is satisfactory. If the FDA evaluates the
NDA and the manufacturing facilities as acceptable, the FDA may issue an approval letter or a complete response letter. A complete
response letter outlines conditions that must be met in order to secure final approval of the NDA. When and if those conditions have been
met to the FDA’s satisfaction, the FDA will issue an approval letter. The approval letter authorizes commercial marketing of the drug for
specific indications. As a condition of approval, the FDA may require post-marketing testing and surveillance to monitor the product’s
safety or efficacy, or impose other post-approval commitment conditions.

The FDA has various programs, including fast track, priority review and accelerated approval, which are intended to expedite or simplify
the process of reviewing drugs and/or provide for approval on the basis of surrogate endpoints. Generally, drugs that may be eligible for
one or more of these programs are those for serious or life threatening conditions, those with the potential to address unmet medical needs
and those that provide meaningful benefit over existing treatments. Our drug candidates may not qualify for any of these programs, or, if a
drug candidate does qualify, the review time may not be reduced or the product may not be approved.

After approval, certain changes to the approved product, such as adding new indications, making certain manufacturing changes or
making certain additional labeling claims, are subject to further FDA review and approval. Obtaining approval for a new indication
generally requires that additional clinical studies be conducted.

U.S. Post-Approval Requirements

Holders of an approved NDA are required to: (i) conduct pharmacovigilance and report certain adverse reactions to the FDA, (ii) comply
with certain requirements concerning advertising and promotional labeling for their products, and (iii) continue to have quality control and
manufacturing procedures conform to cGMP. The FDA periodically inspects the sponsor’s records related to safety reporting and/or
manufacturing and distribution facilities; this latter effort includes assessment of compliance with cGMP. Accordingly, manufacturers
must continue to expend time, money and effort in the area of production, quality control and distribution to maintain cGMP compliance.
We use and will continue to use third-party manufacturers to produce our products in clinical and commercial quantities, and future FDA
inspections may identify compliance issues at our facilities or at the facilities of our contract manufacturers that may disrupt production or
distribution, or require substantial resources to correct.

Marketing of prescription drugs is also subject to significant regulation through federal and state agencies tasked with consumer protection
and prevention of medical fraud, waste and abuse. We must comply with restrictions on off-label use promotion, anti-kickback, ongoing
clinical trial registration, and limitations on gifts and payments to physicians.

Non-U.S. Regulation

Before our products can be marketed outside of the United States, they are subject to regulatory approval similar to that required in the
United States, although the requirements governing the conduct of clinical trials, including additional clinical trials that may be required,
product licensing, pricing and reimbursement vary widely from country to country. No action can be taken to market any product in a
country until an appropriate application has been approved by the regulatory authorities in that country. The current approval process
varies from country to country, and the time spent in gaining approval varies from that required for FDA approval. In certain countries, the
sales price of a product must also be approved. The pricing review period often begins after market approval is granted. Even if a product
is approved by a regulatory authority, satisfactory prices may not be approved for such product.

In Europe, marketing authorizations may be submitted at a centralized, a decentralized or national level. The centralized procedure is
mandatory for the approval of biotechnology products and provides for the grant of a single marketing authorization that is valid in all EU
member states. A mutual recognition procedure is available at the request of the applicant for all medicinal products that are not subject to
the centralized procedure.

The EC granted marketing authorization for Tc99m tilmanocept in the EU in November 2014, and a reduced-mass vial developed for the
EU market was approved in September 2016.

While we are unable to predict the extent to which our business may be affected by future regulatory developments, we believe that our
substantial experience dealing with governmental regulatory requirements and restrictions on our operations throughout the world, and our
development of new and improved products, should enable us to compete effectively within this environment.

Regulation Specific to Radiopharmaceuticals

Our radiolabeled targeting agents and biologic products, if developed, would require a regulatory license to market from the FDA and from
comparable agencies in foreign countries. The process of obtaining regulatory licenses and approvals is costly and time consuming, and we
have encountered significant impediments and delays related to our previously proposed biologic products.

The process of completing pre-clinical and clinical testing, manufacturing validation and submission of a marketing application to the
appropriate regulatory bodies usually takes a number of years and requires the expenditure of substantial resources, and any approval may
not granted on a timely basis, if at all. Additionally, the length of time it takes for the various regulatory bodies to evaluate an application
for marketing approval varies considerably, as does the amount of preclinical and clinical data required to demonstrate the safety and
efficacy of a specific product. The regulatory bodies may require additional clinical studies that may take several years to perform. The
length of the review period may vary widely depending upon the nature and indications of the proposed product and whether the
regulatory body has any further questions or requests any additional data. Also, the regulatory bodies require post-marketing reporting and
surveillance programs (pharmacovigilance) to monitor the side effects of the products. Our potential drug or biologic products may not be
approved by the regulatory bodies or may not be approved on a timely or accelerated basis, or any approvals received may subsequently
be revoked or modified.

The Nuclear Regulatory Commission (“NRC”) oversees medical uses of nuclear material through licensing, inspection, and enforcement
programs. The NRC issues medical use licenses to medical facilities and authorized physician users, develops guidance and regulations for
use by licensees, and maintains a committee of medical experts to obtain advice about the use of byproduct materials in medicine. The
NRC (or the responsible Agreement State) also regulates the manufacture and distribution of these products. The FDA oversees the good
practices in the manufacturing of radiopharmaceuticals, medical devices, and radiation-producing x-ray machines and accelerators. The
states regulate the practices of medicine and pharmacy and administer programs associated with radiation-producing x-ray machines and
accelerators. We may not be able to obtain all necessary licenses and permits and we may not be able to comply with all applicable laws.
The failure to obtain such licenses and permits or to comply with applicable laws would have a materially adverse effect on our business,
financial condition, and results of operations.

Corporate Information

Our executive offices are located at 4995 Bradenton Avenue, Suite 240, Dublin, OH 43017. Our telephone number is (614) 793-7500.
“Navidea” and the Navidea logo are trademarks of Navidea Biopharmaceuticals, Inc. or its subsidiaries in the United States and/or other
countries. Other trademarks or service marks appearing in this report may be trademarks or service marks of other owners.

Available Information

The address for our website is http://www.navidea.com. We make available free of charge on our website our Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and amendments to such filings, as soon as reasonably practicable after each is
electronically filed with, or furnished to, the Securities Exchange Commission (“SEC”). We do not charge for access to and viewing of
these reports. Information in the investor section and on our website is not part of this Annual Report on Form 10-K or any of our other
securities filings unless specifically incorporated herein by reference.

In addition, the public may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street,
NE, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-
800-SEC-0330. Also, our filings with the SEC may be accessed through the SEC’s website at www.sec.gov. All statements made in any of
our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the
statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are
required to do so by law.

Financial Statements

Our consolidated financial statements and the related notes, including revenues, income (loss), total assets and other financial measures
are set forth at pages F-1 through F-41 of this Form 10-K.

Research and Development

We spent approximately $4.5 million, $7.1 million and $10.6 million on research and development activities in the years ended December
31, 2017, 2016 and 2015, respectively.

Employees

As of March 1, 2018, we had 19 full-time and 5 part-time employees. None of our employees are represented by a collective bargaining
agreement, we have not experienced any work stoppages, and we believe that our relationship with our employees is good.

Item 1A. Risk Factors

An investment in our common stock is highly speculative, involves a high degree of risk, and should be made only by investors who can
afford a complete loss. You should carefully consider the following risk factors, together with the other information in this Form 10-K,
including our financial statements and the related notes, before you decide to buy our common stock. If any of the following risks actually
occur, our business, financial condition, or results of operations could be materially adversely affected, the trading of our common stock
could decline, and you may lose all or part of your investment therein.

If Cardinal Health 414, SpePharm AG or Sayre Therapeutics do not achieve commercial success with Tc99m tilmanocept, we may be
unable to generate significant revenue or become profitable.

In March 2017, Navidea completed the Asset Sale to Cardinal Health 414, as discussed previously under “Development of the Business.”
Pursuant to the Purchase Agreement, we sold all of our assets used, held for use, or intended to be used in operating the Business,
including Lymphoseek, in Canada, Mexico and the United States. Upon closing of the Asset Sale, the Supply and Distribution Agreement
between Cardinal Health 414 and the Company was terminated. Under the terms of the Purchase Agreement, Navidea is entitled to receive
periodic earnout payments (to consist of contingent payments and milestone payments which, if paid, will be treated as additional purchase
price) from Cardinal Health 414 based on net sales derived from Lymphoseek, subject, in each case, to Cardinal Health 414’s right to off-
set.

We announced an exclusive EU distribution partnership for Tc99m tilmanocept with SpePharm AG, a subsidiary of Norgine B.V., in
March 2015, and SpePharm commenced marketing of Tc99m tilmanocept in the EU during the third quarter of 2017. Navidea is entitled to
receive royalty and milestone payments from SpePharm based on net sales derived from Tc99m tilmanocept.

In June 2017, Navidea entered into an exclusive license and distribution agreement with Sayre for the development and commercialization
of Tc99m tilmanocept in India. Under the terms of the agreement, Navidea is eligible to receive milestone payments and royalties
associated with the sale of Tc99m tilmanocept in India. Tc99m tilmanocept has not yet received marketing approval in India.

Cardinal Health 414, SpePharm or Sayre may never achieve commercial success in North America, the EU, India, or any other global
market, they may never realize sales at levels necessary for us to achieve sales-based earnout, royalty or milestone payments, and such
payments may never lead to us becoming profitable.

If we do not successfully develop any additional product candidates into marketable products, we may be unable to generate significant
revenue or become profitable.

Additional diagnostic and therapeutic applications of the Manocept platform, including diagnosis of other solid tumor cancers, rheumatoid
arthritis and cardiovascular disease, among others, are in various stages of pre-clinical and clinical development. Regulatory approval of
additional Manocept-based product candidates may not be successful, or if successful, may not result in increased sales. Additional clinical
testing for products based on our Manocept platform or other product candidates may not be successful and, even if they are, we may not
be successful in developing any of them into a commercial product which will provide sufficient revenue to make us profitable.

We continue to seek to partner or sub-license NAV4694. In October 2017, the Company executed a letter of intent with Sinotau and
Cerveau, outlining a plan to sublicense to Cerveau the worldwide rights to conduct research using NAV4694, as well as grant to Cerveau
an exclusive license for the development, marketing and commercialization of NAV4694 in Australia, Canada, China and Singapore. The
letter of intent includes a provision stating that Sinotau will release all claims in the Sinotau Litigation upon the parties’ execution of a
definitive agreement; the commercial rights agreement contemplated by the letter of intent would also include a release of such claims and
a covenant not to sue on such claims. See Item 3 – Legal Proceedings. Pending resolution of the Sinotau litigation, we continue to incur
costs to maintain our ability to support future clinical evaluation of this product candidate to preserve it for eventual sub-licensing.

Many companies in the pharmaceutical industry suffer significant setbacks in advanced clinical trials even after reporting promising results
in earlier trials. Even if our Manocept trials are viewed as successful, we may not get regulatory approval for marketing of any Manocept
product candidate. Our Manocept product candidates will be successful only if:

●

they are developed to a stage that will enable us to commercialize them or sell related marketing rights to pharmaceutical
companies;

we are able to commercialize them in clinical development or sell the marketing rights to third parties; and

upon being developed, they are approved by the regulatory authorities.

We are dependent on the achievement of a number of these goals in order to generate future revenues. The failure to generate revenues
from our Manocept-based product candidates may preclude us from continuing our research and development of these and other product
candidates.

We may never obtain regulatory approval to manufacture or market our unapproved drug candidates and our approval to market our
products or anticipated commercial launch may be delayed as a result of the regulatory review process.

Obtaining regulatory approval to market drugs to diagnose or treat diseases is expensive, difficult and risky. Preclinical and clinical data, as
well as information related to the chemistry, manufacturing and control (“CMC”) processes of drug production, can be interpreted in
different ways that could delay, limit or preclude regulatory approval. Negative or inconclusive results, adverse medical events during a
clinical trial, or issues related to CMC processes could also delay, limit or prevent regulatory approval. Even if we receive regulatory
clearance to market a particular product candidate, the approval could be conditioned on us conducting additional costly post-approval
studies or could limit the indicated uses included in our labeling.

We may not be successful in securing and/or maintaining the necessary manufacturing, supply and/or radiolabeling capabilities for our
product candidates in clinical development.

We may not be able to secure and/or maintain agreements or other purchasing arrangements with our subcontractors on terms acceptable
to us, or that our subcontractors will be able to meet our production requirements on a timely basis, at the required levels of performance
and quality, including compliance with FDA cGMP requirements. In the event that any of our subcontractors are unable or unwilling to
meet our production requirements, we may not be able to establish an alternate source of supply without significant interruption in product
supply or without significant adverse impact to product availability or cost. Any significant supply interruption or yield problems that we
or our subcontractors experience would have a material adverse effect on our ability to manufacture our products and, therefore, a material
adverse effect on our business, financial condition, and results of operations until a new source of supply is qualified.

Clinical trials for our product candidates will be lengthy and expensive, and their outcome is uncertain.

Before obtaining regulatory approval for the commercial sale of any product candidates, we must demonstrate through preclinical testing
and clinical trials that our product candidates are safe and effective for use in humans. Conducting clinical trials is a time consuming,
expensive and uncertain process and may take years to complete.

We expect to sponsor efforts to explore the Manocept platform, whether in potential diagnostic or therapeutic uses. We continually assess
our clinical trial plans and may, from time to time, initiate additional clinical trials to support our overall strategic development objectives.
Historically, the results from preclinical testing and early clinical trials often do not predict the results obtained in later clinical trials.
Frequently, drugs that have shown promising results in preclinical or early clinical trials subsequently fail to establish sufficient safety and
efficacy data necessary to obtain regulatory approval. At any time during the clinical trials, we, the participating institutions, the FDA, the
EMA or other regulatory authorities might delay or halt any clinical trials for our product candidates for various reasons, including:

●

ineffectiveness of the product candidate;

discovery of unacceptable toxicities or side effects;

development of disease resistance or other physiological factors;

delays in patient enrollment; or

other reasons that are internal to the businesses of our potential collaborative partners, which reasons they may not share with
us.

While we have achieved some level of success in our clinical trials for Tc99m tilmanocept as indicated by the FDA and EMA approvals,
the results of pending and future trials for other product candidates that we may develop or acquire, are subject to review and
interpretation by various regulatory bodies during the regulatory review process and may ultimately fail to demonstrate the safety or
effectiveness of our product candidates to the extent necessary to obtain regulatory approval, or that commercialization of our product
candidates is worthwhile. Any failure or substantial delay in successfully completing clinical trials and obtaining regulatory approval for
our product candidates could materially harm our business.

We extensively outsource our clinical trial activities and usually perform only a small portion of the start-up activities in-house. We rely
on independent third-party contract research organizations (“CROs”) to perform most of our clinical studies, including document
preparation, site identification, screening and preparation, pre-study visits, training, post-study audits and statistical analysis. Many
important aspects of the services performed for us by the CROs are out of our direct control. If there is any dispute or disruption in our
relationship with our CROs, our clinical trials may be delayed. Moreover, in our regulatory submissions, we rely on the quality and
validity of the clinical work performed by third-party CROs. If any of our CROs’ processes, methodologies or results were determined to
be invalid or inadequate, our own clinical data and results and related regulatory approvals could be adversely impacted.

Even if our drug candidates are successful in clinical trials, we may not be able to successfully commercialize them.

We have dedicated and will continue to dedicate substantially all of our resources to the research and development (“R&D”) of our
Manocept technology and related compounds. There are many difficulties and uncertainties inherent in pharmaceutical R&D and the
introduction of new products. A high rate of failure is inherent in new drug discovery and development. The process to bring a drug from
the discovery phase to regulatory approval can take 12 to 15 years or longer and cost more than $1 billion. Failure can occur at any point
in the process, including late in the process after substantial investment. As a result, most research programs will not generate financial
returns. New product candidates that appear promising in development may fail to reach the market or may have only limited commercial
success. Delays and uncertainties in the regulatory approval processes in the United States and in other countries can result in delays in
product launches and lost market opportunities. Consequently, it is very difficult to predict which products will ultimately be approved.
Due to the risks and uncertainties involved in the R&D process, we cannot reliably estimate the nature, timing, completion dates, and costs
of the efforts necessary to complete the development of our R&D projects, nor can we reliably estimate the future potential revenue that
will be generated from a successful R&D project.

Prior to commercialization, each product candidate requires significant research, development and preclinical testing and extensive clinical
investigation before submission of any regulatory application for marketing approval. The development of radiopharmaceutical
technologies and compounds, including those we are currently developing, is unpredictable and subject to numerous risks. Potential
products that appear to be promising at early stages of development may not reach the market for a number of reasons including that they
may:

●

be found ineffective or cause harmful side effects during preclinical testing or clinical trials;

fail to receive necessary regulatory approvals;

be difficult to manufacture on a scale necessary for commercialization;

be uneconomical to produce;

fail to achieve market acceptance; or

be precluded from commercialization by proprietary rights of third parties.

The occurrence of any of these events could adversely affect the commercialization of our product candidates. Products, if introduced,
may not be successfully marketed and/or may not achieve customer acceptance. If we fail to commercialize products or if our future
products do not achieve significant market acceptance, we will not likely generate significant revenues or become profitable.

If we fail to establish and maintain collaborations or if our partners do not perform, we may be unable to develop and commercialize our
product candidates.

We have entered into collaborative arrangements with third parties to develop and/or commercialize product candidates and are currently
seeking additional collaborations. Such collaborations might be necessary in order for us to fund our research and development activities
and third-party manufacturing arrangements, seek and obtain regulatory approvals and successfully commercialize our existing and future
product candidates. If we fail to enter into collaborative arrangements or fail to maintain our existing collaborative arrangements, the
number of product candidates from which we could receive future revenues would decline.

Our dependence on collaborative arrangements with third parties will subject us to a number of risks that could harm our ability to
develop and commercialize products including that:

●

collaborative arrangements may not be on terms favorable to us;

disagreements with partners or regulatory compliance issues may result in delays in the development and marketing of
products, termination of our collaboration agreements or time consuming and expensive legal action;

we cannot control the amount and timing of resources partners devote to product candidates or their prioritization of product
candidates and partners may not allocate sufficient funds or resources to the development, promotion or marketing of our
products, or may not perform their obligations as expected;

partners may choose to develop, independently or with other companies, alternative products or treatments. including products
or treatments which compete with ours;

agreements with partners may expire or be terminated without renewal, or partners may breach collaboration agreements with
us;

business combinations or significant changes in a partner’s business strategy might adversely affect that partner's willingness
or ability to complete its obligations to us; and

the terms and conditions of the relevant agreements may no longer be suitable.

The occurrence of any of these events could adversely affect the development or commercialization of our products.

Our pharmaceutical products will remain subject to ongoing regulatory review following the receipt of marketing approval. If we fail to
comply with continuing regulations, we could lose these approvals and the sale of our products could be suspended.

Approved products may later cause adverse effects that limit or prevent their widespread use, force us to withdraw it from the market or
impede or delay our ability to obtain regulatory approvals in additional countries. In addition, any contract manufacturer we use in the
process of producing a product and its facilities will continue to be subject to FDA review and periodic inspections to ensure adherence to
applicable regulations. After receiving marketing clearance, the manufacturing, labeling, packaging, adverse event reporting, storage,
advertising, promotion and record-keeping related to the product will remain subject to extensive regulatory requirements. We may be
slow to adapt, or we may never adapt, to changes in existing regulatory requirements or adoption of new regulatory requirements.

If we fail to comply with the regulatory requirements of the FDA and other applicable U.S. and foreign regulatory authorities or previously
unknown problems with our products, manufacturers or manufacturing processes are discovered, we could be subject to administrative or
judicially imposed sanctions, including:

●

restrictions on the products, manufacturers or manufacturing processes;

warning letters;

civil or criminal penalties;

fines;

injunctions;

product seizures or detentions;

import bans;

voluntary or mandatory product recalls and publicity requirements;

suspension or withdrawal of regulatory approvals;

total or partial suspension of production; and

refusal to approve pending applications for marketing approval of new drugs or supplements to approved applications.

If users of our products are unable to obtain adequate reimbursement from third-party payers, or if new restrictive legislation is adopted,
market acceptance of our products may be limited and we may not achieve anticipated revenues.

Our ability to commercialize our products will depend in part on the extent to which appropriate reimbursement levels for the cost of our
products and related treatment are obtained by governmental authorities, private health insurers and other organizations such as health
maintenance organizations (“HMOs”). Generally, in Europe and other countries outside the United States, the government-sponsored
healthcare system is the primary payer of patients’ healthcare costs. Third-party payers are increasingly challenging the prices charged for
medical care. Also, the trend toward managed health care in the United States and the concurrent growth of organizations such as HMOs
which could control or significantly influence the purchase of health care services and products, as well as legislative proposals to further
reform health care or reduce government insurance programs, may all result in lower prices for our products if approved for
commercialization. The cost containment measures that health care payers and providers are instituting and the effect of any health care
reform could materially harm our ability to sell our products at a profit.

We may be unable to establish or contract for the pharmaceutical manufacturing capabilities necessary to develop and commercialize our
potential products.

We are in the process of establishing third-party clinical manufacturing capabilities for our compounds under development. We intend to
rely on third-party contract manufacturers to produce sufficiently large quantities of drug materials that are and will be needed for clinical
trials and commercialization of our potential products. Third-party manufacturers may not be able to meet our needs with respect to timing,
quantity or quality of materials. If we are unable to contract for a sufficient supply of needed materials on acceptable terms, or if we should
encounter delays or difficulties in our relationships with manufacturers, clinical trials for our product candidates may be delayed, thereby
delaying the submission of product candidates for regulatory approval and the market introduction and subsequent commercialization of
our potential products, and for approved products, any such delays, interruptions or other difficulties may render us unable to supply
sufficient quantities to meet demand. Any such delays or interruptions may lower our revenues and potential profitability.

We and any third-party manufacturers that we may use must continually adhere to cGMPs and regulations enforced by the FDA through
its facilities inspection program and/or foreign regulatory authorities where our products will be tested and/or marketed. If our facilities or
the facilities of third-party manufacturers cannot pass a pre-approval plant inspection, the FDA and/or foreign regulatory authorities will
not grant approval to market our product candidates. In complying with these regulations and foreign regulatory requirements, we and any
of our third-party manufacturers will be obligated to expend time, money and effort on production, record-keeping and quality control to
assure that our potential products meet applicable specifications and other requirements. The FDA and other regulatory authorities may
take action against a contract manufacturer who violates cGMPs.

Our product supply and related patient access could be negatively impacted by, among other things: (i) product seizures or recalls or
forced closings of manufacturing plants; (ii) disruption in supply chain continuity including from natural or man-made disasters at a
critical supplier, as well as our failure or the failure of any of our suppliers to comply with cGMPs and other applicable regulations or
quality assurance guidelines that could lead to manufacturing shutdowns, product shortages or delays in product manufacturing; (iii)
manufacturing, quality assurance/quality control, supply problems or governmental approval delays; (iv) the failure of a sole source or
single source supplier to provide us with the necessary raw materials, supplies or finished goods within a reasonable timeframe; (v) the
failure of a third-party manufacturer to supply us with bulk active or finished product on time; and (vi) other manufacturing or distribution
issues, including limits to manufacturing capacity due to regulatory requirements, and changes in the types of products produced, physical
limitations or other business interruptions.

We may lose out to larger or better-established competitors.

The biotech and pharmaceutical industries are intensely competitive. Many of our competitors have significantly greater financial,
technical, manufacturing, marketing and distribution resources as well as greater experience in the industry than we have. The particular
medical conditions our product lines address can also be addressed by other medical procedures or drugs. Many of these alternatives are
widely accepted by physicians and have a long history of use.

To remain competitive, we must continue to launch new products and technologies. To accomplish this, we commit substantial efforts,
funds, and other resources to research and development. A high rate of failure is inherent in the research and development of new products
and technologies. We must make ongoing substantial expenditures without any assurance that our efforts will be commercially successful.
Failure can occur at any point in the process, including after significant funds have been invested. Promising new product candidates may
fail to reach the market or may only have limited commercial success because of efficacy or safety concerns, failure to achieve positive
clinical outcomes, inability to obtain necessary regulatory approvals, limited scope of approved uses, excessive costs to manufacture, the
failure to establish or maintain intellectual property rights, or infringement of the intellectual property rights of others. Even if we
successfully develop new products or enhancements or new generations of our existing products, they may be quickly rendered obsolete
by changing customer preferences, changing industry standards, or competitors' innovations. Innovations may not be accepted quickly in
the marketplace because of, among other things, entrenched patterns of clinical practice or uncertainty over third-party reimbursement.
We cannot state with certainty when or whether any of our products under development will be launched, whether we will be able to
develop, license, or otherwise acquire compounds or products, or whether any products will be commercially successful. Failure to launch
successful new products or new indications for existing products may cause our products to become obsolete, causing our revenues and
operating results to suffer.

Physicians may use our competitors’ products and/or our products may not be competitive with other technologies. Tc99m tilmanocept is
expected to continue to compete against sulfur colloid in the United States and other colloidal agents in the EU and other global markets.
If our competitors are successful in establishing and maintaining market share for their products, our future earnout and royalty receipts
may not occur at the rate we anticipate. In addition, our potential competitors may establish cooperative relationships with larger
companies to gain access to greater research and development or marketing resources. Competition may result in price reductions, reduced
gross margins and loss of market share.

Several pharmaceutical companies currently have product candidates in development that they expect to have a significant impact on the
diagnosis and treatment of AD in coming years. The prospects for these product candidates could have a significant impact, either positive
or negative, on our ability to sub-license our NAV4694 product candidate.

We may be exposed to business risk, including product liability claims for any product candidates and products that we are able to
commercialize.

The testing, manufacturing, marketing and use of any commercial products that we develop, as well as product candidates in development,
involve substantial risk of product liability claims. These claims may be made directly by consumers, healthcare providers, pharmaceutical
companies or others. In recent years, coverage and availability of cost-effective product liability insurance has decreased, so we may be
unable to maintain sufficient coverage for product liabilities that may arise. In addition, the cost to defend lawsuits or pay damages for
product liability claims may exceed our coverage. If we are unable to maintain adequate coverage or if claims exceed our coverage, our
financial condition and our ability to clinically test our product candidates and market our products will be adversely impacted. In addition,
negative publicity associated with any claims, regardless of their merit, may decrease the future demand for our products and impair our
financial condition.

The administration of drugs in humans, whether in clinical studies or commercially, carries the inherent risk of product liability claims
whether or not the drugs are actually the cause of an injury. Our products or product candidates may cause, or may appear to have caused,
injury or dangerous drug interactions, and we may not learn about or understand those effects until the product or product candidate has
been administered to patients for a prolonged period of time. We may be subject from time to time to lawsuits based on product liability
and related claims, and we cannot predict the eventual outcome of any future litigation. We may not be successful in defending ourselves
in the litigation and, as a result, our business could be materially harmed. These lawsuits may result in large judgments or settlements
against us, any of which could have a negative effect on our financial condition and business if in excess of our insurance coverage.
Additionally, lawsuits can be expensive to defend, whether or not they have merit, and the defense of these actions may divert the
attention of our management and other resources that would otherwise be engaged in managing our business.

As a result of a number of factors, product liability insurance has become less available while the cost has increased significantly. We
currently carry product liability insurance that our management believes is appropriate given the risks that we face. We will continually
assess the cost and availability of insurance; however, there can be no guarantee that insurance coverage will be obtained or, if obtained,
will be sufficient to fully cover product liabilities that may arise. If we are held liable for a claim against which we are not insured or for
damages exceeding the limits of our insurance coverage, whether arising out of product liability matters, cybersecurity matters, or from
some other matter, that claim could have a material adverse effect on our results of operations.

If any of our license agreements for intellectual property underlying our Manocept platform or any other products or potential products
are terminated, we may lose the right to develop or market that product.

We have licensed intellectual property, including patents and patent applications relating to the underlying intellectual property for our
Manocept platform, upon which all of our current product candidates are based. We may also enter into other license agreements or
acquire other product candidates. The potential success of our product development programs depend on our ability to maintain rights
under these licenses, including our ability to achieve development or commercialization milestones contained in the licenses. Under
certain circumstances, the licensors have the power to terminate their agreements with us if we fail to meet our obligations under these
licenses. We may not be able to meet our obligations under these licenses. If we default under any license agreement, we may lose our
right to market and sell any products based on the licensed technology.

We may not have sufficient legal protection against infringement or loss of our intellectual property, and we may lose rights or protection
related to our intellectual property if diligence requirements are not met, or at the expiry of underlying patents.

Our success depends, in part, on our ability to secure and maintain patent protection for our products and product candidates, to preserve
our trade secrets, and to operate without infringing on the proprietary rights of third parties. While we seek to protect our proprietary
positions by filing U.S. and foreign patent applications for our important inventions and improvements, domestic and foreign patent offices
may not issue these patents. Third parties may challenge, invalidate, or circumvent our patents or patent applications in the future.
Competitors, many of which have significantly more resources than we have and have made substantial investments in competing
technologies, may apply for and obtain patents that will prevent, limit, or interfere with our ability to make, use, or sell our products either
in the United States or abroad.

Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which
we are or may be developing products. As the biotechnology and pharmaceutical industry expands and more patents are issued, the risk
increases that we will be subject to claims that our products or product candidates, or their use, infringe the rights of others. In the United
States, most patent applications are secret for a period of 18 months after filing, and in foreign countries, patent applications are secret for
varying periods of time after filing. Publications of discoveries tend to significantly lag the actual discoveries and the filing of related
patent applications. Third parties may have already filed applications for patents for products or processes that will make our products
obsolete, limit our patents, invalidate our patent applications or create a risk of infringement claims.

Under recent changes to U.S. patent law, the United States has moved to a “first to file” system of patent approval, as opposed to the
former “first to invent” system. As a consequence, delays in filing patent applications for new product candidates or discoveries could
result in the loss of patentability if there is an intervening patent application with similar claims filed by a third party, even if we or our
collaborators were the first to invent.

We or our suppliers may be exposed to, or threatened with, future litigation by third parties having patent or other intellectual property
rights alleging that our products, product candidates and/or technologies infringe their intellectual property rights or that the process of
manufacturing our products or any of their respective component materials, or the component materials themselves, or the use of our
products, product candidates or technologies, infringe their intellectual property rights. If one of these patents was found to cover our
products, product candidates, technologies or their uses, or any of the underlying manufacturing processes or components, we could be
required to pay damages and could be unable to commercialize our products or use our technologies or methods unless we are able to
obtain a license to the patent or intellectual property right. A license may not be available to us in a timely manner or on acceptable terms,
if at all. In addition, during litigation, a patent holder could obtain a preliminary injunction or other equitable remedy that could prohibit us
from making, using or selling our products, technologies or methods.

Our currently held and licensed patents expire over the next three to twenty years. Expiration of the patents underlying our technology, in
the absence of extensions or other trade secret or intellectual property protection, may have a material and adverse effect on us.

In addition, it may be necessary for us to enforce patents under which we have rights, or to determine the scope, validity and
unenforceability of other parties’ proprietary rights, which may affect our rights. There can be no assurance that our patents would be held
valid by a court or administrative body or that an alleged infringer would be found to be infringing. The uncertainty resulting from the
mere institution and continuation of any patent related litigation or interference proceeding could have a material and adverse effect on us.

We typically require our employees, consultants, advisers and suppliers to execute confidentiality and assignment of invention agreements
in connection with their employment, consulting, advisory, or supply relationships with us. They may breach these agreements and we
may not obtain an adequate remedy for breach. Further, third parties may gain unauthorized access to our trade secrets or independently
develop or acquire the same or equivalent information.

We and our collaborators may not be able to protect our intellectual property rights throughout the world.

Filing, prosecuting and defending patents on all of our product candidates and products, when and if we have any, in every jurisdiction
would be prohibitively expensive. Competitors may use our technologies in jurisdictions where we or our licensors have not obtained
patent protection to develop their own products. These products may compete with our products, when and if we have any, and may not be
covered by any of our or our licensors' patent claims or other intellectual property rights.

The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States, and many
companies have encountered significant problems in protecting and defending such rights in foreign jurisdictions. The legal systems of
certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property
protection, particularly those relating to biotechnology and/or pharmaceuticals, which could make it difficult for us to stop the
infringement of our patents. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial cost and divert our
efforts and attention from other aspects of our business.

The intellectual property protection for our product candidates depends on third parties.

With respect to Manocept and NAV4694, we have licensed certain issued patents and pending patent applications covering the respective
technologies underlying these product candidates and their commercialization and use and we have licensed certain issued patents and
pending patent applications directed to product compositions and chemical modifications used in product candidates for
commercialization, and the use and the manufacturing thereof.

The patents and pending patent applications underlying our licenses do not cover all potential product candidates, modifications and uses.
In the case of patents and patent applications licensed from UCSD, we did not have any control over the filing of the patents and patent
applications before the effective date of the Manocept licenses, and have had limited control over the filing and prosecution of these
patents and patent applications after the effective date of such licenses. In the case of patents and patent applications licensed from
AstraZeneca, we have limited control over the filing, prosecution or enforcement of these patents or patent applications. We cannot be
certain that such prosecution efforts have been or will be conducted in compliance with applicable laws and regulations or will result in
valid and enforceable patents. We also cannot be assured that our licensors or their respective licensing partners will agree to enforce any
such patent rights at our request or devote sufficient efforts to attain a desirable result. Any failure by our licensors or any of their
respective licensing partners to properly protect the intellectual property rights relating to our product candidates could have a material
adverse effect on our financial condition and results of operation.

We may become involved in disputes with licensors or potential future collaborators over intellectual property ownership, and
publications by our research collaborators and scientific advisors could impair our ability to obtain patent protection or protect our
proprietary information, which, in either case, could have a significant effect on our business.

Inventions discovered under research, material transfer or other such collaborative agreements may become jointly owned by us and the
other party to such agreements in some cases and the exclusive property of either party in other cases. Under some circumstances, it may
be difficult to determine who owns a particular invention, or whether it is jointly owned, and disputes could arise regarding ownership of
those inventions. These disputes could be costly and time consuming and an unfavorable outcome could have a significant adverse effect
on our business if we were not able to protect our license rights to these inventions. In addition, our research collaborators and scientific
advisors generally have contractual rights to publish our data and other proprietary information, subject to our prior review. Publications
by our research collaborators and scientific advisors containing such information, either with our permission or in contravention of the
terms of their agreements with us, may impair our ability to obtain patent protection or protect our proprietary information, which could
significantly harm our business.

We may be unable to complete partnering or divestiture activities related to NAV4694 at a reasonable price, on a timely basis, or at all.

We continue to seek to partner or sub-license NAV4694, which is designed to enable PET imaging of beta-amyloid deposits in the brain,
believed to correlate with the presence of AD. In October 2017, the Company executed a letter of intent with Sinotau and Cerveau,
outlining a plan to sublicense to Cerveau the worldwide rights to conduct research using NAV4694, as well as grant to Cerveau an
exclusive license for the development, marketing and commercialization of NAV4694 in Australia, Canada, China and Singapore. The
letter of intent includes a provision stating that Sinotau will release all claims in the Sinotau Litigation upon the parties’ execution of a
definitive agreement; the commercial rights agreement contemplated by the letter of intent would also include a release of such claims and
a covenant not to sue on such claims. See Item 3 – Legal Proceedings. Pending resolution of the Sinotau litigation, we continue to incur
costs to maintain our ability to support future clinical evaluation of this product candidate to preserve it for eventual sub-licensing.

Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and
reputation to suffer.

In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business
information and that of our suppliers and business partners, and personally identifiable information of employees and clinical trial subjects,
in our data centers and on our networks. The secure maintenance and transmission of this information is critical to our operations and
business strategy. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or
breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information
stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in
legal claims or proceedings, liability under laws that protect the privacy of personal information, and regulatory penalties, disrupt our
operations, and damage our reputation, which could adversely affect our business, revenues and competitive position.

Failure to comply with domestic and international privacy and security laws can result in the imposition of significant civil and criminal
penalties. The costs of compliance with these laws, including protecting electronically stored information from cyber-attacks, and potential
liability associated with failure to do so could adversely affect our business, financial condition and results of operations. We are subject to
various domestic and international privacy and security regulations, including but not limited to The Health Insurance Portability and
Accountability Act of 1996 (“HIPAA”). HIPAA mandates, among other things, the adoption of uniform standards for the electronic
exchange of information in common healthcare transactions, as well as standards relating to the privacy and security of individually
identifiable health information, which require the adoption of administrative, physical and technical safeguards to protect such
information. In addition, many states have enacted comparable laws addressing the privacy and security of health information, some of
which are more stringent than HIPAA.

A security breach or privacy violation that leads to disclosure of consumer information (including personally identifiable information or
protected health information) could harm our reputation, compel us to comply with disparate state and foreign breach notification laws and
otherwise subject us to liability under laws that protect personal data, resulting in increased costs or loss of revenue.

Despite our efforts to protect against cyber-attacks and security breaches, hackers and other cyber criminals are using increasingly
sophisticated and constantly evolving techniques, and we may need to expend substantial additional resources to continue to protect against
potential security breaches or to address problems caused by such attacks or any breach of our safeguards. In addition, a data security
breach could distract management or other key personnel from performing their primary operational duties.

The interpretation and application of consumer and data protection laws in the United States, Europe and elsewhere are often uncertain,
contradictory and in flux. Among other things, foreign privacy laws impose significant obligations on U.S. companies to protect the
personal information of foreign citizens. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with
our data practices, which could have a material adverse effect on our business. Complying with these various laws could cause us to incur
substantial costs or require us to change our business practices in a manner adverse to our business.

We do not currently carry cyber risk insurance. If we are subject to liability resulting from a security breach or other disruption in our
information systems, we could be exposed to significant liability that could have a material adverse effect on our results of operations.

We are subject to domestic and foreign anticorruption laws, the violation of which could expose us to liability, and cause our business and
reputation to suffer.

We are subject to the U.S. Foreign Corrupt Practices Act and similar anti-corruption laws in other jurisdictions. These laws generally
prohibit companies and their intermediaries from engaging in bribery or making other prohibited payments to government officials for the
purpose of obtaining or retaining business, and some have record keeping requirements. The failure to comply with these laws could result
in substantial criminal and/or monetary penalties. We operate in jurisdictions that have experienced corruption, bribery, pay-offs and other
similar practices from time-to-time and, in certain circumstances, such practices may be local custom. We have implemented internal
control policies and procedures that mandate compliance with these anti-corruption laws. However, we cannot be certain that these
policies and procedures will protect us against liability. If our employees or other agents engage in such conduct, we might be held
responsible and we could suffer severe criminal or civil penalties and other consequences that could have a material adverse effect on our
business, financial position, results of operations and/or cash flow, and the market value of our common stock could decline.

Our international operations expose us to economic, legal, regulatory and currency risks.

Our operations extend to countries outside the United States, and are subject to the risks inherent in conducting business globally and
under the laws, regulations, and customs of various jurisdictions. These risks include: (i) failure to comply with a variety of national and
local laws of countries in which we do business, including restrictions on the import and export of certain intermediates, drugs, and
technologies, (ii) failure to comply with a variety of US laws including the Iran Threat Reduction and Syria Human Rights Act of 2012; and
rules relating to the use of certain “conflict minerals” under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection
Act, (iii) changes in laws, regulations, and practices affecting the pharmaceutical industry and the health care system, including but not
limited to imports, exports, manufacturing, quality, cost, pricing, reimbursement, approval, inspection, and delivery of health care, (iv)
fluctuations in exchange rates for transactions conducted in currencies other than the functional currency, (v) adverse changes in the
economies in which we or our partners and suppliers operate as a result of a slowdown in overall growth, a change in government or
economic policies, or financial, political, or social change or instability in such countries that affects the markets in which we operate,
particularly emerging markets, (vi) differing local product preferences and product requirements, (vii) changes in employment laws, wage
increases, or rising inflation in the countries in which we or our partners and suppliers operate, (viii) supply disruptions, and increases in
energy and transportation costs, (ix) natural disasters, including droughts, floods, and earthquakes in the countries in which we operate, (x)
local disturbances, terrorist attacks, riots, social disruption, or regional hostilities in the countries in which we or our partners and suppliers
operate and (xi) government uncertainty, including as a result of new or changed laws and regulations. We also face the risk that some of
our competitors have more experience with operations in such countries or with international operations generally and may be able to
manage unexpected crises more easily. Furthermore, whether due to language, cultural or other differences, public and other statements
that we make may be misinterpreted, misconstrued, or taken out of context in different jurisdictions. Moreover, the internal political
stability of, or the relationship between, any country or countries where we conduct business operations may deteriorate. Changes in a
country’s political stability or the state of relations between any such countries are difficult to predict and could adversely affect our
operations, profitability and/or adversely impact our ability to do business there. The occurrence of any of the above risks could have a
material adverse effect on our business, financial position, results of operations and/or cash flow, and could cause the market value of our
common stock to decline.

We may have difficulty raising additional capital, which could deprive us of necessary resources to pursue our business plans.

We expect to devote significant capital resources to fund research and development, to maintain existing and secure new manufacturing
resources, and potentially to acquire new product candidates. In order to support the initiatives envisioned in our business plan, we will
likely need to raise additional funds through the sale of assets, public or private debt or equity financing, collaborative relationships or
other arrangements. Our ability to raise additional financing depends on many factors beyond our control, including the state of capital
markets, the market price of our common stock and the development or prospects for development of competitive technology by others.
Sufficient additional financing may not be available to us or may be available only on terms that would result in further dilution to the
current owners of our common stock.

Our future expenditures on our programs are subject to many uncertainties, including whether our product candidates will be developed or
commercialized with a partner or independently. Our future capital requirements will depend on, and could increase significantly as a
result of, many factors, including:

●

the final outcome of the Texas CRG litigation and other litigation;

the costs of seeking regulatory approval for our product candidates, including any nonclinical testing or bioequivalence or
clinical studies, process development, scale-up and other manufacturing and stability activities, or other work required to
achieve such approval, as well as the timing of such activities and approval;

the extent to which we invest in or acquire new technologies, product candidates, products or businesses and the development
requirements with respect to any acquired programs;

the scope, prioritization and number of development and/or commercialization programs we pursue and the rate of progress
and costs with respect to such programs;

the costs related to developing, acquiring and/or contracting for sales, marketing and distribution capabilities and regulatory
compliance capabilities, if we commercialize any of our product candidates for which we obtain regulatory approval without a
partner;

●

the timing and terms of any collaborative, licensing and other strategic arrangements that we may establish;

●

the extent to which we may need to expand our workforce to pursue our business plan, and the costs involved in recruiting,
training, compensating and incentivizing new employees;

the effect of competing technological and market developments; and

the cost involved in establishing, enforcing or defending patent claims and other intellectual property rights.

If we are unsuccessful in raising additional capital, or the terms of raising such capital are unacceptable, we may have to modify our
business plan and/or significantly curtail our planned development activities, acquisition of new product candidates and other operations.

There may be future sales or other dilution of our equity, which may adversely affect the market price of shares of our common stock.

Our existing warrants or other securities convertible into or exchangeable for our common stock, or securities we may issue in the future,
may contain adjustment provisions that could increase the number of shares issuable upon exercise, conversion or exchange, as the case
may be, and decrease the exercise, conversion or exchange price. The market price of our shares of common stock could decline as a result
of sales of a large number of shares of our common stock or other securities in the market, the triggering of any such adjustment provisions
or the perception that such sales could occur in the future.

The final outcome of the Texas CRG litigation may require us to pay up to an additional $7.0 million, which would adversely affect our
financial position.

During the course of 2016, CRG alleged multiple claims of default on the CRG Loan Agreement, and filed suit in the District Court of
Harris County, Texas (the “Texas Court”). On June 22, 2016, CRG exercised control over one of the Company’s primary bank accounts
and took possession of $4.1 million that was on deposit, applying $3.9 million of the cash to various fees, including collection fees, a
prepayment premium and an end-of-term fee. The remaining $189,000 was applied to the principal balance of the debt. Multiple motions,
actions and hearings followed over the remainder of 2016 and into 2017.

On March 3, 2017, the Company entered into a Global Settlement Agreement with MT, CRG, and Cardinal Health 414 to effectuate the
terms of a settlement previously entered into by the parties on February 22, 2017. In accordance with the Global Settlement Agreement, on
March 3, 2017, the Company repaid $59.0 million (the “Deposit Amount”) of its alleged indebtedness and other obligations outstanding
under the CRG Term Loan. Concurrently with payment of the Deposit Amount, CRG released all liens and security interests granted under
the CRG Loan Documents and the CRG Loan Documents were terminated and are of no further force or effect; provided, however, that,
notwithstanding the foregoing, the Company and CRG agreed to continue with their proceeding pending in the Texas Court to fully and
finally determine the actual amount owed by the Company to CRG under the CRG Loan Documents (the “Final Payoff Amount”). The
Company and CRG further agreed that the Final Payoff Amount would be no less than $47.0 million (the “Low Payoff Amount”) and no
more than $66.0 million (the “High Payoff Amount”). In addition, concurrently with the payment of the Deposit Amount and closing of
the Asset Sale, (i) Cardinal Health 414 agreed to post a $7.0 million letter of credit in favor of CRG (at the Company’s cost and expense to
be deducted from the closing proceeds due to the Company, and subject to Cardinal Health 414’s indemnification rights under the
Purchase Agreement) as security for the amount by which the High Payoff Amount exceeds the Deposit Amount in the event the Company
is unable to pay all or a portion of such amount, and (ii) CRG agreed to post a $12.0 million letter of credit in favor of the Company as
security for the amount by which the Deposit Amount exceeds the Low Payoff Amount. If, on the one hand, it is finally determined by the
Texas Court that the amount the Company owes to CRG under the Loan Documents exceeds the Deposit Amount, the Company will pay
such excess amount, plus the costs incurred by CRG in obtaining CRG’s letter of credit, to CRG and if, on the other hand, it is finally
determined by the Texas Court that the amount the Company owes to CRG under the Loan Documents is less than the Deposit Amount,
CRG will pay such difference to the Company and reimburse Cardinal Health 414 for the costs incurred by Cardinal Health 414 in
obtaining its letter of credit. Any payments owing to CRG arising from a final determination that the Final Payoff Amount is in excess of
$59.0 million shall first be paid by the Company without resort to the letter of credit posted by Cardinal Health 414, and such letter of
credit shall only be a secondary resource in the event of failure of the Company to make payment to CRG. The Company will indemnify
Cardinal Health 414 for any costs it incurs in payment to CRG under the settlement, and the Company and Cardinal Health 414 further
agree that Cardinal Health 414 can pursue all possible remedies, including offset against earnout payments (guaranteed or otherwise) under
the Purchase Agreement, warrant exercise, or any other payments owed by Cardinal Health 414, or any of its affiliates, to the Company, or
any of its affiliates, if Cardinal Health 414 incurs any cost associated with payment to CRG under the settlement. The $2.0 million being
held in escrow pursuant to court order in the Ohio case and the $3.0 million being held in escrow pursuant to court order in the Texas case
were released to the Company at closing of the Asset Sale. On March 3, 2017, Cardinal Health 414 posted a $7.0 million letter of credit,
and on March 7, 2017, CRG posted a $12.0 million letter of credit, each as required by the Global Settlement Agreement.

The trial was held in Texas in December 2017. The Texas Court ruled that the Company’s total obligation to CRG is in excess of $66.0
million, limited to $66.0 million under the Global Settlement Agreement. The Texas Court acknowledged only the $59.0 million payment
made in March 2017, concluding that the Company owes CRG another $7.0 million, however the Texas Court did not expressly take the
Company’s June 2016 payment of $4.1 million into account. The Company believes that this $4.1 million should be credited against the
$7 million; CRG disagrees. On January 16, 2018, the Company filed an emergency motion to set supersedeas bond and to modify
judgment, describing the Texas Court’s oversight of not explaining how to apply the $4.1 million payment, requesting that the judgment
be modified to set the supersedeas amount at $2.9 million so that the Company can stay enforcement of the judgment pending appeal. The
Texas Court refused to rule on this motion, and the court of appeals entered an order compelling the Texas Court to set a supersedeas
amount. The Texas Court has scheduled a hearing on the issue for March 26, 2018, however it has not yet set the amount, and
enforcement of the judgment is stayed until seven days after the Texas Court does so. We currently await further action by the Texas
Court. If we are ultimately required to pay an additional $7.0 million to CRG, such payment would have a significant adverse effect on
our financial position and would likely force us to curtail our planned development activities.

Shares of common stock are equity securities and are subordinate to our existing and future indebtedness and preferred stock.

Shares of our common stock are common equity interests. This means that our common stock ranks junior to any preferred stock that we
may issue in the future, to our indebtedness and to all creditor claims and other non-equity claims against us and our assets available to
satisfy claims on us, including claims in a bankruptcy or similar proceeding. Our future indebtedness and preferred stock may restrict
payments of dividends on our common stock.

Additionally, unlike indebtedness, where principal and interest customarily are payable on specified due dates, in the case of our common
stock, (i) dividends are payable only when and if declared by our Board of Directors or a duly authorized committee of our Board of
Directors, and (ii) as a corporation, we are restricted to making dividend payments and redemption payments out of legally available
assets. We have never paid a dividend on our common stock and have no current intention to pay dividends in the future. Furthermore, our
common stock places no restrictions on our business or operations or on our ability to incur indebtedness or engage in any transactions,
subject only to the voting rights available to shareholders generally.

The continuing contentious federal budget negotiations may have an impact on our business and financial condition in ways that we
currently cannot predict, and may further limit our ability to raise additional funds.

The continuing federal budget disputes not only may adversely affect financial markets, but could also delay or reduce research grant
funding and adversely affect operations of government agencies that regulate us, including the FDA, potentially causing delays in
obtaining key regulatory approvals. Research funding for life science research has increased more slowly during the past several years
compared to previous years and has declined in some countries, and some grants have been frozen for extended periods of time or
otherwise become unavailable to various institutions, sometimes without advance notice. Government funding of research and
development is subject to the political process, which is inherently fluid and unpredictable. Other programs, such as homeland security or
defense, or general efforts to reduce the federal budget deficit could be viewed by the U.S. government as a higher priority. These
budgetary pressures may result in reduced allocations to government agencies that fund research and development activities. National
Institute of Health and other research and development allocations have been diminished in recent years by federal budget control efforts.
The prolonged or increased shift away from the funding of life sciences research and development or delays surrounding the approval of
government budget proposals may result in reduced research grant funding, which could delay development of our product candidates.

Our failure to maintain continued compliance with the listing requirements of the NYSE American exchange could result in the delisting of
our common stock.

Our common stock has been listed on the NYSE American since February 2011. The rules of NYSE American provide that shares be
delisted from trading in the event the financial condition and/or operating results of the Company appear to be unsatisfactory, the extent of
public distribution or the aggregate market value of the common stock has become so reduced as to make further dealings on the NYSE
American inadvisable, the Company has sold or otherwise disposed of its principal operating assets, or has ceased to be an operating
company, or the Company has failed to comply with its listing agreements with the Exchange. For example, the NYSE American may
consider suspending trading in, or removing the listing of, securities of an issuer that has stockholders’ equity of less than $6.0 million if
such issuer has sustained losses from continuing operations and/or net losses in its five most recent fiscal years. As of December 31, 2017,
the Company had stockholders’ equity of approximately $12.0 million. However, the Company had stockholders’ deficits for several years
prior to December 31, 2017, and we may not be able to maintain stockholders’ equity in the future. Even if an issuer has a stockholders’
deficit, the NYSE American will not normally consider removing from the list securities of an issuer that fails to meet these requirements
if the issuer has (1) total value of market capitalization of at least $50,000,000; or total assets and revenue of $50,000,000 each in its last
fiscal year, or in two of its last three fiscal years; and (2) the issuer has at least 1,100,000 shares publicly held, a market value of publicly
held shares of at least $15,000,000 and 400 round lot shareholders. Based on the number of outstanding shares of our common stock,
recent trading price of that stock, and number of round lot holders, we believe that we meet these exception criteria and that our common
stock will not be delisted as a result of our failure to meet the minimum stockholders' equity requirement for continued listing. The
Company may not be able to continue to meet these and other requirements necessary to maintain the listing of our common stock on the
NYSE American. For example, we may determine to grow our organization or product pipeline or pursue development or other activities
at levels or on timelines that reduces our stockholders’ equity below the level required to maintain compliance with NYSE American
continued listing standards.

The NYSE American Company Guide also provides that the Exchange may suspend or remove from listing any common stock selling for
a substantial period of time at a low price per share, if the issuer shall fail to effect a reverse split of such shares within a reasonable time
after being notified that the Exchange deems such action to be appropriate under all the circumstances. The Company’s common stock has
recently traded for a price as low as $0.31 per share, and if the low trading price persists, there is a risk that the Exchange may require the
Company to effect a reverse split of its common stock in order to maintain its NYSE American listing, and that the shares will be delisted if
such action is not taken to the satisfaction of the NYSE American.

The delisting of our common stock from the NYSE American likely would reduce the trading volume and liquidity in our common stock
and may lead to decreases in the trading price of our common stock. The delisting of our common stock may also materially impair our
stockholders’ ability to buy and sell shares of our common stock. In addition, the delisting of our common stock could significantly impair
our ability to raise capital, which is critical to the execution of our current business strategy.

The price of our common stock has been highly volatile due to several factors that will continue to affect the price of our stock.

Our common stock traded as low as $0.31 per share and as high as $0.85 per share during the 12-month period ended February 28, 2018.
The market price of our common stock has been and is expected to continue to be highly volatile. Factors, including announcements of
technological innovations by us or other companies, regulatory matters, new or existing products or procedures, concerns about our
financial position, operating results, litigation, government regulation, developments or disputes relating to agreements, patents or
proprietary rights, may have a significant impact on the market price of our stock. In addition, potential dilutive effects of future sales of
shares of common stock by the Company and by stockholders, and subsequent sale of common stock by the holders of warrants and
options could have an adverse effect on the market price of our shares.

Some additional factors which could lead to the volatility of our common stock include:

●

price and volume fluctuations in the stock market at large or of companies in our industry which do not relate to our operating
performance;

changes in securities analysts’ estimates of our financial performance or deviations in our business and the trading price of our
common stock from the estimates of securities analysts;

FDA or international regulatory actions and regulatory developments in the United States and foreign countries;

financing arrangements we may enter that require the issuance of a significant number of shares in relation to the number of
shares currently outstanding;

public concern as to the safety of products that we or others develop;

activities of short sellers in our stock; and

fluctuations in market demand for and supply of our products.

The realization of any of the foregoing could have a dramatic and adverse impact on the market price of our common stock. In addition,
class action litigation has often been instituted against companies whose securities have experienced substantial decline in market price.
Moreover, regulatory entities often undertake investigations of investor transactions in securities that experience volatility following an
announcement of a significant event or condition. Any such litigation brought against us or any such investigation involving our investors
could result in substantial costs and a diversion of management’s attention and resources, which could hurt our business, operating results
and financial condition.

An investor’s ability to trade our common stock may be limited by trading volume.

During the 12-month period beginning on March 1, 2017 and ending on February 28, 2018, the average daily trading volume for our
common stock on the NYSE American was approximately 435,000 shares. However, this trading volume may not be consistently
maintained in the future. If the trading volume for our common stock decreases, there could be a relatively limited market for our common
stock and the share price of our common stock would be more likely to be affected by broad market fluctuations, general market
conditions, fluctuations in our operating results, changes in the market’s perception of our business and announcements made by us, our
competitors or parties with whom we have business relationships. There may also be fewer institutional investors willing to hold or acquire
our common stock. Such a lack of liquidity in our common stock may make it difficult for us to issue additional securities for financing or
other purposes or to otherwise arrange for any financing that we may need in the future.

The market price of our common stock may be adversely affected by market conditions affecting the stock markets in general, including
price and trading fluctuations on the NYSE American exchange.

The market price of our common stock may be adversely affected by market conditions affecting the stock markets in general, including
price and trading fluctuations on the NYSE American. These conditions may result in (i) volatility in the level of, and fluctuations in, the
market prices of stocks generally and, in turn, our shares of common stock, and (ii) sales of substantial amounts of our common stock in
the market, in each case that could be unrelated or disproportionate to changes in our operating performance.

Because we do not expect to pay dividends on our common stock in the foreseeable future, stockholders will only benefit from owning
common stock if it appreciates.

We have paid no cash dividends on any of our common stock to date, and we currently intend to retain our future earnings, if any, to fund
the development and growth of our business. As a result, with respect to our common stock, we do not expect to pay any cash dividends in
the foreseeable future, and payment of cash dividends, if any, will also depend on our financial condition, results of operations, capital
requirements and other factors and will be at the discretion of our Board of Directors. Furthermore, we are subject to various laws and
regulations that may restrict our ability to pay dividends and we may in the future become subject to contractual restrictions on, or
prohibitions against, the payment of dividends. Due to our intent to retain any future earnings rather than pay cash dividends on our
common stock and applicable laws, regulations and contractual obligations that may restrict our ability to pay dividends on our common
stock, the success of your investment in our common stock will likely depend entirely upon any future appreciation and there is no
guarantee that our common stock will appreciate in value.

We may have difficulty attracting and retaining qualified personnel and our business may suffer if we do not.

Our business has experienced a number of successes and faced several challenges in recent years that have resulted in several significant
changes in our strategy and business plan, including the shifting of resources to support our current development initiatives. Our
management will need to remain flexible to support our business model over the next few years. However, losing members of the Navidea
management team could have an adverse effect on our operations. Our success depends on our ability to attract and retain technical and
management personnel with expertise and experience in the pharmaceutical industry, and the acquisition of additional product candidates
may require us to acquire additional highly qualified personnel. The competition for qualified personnel in the biotechnology industry is
intense and we may not be successful in hiring or retaining the requisite personnel. If we are unable to attract and retain qualified technical
and management personnel, we will suffer diminished chances of future success.

Healthcare reform measures could hinder or prevent the commercial success of our products.

In March 2010, President Obama signed into law a legislative overhaul of the U.S. healthcare system, the Patient Protection and
Affordable Care Act (the “PPACA”), which had far-reaching consequences for many healthcare companies, including diagnostic
companies like ours. For example, if reimbursement for our products is substantially less than we or our customers expect, our business
could be materially and adversely impacted. However, the future of the PPACA is uncertain and at this juncture there will be a period of
uncertainty regarding the PPACA’s repeal, modification or replacement or the effect of the changes made to the PPACA under the Tax
Cuts and Jobs Act of 2017, any of which could have long term financial impact on the delivery of and payment for healthcare in the United
States.

Regardless of the impact of the PPACA on us, the U.S. government and other governments have shown significant interest in pursuing
healthcare reform and reducing healthcare costs. Any government-adopted reform measures could cause significant pressure on the
pricing of healthcare products and services in the United States and internationally, as well as the amount of reimbursement available from
governmental agencies and other third-party payors.

Actual and anticipated changes to the regulations of the healthcare system and U.S. tax laws may have a negative impact on the cost of
healthcare coverage and reimbursement of healthcare services and products.

The FDA and comparable agencies in other jurisdictions directly regulate many critical activities of life science, technology, and
healthcare industries, including the conduct of preclinical and clinical studies, product manufacturing, advertising and promotion, product
distribution, adverse event reporting, and product risk management. In both domestic and foreign markets, sales of products depend in part
on the availability and amount of reimbursement by third-party payors, including governments and private health plans. Governments may
regulate coverage, reimbursement, and pricing of products to control cost or affect utilization of products. Private health plans may also
seek to manage cost and utilization by implementing coverage and reimbursement limitations. Substantial uncertainty exists regarding the
reimbursement by third-party payors of newly approved healthcare products. The U.S. and foreign governments regularly consider reform
measures that affect healthcare coverage and costs. Such reforms may include changes to the coverage and reimbursement of healthcare
services and products. In particular, there have been recent judicial and Congressional challenges to the PPACA, which could have an
impact on coverage and reimbursement for healthcare services covered by plans authorized by the PPACA, and we expect there will be
additional challenges and amendments to the PPACA in the future.

Attempts to repeal or to repeal and replace the PPACA will likely continue under the current Congress. In addition, various other
healthcare reform proposals have emerged at the federal and state level. The recent changes to U.S. tax laws could also negatively impact
the PPACA. We cannot predict what healthcare initiatives or tax law changes, if any, will be implemented at the federal or state level,
however, government and other regulatory oversight and future regulatory and government interference with the healthcare systems could
adversely impact our business.

We may not be able to maintain compliance with our internal controls and procedures.

We regularly review and update our internal controls, disclosure controls and procedures, and corporate governance policies. In addition,
we are required under the Sarbanes Oxley Act of 2002 to report annually on our internal control over financial reporting. Any system of
internal controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not
absolute, assurances that the objectives of the system are met. Any failure or circumvention of the controls and procedures or failure to
comply with regulation concerning control and procedures could have a material effect on our business, results of operation and financial
condition. Any of these events could result in an adverse reaction in the financial marketplace due to a loss of investor confidence in the
reliability of our financial statements, which ultimately could negatively affect the market price of our shares, increase the volatility of our
stock price and adversely affect our ability to raise additional funding. The effect of these events could also make it more difficult for us to
attract and retain qualified persons to serve on our Board of Directors and our Board committees and as executive officers.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We currently lease approximately 5,000 square feet of office space at 4995 Bradenton Avenue, Dublin, Ohio, as our principal offices. The
current least term expires in June 2020, at a monthly base rent of approximately $3,000. We must also pay a pro-rata portion of the
operating expenses and real estate taxes of the building. We also lease approximately 2,000 square feet of office space at 560 Sylvan
Avenue, Englewood Cliffs, New Jersey. The current lease term expires in March 2018, at a monthly base rent of approximately $3,000.
We must also pay a pro-rata portion of the electricity costs of the building. The New Jersey office is primarily for the use of Dr. Goldberg
and Mr. Latkin and the planned hires in business and corporate development for both Navidea and Macrophage Therapeutics. We believe
that this location improves our access to qualified candidates, as it is located in close proximity to the headquarters of many large
pharmaceutical companies which are located in New York City and New Jersey. It also places our senior management closer to the
institutional investors who are the thought leaders in the life science investing marketplace. We believe both facilities are in good
condition.

We also currently lease approximately 25,000 square feet of office space at 5600 Blazer Parkway, Dublin, Ohio, formerly our principal
offices. The current lease term expires in October 2022, at a monthly base rent of approximately $26,000 during 2018. We must also pay a
pro-rata portion of the operating expenses and real estate taxes of the building. In June 2017, the Company executed a sublease
arrangement for the Blazer space, providing for monthly sublease payments to Navidea of approximately $39,000 through October 2022.

Item 3. Legal Proceedings

Sinotau Litigation – NAV4694

On August 31, 2015, Sinotau filed a suit for damages, specific performance, and injunctive relief against the Company in the U.S. District
Court for the District of Massachusetts alleging breach of a letter of intent for licensing to Sinotau of the Company’s NAV4694 product
candidate and technology (the “Sinotau Litigation”). In September 2016, the Court denied the Company’s motion to dismiss. The
Company filed its answer to the complaint and the parties have filed multiple joint motions to stay the case pending settlement discussion,
which to date have been granted. On October 26, 2017, the Company executed a letter of intent with Sinotau and Cerveau, outlining a
plan to sublicense to Cerveau the worldwide rights to conduct research using NAV4694, as well as grant to Cerveau an exclusive license
for the development, marketing and commercialization of NAV4694 in Australia, Canada, China and Singapore. The letter of intent
includes a provision stating that Sinotau will release all claims in the Sinotau Litigation upon the parties’ execution of a definitive
agreement; the commercial rights agreement contemplated by the letter of intent would also include a release of such claims and a
covenant not to sue on such claims.

CRG Litigation

During the course of 2016, CRG alleged multiple claims of default on the CRG Loan Agreement, and filed suit in the District Court of
Harris County, Texas on April 7, 2016. On June 22, 2016, CRG exercised control over one of the Company’s primary bank accounts and
took possession of $4.1 million that was on deposit, applying $3.9 million of the cash to various fees, including collection fees, a
prepayment premium and an end-of-term fee. The remaining $189,000 was applied to the principal balance of the debt. Multiple motions,
actions and hearings followed over the remainder of 2016 and into 2017.

Concurrently with the payment of the Deposit Amount and closing of the Asset Sale, (i) Cardinal Health 414 posted a $7.0 million letter of
credit in favor of CRG (at the Company’s cost and expense to be deducted from the closing proceeds due to the Company, and subject to
Cardinal Health 414’s indemnification rights under the Purchase Agreement) as security for the amount by which the High Payoff Amount
exceeds the Deposit Amount in the event the Company is unable to pay all or a portion of such amount, and (ii) CRG posted a $12.0
million letter of credit in favor of the Company as security for the amount by which the Deposit Amount exceeds the Low Payoff Amount.
If, on the one hand, it is finally determined by the Texas Court that the amount the Company owes to CRG under the Loan Documents
exceeds the Deposit Amount, the Company will pay such excess amount, plus the costs incurred by CRG in obtaining CRG’s letter of
credit, to CRG and if, on the other hand, it is finally determined by the Texas Court that the amount the Company owes to CRG under the
Loan Documents is less than the Deposit Amount, CRG will pay such difference to the Company and reimburse Cardinal Health 414 for
the costs incurred by Cardinal Health 414 in obtaining its letter of credit. Any payments owing to CRG arising from a final determination
that the Final Payoff Amount is in excess of $59.0 million shall first be paid by the Company without resort to the letter of credit posted by
Cardinal Health 414, and such letter of credit shall only be a secondary resource in the event of failure of the Company to make payment to
CRG. The Company will indemnify Cardinal Health 414 for any costs it incurs in payment to CRG under the settlement, and the Company
and Cardinal Health 414 further agree that Cardinal Health 414 can pursue all possible remedies, including offset against earnout payments
(guaranteed or otherwise) under the Purchase Agreement, warrant exercise, or any other payments owed by Cardinal Health 414, or any of
its affiliates, to the Company, or any of its affiliates, if Cardinal Health 414 incurs any cost associated with payment to CRG under the
settlement. The $2.0 million being held in escrow pursuant to court order in the Ohio case and the $3.0 million being held in escrow
pursuant to court order in the Texas case were released to the Company at closing of the Asset Sale.

Navidea’s management believes it is probable that the Company will be required to pay the $2.9 million modified judgment requested in
January 2018, and as such we accrued a loss contingency for that amount as a current liability on the December 31, 2017 consolidated
balance sheet. The loss contingency of $2.9 million was recorded as an additional loss on extinguishment of the CRG Term Loan on the
consolidated statement of operations for the year ended December 31, 2017.

Former CEO Arbitration

On May 12, 2016 the Company received a demand for arbitration through the American Arbitration Association, Columbus, Ohio, from
Ricardo J. Gonzalez, the Company’s then Chief Executive Officer, claiming that he was terminated without cause and, alternatively, that
he resigned in accordance with Section 4G of his Employment Agreement pursuant to a notice received by the Company on May 9, 2016.
On May 13, 2016, the Company notified Mr. Gonzalez that his failure to undertake responsibilities assigned to him by the Board of
Directors and otherwise work after being ordered to do so on multiple occasions constituted an effective resignation, and the Company
accepted that resignation. The Company rejected the resignation of Mr. Gonzalez pursuant to certain provisions in Section 4G of his
Employment Agreement. Also, the Company notified Mr. Gonzalez that, alternatively, his failure to return to work after the expiration of
the cure period provided in his Employment Agreement constituted cause for his termination under his Employment Agreement. Mr.
Gonzalez was seeking severance and other amounts claimed to be owed to him under his Employment Agreement. In response, the
Company filed counterclaims against Mr. Gonzalez alleging malfeasance by Mr. Gonzalez in his role as Chief Executive Officer. Mr.
Gonzalez withdrew his claim for additional severance pursuant to his Employment Agreement, and the Company withdrew its
counterclaims. On May 12, 2017, the Company received a ruling in favor of Mr. Gonzalez finding that he was terminated by the Company
without cause on April 7, 2016. Mr. Gonzalez was awarded salary, bonus, and benefits in the aggregate amount of $481,039 plus interest,
attorneys’ fees, and other costs. The arbitration award is final and binding on the parties. The Company paid an aggregate of $617,880 to
Mr. Gonzalez on May 16, 2017.

FTI Consulting, Inc. Litigation

On October 11, 2016, FTI Consulting, Inc. (“FTI”) commenced an action against the Company in the Supreme Court of the State of New
York, County of New York, seeking damages in excess of $782,600 comprised of: (i) $730,264 for investigative and consulting services
FTI alleges to have provided to the Company pursuant to an Engagement Agreement between FTI and the Company, and (ii) in excess of
$52,337 for purported interest due on unpaid invoices, plus attorneys’ fees, costs and expenses. On November 14, 2016, the Company
filed an Answer and Counterclaim denying the allegations of the Complaint and seeking damages on its Counterclaim, in an amount to be
determined at trial, for intentional overbilling by FTI. On February 7, 2017, a preliminary conference was held by the Court at which time
a scheduling order governing discovery was issued. On June 26, 2017, the Company and FTI entered into a settlement agreement.
According to FTI, as of June 2017, FTI was owed $862,165 including interest charges and legal fees. Under the terms of the settlement
agreement, the Company paid an aggregate of $435,000 to FTI on June 30, 2017.

Sinotau Litigation – Tc99m Tilmanocept

On February 1, 2017, Navidea filed suit against Sinotau in the U.S. District Court for the Southern District of Ohio. The Company's
complaint included claims seeking a declaration of the rights and obligations of the parties to an agreement regarding rights for the Tc99m
tilmanocept product in China and other claims. The complaint sought a temporary restraining order (“TRO”) and preliminary injunction to
prevent Sinotau from interfering with the Company’s Asset Sale to Cardinal Health 414. On February 3, 2017, the Court granted the TRO
and extended it until March 6, 2017. The Asset Sale closed on March 3, 2017. On March 6, the Court dissolved the TRO as moot.
Sinotau also filed a suit against the Company and Cardinal Health 414 in the U.S. District Court for the District of Delaware on February
2, 2017. On July 12, 2017, the District of Delaware case was transferred to the Southern District of Ohio. On July 27, 2017 the Ohio
Court determined that both cases in the Southern District of Ohio are related and the case was stayed for 60 days pending settlement
discussions. On February 8, 2018, Navidea and Sinotau executed an amendment to the agreement, modifying certain terms of the
agreement and effectively resolving the legal dispute. On February 17, 2018, Navidea and Sinotau executed a Settlement Agreement and
Mutual Release, and on February 20, 2018, Navidea and Sinotau voluntarily dismissed their legal cases.

Platinum-Montaur Life Sciences LLC

On November 2, 2017, Platinum-Montaur Life Sciences LLC (“Platinum-Montaur”) commenced an action against the Company in the
Supreme Court of the State of New York, County of New York, seeking damages in the amount of $1,914,827.22 purportedly due as of
March 3, 2017, plus interest accruing thereafter. The claims asserted are for breach of contract and unjust enrichment in connection with
funds received by the Company under the Platinum Loan Agreement (discussed below). Said action was removed to the United States
District of New York on December 6, 2017. An initial pretrial conference was held on January 26, 2018. At the conference the Court
stayed the deadline for the Company to answer or otherwise respond to the complaint. The Court also directed the parties to engage in
informal jurisdictional discovery and a follow up status conference was held on March 9, 2018, during which the Court set a briefing
schedule and determined that Navidea’s motion to dismiss is due on April 6, 2018. The Court also referred the case to a settlement
conference, which has been scheduled for April 30, 2018. Because the funds sought by Platinum-Montaur are subject to claims of
competing ownership, the Company intends to defend itself in the action and seek a determination as to whether any funds are due and
owing to the plaintiff.

Item 4. Mine Safety Disclosure

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock trades on the NYSE American exchange under the trading symbol “NAVB.” Prior to our name change from Neoprobe
Corporation to Navidea Biopharmaceuticals, Inc. on January 5, 2012, our common stock was traded on the NYSE American under the
trading symbol NEOP. The prices set forth below reflect the quarterly high and low sales prices for shares of our common stock during the
last two fiscal years.

Fiscal Year 2017:
First Quarter
Second Quarter
Third Quarter
Fourth Quarter

Fiscal Year 2016:
First Quarter
Second Quarter
Third Quarter
Fourth Quarter

High

Low

0.85 $
0.62
0.51
0.68

1.35 $
1.51
1.14
1.16

0.29
0.43
0.37
0.35

0.75
0.51
0.26
0.57

As of March 1, 2018, we had approximately 600 holders of common stock of record.

We have not paid any dividends on our common stock and do not anticipate paying cash dividends on our common stock in the
foreseeable future. We intend to retain any earnings to finance the growth of our business and we may never pay cash dividends. Whether
we pay cash dividends in the future will be at the discretion of our Board of Directors and will depend upon our financial condition, results
of operations, capital requirements and any other factors that the Board of Directors decides are relevant. See Management’s Discussion
and Analysis of Financial Condition and Results of Operations.

There were no repurchases of our common stock during the three-month period ended December 31, 2017.

Stock Performance Graph

The following graph compares the cumulative total return on a $100 investment in each of the common stock of the Company, the Russell
3000, and the NASDAQ Biotechnology Index for the period from December 31, 2012 through December 31, 2017. This graph assumes an
investment in the Company’s common stock and the indices of $100 on December 31, 2012 and that any dividends were reinvested.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

Among Navidea Biopharmaceuticals, the Russell 3000 Index, and the NASDAQ Biotechnology Index

$100 invested on 12/31/2012 in stock or index, including reinvestment of dividends.

2012

2013

2014

2015

2016

2017

Cumulative Total Return as of December 31,

Navidea Biopharmaceuticals
Russell 3000
NASDAQ Biotechnology

100.00 $
100.00
100.00

73.14 $
130.95
165.61

66.78 $
144.63
222.08

47.00 $
142.50
247.44

22.61 $
157.34
193.79

12.72
187.01
234.60

Item 6. Selected Financial Data

The following summary financial data are derived from our consolidated financial statements that have been audited by our independent
registered public accounting firms. These data are qualified in their entirety by, and should be read in conjunction with, our Consolidated
Financial Statements and Notes thereto included elsewhere in this Form 10-K as well as Management’s Discussion and Analysis of
Financial Condition and Results of Operations.

On March 3, 2017, Navidea completed the sale to Cardinal Health 414 of its assets used, held for use, or intended to be used in operating
its business of developing, manufacturing and commercializing a product used for lymphatic mapping, lymph node biopsy, and the
diagnosis of metastatic spread to lymph nodes for staging of cancer, including the Company’s radioactive diagnostic agent marketed under
the Lymphoseek® trademark for current approved indications by the FDA and similar indications approved by the FDA in the future, in
Canada, Mexico and the United States. As a result of the Asset Sale, the Company’s consolidated balance sheets and statements of
operations have been reclassified, as required, for all periods presented to reflect the Business as a discontinued operation.

Summary financial data for 2013 to 2015 also reflect the disposition of our gamma detection device business in August 2011 and the
reclassification of certain related items to discontinued operations.

(Amounts in thousands, except per share data)

Years Ended December 31,

Statement of Operations Data:
Revenue
Cost of goods sold
Research and development expenses
Selling, general and administrative expenses
Loss from operations
Other income (expense), net
Benefit from income taxes
Loss from continuing operations
Discontinued operations, net of tax effect
Net income (loss)
Less loss attributable to noncontrolling interest
Deemed dividend
Income (loss) attributable to common stockholders
Income (loss) per common share (basic):

Continuing operations
Discontinued operations
Income (loss) attributable to common stockholders

Weighted average shares outstanding (basic) 1
Income (loss) per common share (diluted):
Continuing operations
Discontinued operations
Income (loss) attributable to common stockholders
Weighted average shares outstanding (diluted) 2

$
$
$

2017

2016

2015

2014

2013
(unaudited)

1,810 $
4
4,513
11,170
(13,877)
(3,913)
4,062
(13,727)
88,673
74,946
—
—
74,946 $

(0.08) $
0.55 $
0.47 $
161,593

(0.08) $
0.53 $
0.45 $
166,016

4,972 $
62
7,138
7,920
(10,149)
2,771
—
(7,378)
(6,931)
(14,309)
(1)
—
(14,308) $

(0.05) $
(0.04) $
(0.09) $
155,422

3,013 $
3
10,563
10,888
(18,441)
(4,604)
436
(22,609)
(4,955)
(27,564)
(1)
(46)
(27,609) $

(0.15) $
(0.03) $
(0.18) $
151,180

2,054 $
3
15,117
9,526
(22,591)
(7,767)
—
(30,359)
(5,368)
(35,727)
—
—
(35,727) $

(0.20) $
(0.04) $
(0.24) $
148,748

523
1
17,659
10,578
(27,715)
(3,792)
—
(31,508)
(11,192)
(42,699)
—
—
(42,699)

(0.26)
(0.09)
(0.35)
121,809

Balance Sheet Data:
Total assets
Long-term liabilities
Accumulated deficit

As of December 31,

2017

2016

2015

2014

2013
(unaudited)

20,781 $
665
(319,909)

12,462 $
10,266
(394,855)

14,965 $
62,616
(380,547)

11,830 $
32,573
(352,984)

39,626
32,703
(317,257)

(1)

(2)

Basic earnings (loss) per share is calculated by dividing net income (loss) attributable to common stockholders by the
weighted-average number of common shares and, except for periods with a loss from operations, participating securities
outstanding during the period.
Diluted earnings (loss) per share reflects additional common shares that would have been outstanding if dilutive potential
common shares had been issued. Potential common shares that may be issued by the Company include convertible securities,
convertible debt, options and warrants.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read together with our Consolidated Financial Statements and the Notes related to those statements,
as well as the other financial information included in this Form 10-K. Some of our discussion is forward-looking and involves risks and
uncertainties. For information regarding risk factors that could have a material adverse effect on our business, refer to Item 1A of this
Form 10-K, Risk Factors.

The Company

Navidea Biopharmaceuticals, Inc. is a biopharmaceutical company focused on the development and commercialization of precision
immunodiagnostic agents and immunotherapeutics. Navidea is developing multiple precision-targeted products based on our Manocept
platform to enhance patient care by identifying the sites and pathways of undetected disease and enable better diagnostic accuracy, clinical
decision-making and targeted treatment.

On March 3, 2017, the Company completed the Asset Sale to Cardinal Health 414, as discussed previously under “Development of the
Business.” Pursuant to the Purchase Agreement, we sold all of our assets used, held for use, or intended to be used in operating the
Business, including Lymphoseek, in Canada, Mexico and the United States. Upon closing of the Asset Sale, the Supply and Distribution
Agreement between Cardinal Health 414 and the Company was terminated and, as a result, the provisions thereof are of no further force or
effect.

The Asset Sale to Cardinal Health 414 significantly improved our financial condition and our ability to continue as a going concern. The
Company also continues working to establish new sources of non-dilutive funding, including collaborations and grant funding that can
augment the balance sheet as the Company works to reduce spending to levels that can be supported by our revenues.

Executive Summary

The flexible and versatile Manocept acts as a platform molecular engine for the design of targeted imaging molecules applicable to a range
of diagnostic modalities, including SPECT, PET, gamma-scanning (both imaging and topical) and intra-operative and/or optical-
fluorescence detection. Active clinical diagnostic programs in several diseases (discussed below) representing specific macrophage
activation states are ongoing.

Cardiovascular Disease – A nine-subject study to evaluate diagnostic imaging of emerging atherosclerosis plaque with the Tc99m
tilmanocept product dosed subcutaneously was completed (ClinicalTrials.gov NCT02542371). The results of this study were presented at
two major international meetings (CROI and SNMMI, 2017) and published in early release in the Journal of Infectious Diseases in January
2017 (published in the circulated version, Journal of Infectious Diseases (2017) 215 (8): 1264-1269), confirming that the Tc99m
tilmanocept product can both quantitatively and qualitatively target non-calcified plaque in the aortic arch of AIDS patients (supported by
NIH/NHLBI Grant 1 R43 HL127846-01). We have also begun a second Phase1/2 study in cooperation with Massachusetts General
Hospital. This study expands the initial investigation to the assessment of not only aortic plaque but also carotid and coronary arteries. In
addition, we have applied for follow-on NIH/NHLBI support to fund additional clinical studies. These studies are currently under
development and design for Phase 2 trials.

Rheumatoid Arthritis – Two Tc99m tilmanocept dose escalation studies in RA have been initiated. The first study, now complete
(ClinicalTrials.gov NCT02683421), included 18 subjects (9 with active disease and 9 healthy subjects) dosed subcutaneously with 50 and
200 µg/2mCi Tc99m tilmanocept. The results of this study were presented at three international meetings, including BIO, SNMMI, and
ACR, 2017. This study is submitted for peer review publication. In addition, based on completion of extensive preclinical dosing studies
pursuant to our dialog with the FDA, we have completed a study involving IV dosing of Tc99m tilmanocept (ClinicalTrials.gov
NCT02865434). In conjunction with this study, we have completed PK and PD phases in human subjects as well. The majority of the
studies have been supported through a SBIR grant (NIH/NIAMSD Grant 1 R44 AR067583-01A1). We anticipate a presentation of the
results at the 2018 SNMMI meeting and full published results thereafter.

Kaposi’s Sarcoma – Although we initiated and completed a study of KS in 2015 (ClinicalTrials.gov NCT022201420), we received
additional funding from the NIH in 2016 to continue both diagnostic and therapeutic studies in this disease. The new support not only
continues the imaging of the cutaneous form of this disease but expands this to imaging of visceral disease via IV administration of Tc99m
tilmanocept (NIH/NCI 1 R44 CA192859-01A1; ClinicalTrials.gov NCT03157167). Additionally, we received funding to support the
therapeutic initiative for KS employing a select form of the MT-1001.3 agent under current evaluation. The Company has already
completed a portion of the Phase 1 SBIR portion of this award (NIH/NCI 1 R44 CA206788-01) and will complete Phase 2 of the award
with FDA IND filing.

Colorectal Cancer and Synchronous Liver Metastases – During the first quarter of 2017, we initiated an imaging study in subjects with
CRC and liver metastases via IV administration of Tc99m tilmanocept. This study has results but will continue to enroll subjects (up to 12
subjects with dose modification; this study may also be expanded depending on NIH/NCI funding). This study is supported through a
SBIR grant (NIH/NCI 1 R44 CA1962783-01A1; ClinicalTrials.gov NCT03029988).

Nonalcoholic Steatosis Hepatitis – Navidea has initiated a study in the imaging of NASH. This study (ClinicalTrials.gov NCT03332940) is
designed to enroll 12 subjects with IV administration of Tc99m tilmanocept and an imaging comparator, and includes dose escalation
modification for Tc99m tilmanocept. This study is ongoing and has results which will be reported later in the year.

Based on performance in these very large imaging market opportunities the Company anticipates continued investment in these programs
including initiating studies designed to obtain new approvals for the Tc99m tilmanocept product.

The Company has completed further preclinical studies employing both MT 1000-class and 2000-class therapeutic conjugates of
Manocept. The highly positive results from these studies are indicative of Manocept’s specific targeting supported by its notable binding
affinity to CD206 receptors. This high specificity is a foundation of the potential for this technology to be useful in treating diseases linked
to the over-activation of macrophages. This includes various cancers as well as autoimmune, infectious, CV and CNS diseases. Our efforts
in this area were further supported by the 2015 formation of MT, a majority-owned subsidiary that was formed specifically to explore
therapeutic applications for the Manocept platform. Results of these preclinical efforts will be published later this year pending the
conclusion of intellectual property applications.

We continue to seek to partner or out-license NAV4694. The NAV5001 sublicense was terminated in April 2015.

In the near term, the Company intends to continue to develop our additional imaging product candidates into advanced clinical testing with
the goal of extending the regulatory approvals for use of the Tc99m tilmanocept product. We will also be evaluating potential funding and
other resources required for continued development, regulatory approval and commercialization of any Manocept platform product
candidates that we identify for further development, and potential options for advancing development.

Our Outlook

Our operating expenses in recent years have been focused primarily on support of Tc99m tilmanocept, our Manocept platform, and
NAV4694 and NAV5001 product development. We incurred approximately $4.5 million, $7.1 million and $10.6 million in total on
research and development activities during the years ended December 31, 2017, 2016 and 2015, respectively. Of the total amounts we
spent on research and development during those periods, excluding costs related to our internal research and development headcount and
our general and administrative staff which we do not currently allocate among the various development programs that we have underway,
we incurred out-of-pocket charges by program as follows:

Development Program (a)
Tc99m tilmanocept
Manocept platform
Macrophage Therapeutics
NAV4694 (b)
NAV5001 (b)

2017

2016

2015

359,398 $
2,329,586
652,947
(371,588)
(91,336)

2,002,449 $
1,045,102
679,961
1,590,607
97,602

2,365,128
767,431
538,813
3,448,724
385,344

(a)

(b)

Amounts reflect projects included in discontinued operations in the consolidated statements of operations. Certain
development program expenditures were offset by grant reimbursement revenues totaling $1.7 million, $2.8 million, and
$1.7 million during the years ended December 31, 2017, 2016 and 2015, respectively.

Changes in cost estimates resulted in the reversal of certain previously accrued expenses related to the NAV4694 and NAV5001
development programs during the year ended December 31, 2017.

We expect to continue the advancement of our efforts with our Manocept platform during 2018. The divestiture of NAV5001 and the
suspension of active patient accrual in our NAV4694 trials have decreased our development costs over the past year. We expect our total
research and development expenses, including both out-of-pocket charges as well as internal headcount and support costs, to be higher in
2018 than in 2017.

Tc99m tilmanocept is approved by the EMA for use in imaging and intraoperative detection of sentinel lymph nodes draining a primary
tumor in adult patients with breast cancer, melanoma, or localized squamous cell carcinoma of the oral cavity in the EU. Following the
January 2017 transfer of the Tc99m tilmanocept Marketing Authorization to SpePharm, we transferred responsibility for manufacturing
the reduced-mass vial for the EU market to SpePharm. During the second quarter of 2017, SpePharm launched Tc99m tilmanocept in
select EU markets, providing a number of early adopters with sample doses to provide exposure to the product. EU sales commenced
during the third quarter of 2017. We anticipate that we will incur costs related to supporting our product, regulatory, manufacturing and
commercial activities related to the potential marketing registration and sale of Tc99m tilmanocept in markets other than the EU. There
can be no assurance that Tc99m tilmanocept will achieve regulatory approval in any market other than the EU, or if approved in those
markets, that it will achieve market acceptance in the EU or any other market. See Risk Factors.

We are currently evaluating existing and emerging data on the potential use of Manocept-related agents in the diagnosis and disease-
staging of disorders in which macrophages are involved, such as KS, RA, vulnerable plaque/atherosclerosis, TB and other disease states, to
define areas of focus, development pathways and partnering options to capitalize on the Manocept platform. We will also be evaluating
potential funding and other resources required for continued development, regulatory approval and commercialization of any Manocept
platform product candidates that we identify for further development, and potential options for advancing development. There can be no
assurance that further evaluation or development will be successful, that any Manocept platform product candidate will ultimately achieve
regulatory approval, or if approved, the extent to which it will achieve market acceptance. See Risk Factors.

Discontinued Operations

In March 2017, Navidea completed the Asset Sale to Cardinal Health 414, as discussed previously under “Development of the Business.”
In exchange for the Acquired Assets, Cardinal Health 414 (i) made a cash payment to the Company at closing of approximately $80.6
million after adjustments based on inventory being transferred and an advance of $3.0 million of guaranteed earnout payments as part of
the CRG settlement, (ii) assumed certain liabilities of the Company associated with the Product as specified in the Purchase Agreement,
and (iii) agreed to make periodic earnout payments (to consist of contingent payments and milestone payments which, if paid, will be
treated as additional purchase price) to the Company based on net sales derived from the purchased Product subject, in each case, to
Cardinal Health 414’s right to off-set. In no event will the sum of all earnout payments, as further described in the Purchase Agreement,
exceed $230 million over a period of ten years, of which $20.1 million are guaranteed payments for the three years immediately after
closing of the Asset Sale. At the closing of the Asset Sale, $3.0 million of such earnout payments were advanced by Cardinal Health 414
to the Company, and paid to CRG as part of the Deposit Amount paid to CRG.

We recorded a net gain on the sale of the Business of $89.2 million for the year ended December 31, 2017, including $16.5 million in
guaranteed consideration, which was discounted to the present value of future cash flows. The proceeds were offset by $3.3 million in
estimated fair value of warrants issued to Cardinal Health 414, $2.0 million in legal and other fees related to the sale, $800,000 in net
balance sheet dispositions and write-offs, and $4.1 million in estimated taxes. The guaranteed consideration was recorded as a receivable,
the balance of which is reduced as quarterly payments are received.

Our consolidated balance sheets and statements of operations have been reclassified, as required, for all periods presented to reflect the
Business as a discontinued operation. Cash flows associated with the operation of the Business have been combined with operating,
investing and financing cash flows, as appropriate, in our consolidated statements of cash flows.

Results of Operations

This discussion of our Results of Operations focuses on describing results of our operations as if we had not operated the discontinued
operations discussed above during the periods being disclosed. In addition, since our remaining pharmaceutical product candidates are not
yet generating commercial revenue, the discussion of our revenue focuses on the grant and other revenue and our operating variances
focus on our remaining product development programs and the supporting general and administrative expenses.

Years Ended December 31, 2017 and 2016

Tc99m Tilmanocept License Revenue. During 2017, we recognized license revenue of $100,000 for a non-refundable upfront payment
related to the Tc99m tilmanocept license and distribution agreement with Sayre Therapeutics in India. During 2016, we recognized $1.2
million of the $2.0 million non-refundable upfront payment received by the Company related to the Tc99m tilmanocept license and
distribution agreement for Europe. The Company had been recognizing this revenue on a straight-line basis over two years, however the
remaining deferred revenue of $417,000 was recognized upon obtaining European approval of a reduced-mass vial in September 2016,
five months earlier than originally anticipated. During 2016, we also recognized $500,000 of milestone revenue upon obtaining European
approval of the reduced-mass vial, as well as $127,000 reimbursement of certain clinical development costs, in accordance with the terms
of the Tc99m tilmanocept distribution agreement for Europe.

Grant and Other Revenue. During 2017, we recognized $1.7 million of grant and other revenue as compared to $3.1 million in 2016.
Grant revenue during 2017 was primarily related to SBIR grants from the NIH supporting Manocept, Tc99m tilmanocept and therapeutic
development. Grant revenue during 2016 was primarily related to SBIR grants from the NIH supporting Manocept, Tc99m tilmanocept,
NAV4694 and therapeutic development. Other revenue for 2017 and 2016 included $31,000 and $258,000, respectively, of revenue from
our marketing partners in Europe and China related to development work performed at their request. Other revenue for 2016 also included
$33,000 related to services provided to R-NAV for Manocept development.

Research and Development Expenses. Research and development expenses decreased $2.6 million, or 37%, to $4.5 million during 2017
from $7.1 million during 2016. The decrease was primarily due to net decreases in drug project expenses related to (i) decreased NAV4694
development costs of $2.0 million including decreased manufacturing-related activities, clinical trial costs and licensing costs, while we
continued our efforts to divest the program; (ii) decreased Tc99m tilmanocept development costs of $1.4million including decreased
manufacturing-related activities, regulatory costs, clinical trial costs and licensing costs; and (iii) decreased NAV5001 development costs
of $189,000 including decreased clinical trial costs and manufacturing-related activities; offset by (iv) increased Manocept platform
development costs of $1.4 million including increased clinical trial costs and licensing costs. The net decrease in research and development
expenses also included decreased compensation including incentive-based awards and other expenses related to net decreased headcount of
$467,000.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $3.3 million, or 41%, to $11.2
million during 2017 from $7.9 million during 2016. The net increase was primarily due to increased compensation costs of $1.3 million
including incentive-based awards and termination costs related to the arbitration award to Mr. Gonzalez, increased legal and professional
services of $1.0 million, a loss on disposal of assets primarily related to our previous office space of $996,000 and a loss on termination of
our previous office lease of $399,000.

Other Income (Expense). Other expense, net, was $3.9 million during 2017 compared to other income, net of $2.8 million during 2016.
We recorded a loss on extinguishment of the CRG debt of $4.2 million during 2017. Also during 2017, we recognized interest income of
$328,000 primarily related to the guaranteed consideration due from Cardinal Health 414, which was discounted to present value at the
closing date of the Asset Sale. During 2017, $265,000 of interest expense was compounded and added to the balance of our note payable
to Platinum. During 2017 and 2016, we recorded non-cash income of $153,000 and $2.9 million, respectively, related to changes in the
estimated fair value of financial instruments. During 2016, we recorded a non-cash loss on the disposal of our investment in R-NAV, LLC
(“R-NAV”) of $40,000.

Gain on Discontinued Operations. We recorded a net gain on the sale of the Business to Cardinal Health 414 of $89.2 million in 2017,
including $16.5 million in guaranteed consideration, which was discounted to the present value of future cash flows. The proceeds were
offset by $3.3 million in estimated fair value of warrants issued to Cardinal Health 414, $2.0 million in legal and other fees related to the
sale, $800,000 in net balance sheet dispositions and write-offs, and $4.1 million in estimated taxes. Operating losses from discontinued
operations related to the sale of the Business to Cardinal Health 414 were $491,000 and $6.9 million for 2017 and 2016, respectively.

Years Ended December 31, 2016 and 2015

Tc99m Tilmanocept License Revenue. During 2016 and 2015, we recognized $1.2 million and $833,000, respectively, of the $2.0 million
non-refundable upfront payment received by the Company related to the Tc99m tilmanocept license and distribution agreement for
Europe. The Company had been recognizing this revenue on a straight-line basis over two years, however the remaining deferred revenue
of $417,000 was recognized upon obtaining European approval of a reduced-mass vial in September 2016, five months earlier than
originally anticipated. During 2016, we also recognized $500,000 of milestone revenue upon obtaining European approval of the reduced-
mass vial, as well as $127,000 reimbursement of certain clinical development costs, in accordance with the terms of the Tc99m
tilmanocept distribution agreement for Europe. During 2015, we recognized $300,000 of Tc99m tilmanocept license revenue from a non-
refundable milestone payment received by the Company related to the Tc99m tilmanocept distribution agreement for China, for which the
Company has no future obligations.

Grant and Other Revenue. During 2016, we recognized $3.1 million of grant and other revenue as compared to $1.9 million in 2015.
Grant revenue during 2016 was primarily related to SBIR grants from the NIH supporting Manocept, Tc99m tilmanocept, NAV4694 and
therapeutic development. Grant revenue during 2015 was primarily related to SBIR grants from the NIH supporting NAV4694, Tc99m
tilmanocept and Manocept development. Grant and other revenue during 2016 included $173,000 from sales of non-commercial product to
our European distribution partner. Grant and other revenue for 2016 and 2015 also included $33,000 and $140,000, respectively, related to
services provided to R-NAV for Manocept development.

Research and Development Expenses. Research and development expenses decreased $3.4 million, or 32%, to $7.1 million during 2016
from $10.5 million during 2015. The decrease was primarily due to net decreases in drug project expenses related to (i) decreased
NAV4694 development costs of $1.9 million including decreased clinical trial costs and manufacturing-related activities offset by
increased licensing costs, while we continued our efforts to divest the program; (ii) decreased Tc99m tilmanocept development costs of
$364,000 including decreased manufacturing-related activities and pre-clinical testing, offset by increased licensing, clinical trial and
regulatory costs; and (iii) decreased NAV5001 development costs of $288,000 including decreased manufacturing-related activities and
clinical trial costs; offset by (iv) increased Manocept platform development costs of $278,000 including increased clinical trial costs offset
by decreased preclinical testing, license fees and manufacturing-related activities; and (v) increased therapeutics development costs of
$141,000 including increased consulting costs offset by decreased scientific advisory board fees and manufacturing-related activities. The
net decrease in research and development expenses also included decreased compensation including incentive-based awards and other
expenses related to net decreased headcount of $1.3 million following the first quarter 2015 reduction in force.

Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased $3.0 million, or 27%, to $7.9
million during 2016 from $10.9 million during 2015. The net decrease was primarily due to decreased general and administrative
headcount of $2.2 million following the first quarter 2015 reduction in force coupled with decreased travel, office and other support costs
of $795,000, consulting services of $671,000, and investor relations of $212,000, offset by increased legal and professional services of
$879,000.

Other Income (Expense). Other income, net, was $2.8 million during 2016 as compared to other expense, net of $4.6 million during 2015.
Interest expense, net decreased $1.3 million to $5,000 during 2016 from $1.3 million for 2015, primarily due to outstanding balance of the
Oxford Notes in 2015. Of this interest expense, $326,000 in 2015 was non-cash in nature related to the amortization of debt issuance costs
and debt discounts related to the Oxford Notes. For 2016 and 2015, we recorded non-cash income (expense) of $2.9 million and
($615,000), respectively, related to changes in the estimated fair value of financial instruments. During 2016 and 2015, we recorded non-
cash equity in the loss of R-NAV of $15,000 and $305,000, respectively. During 2016, we also recorded a non-cash loss on the disposal of
our investment in R-NAV of $40,000. During 2015, we recorded $2.4 million of losses on the extinguishment of the Oxford Notes.

Loss from Discontinued Operations. Loss from discontinued operations was $6.9 million during 2016 as compared to $4.5 million in 2015.
Loss from discontinued operations included operating losses related to the sale of the Business to Cardinal Health 414 of $6.9 million and
$5.7 million for 2016 and 2015, respectively. During 2015, we also recorded net income from the sale of the GDS Business to Devicor of
$759,000 related to royalty amounts earned based on 2015 GDS Business revenue. The royalty amount of $1.2 million was offset by
$436,000 in estimated taxes which were allocated to discontinued operations, but were fully offset by the tax benefit from our net operating
loss for 2015.

Liquidity and Capital Resources

Cash balances increased to $2.8 million at December 31, 2017 from $1.5 million at December 31, 2016. The net increase was primarily
due to net cash received for the Asset Sale to Cardinal Health 414, offset by payments made on the CRG and Platinum debts and
investments in available-for-sale securities coupled with cash used to fund our operations.

All of our material assets were pledged as collateral for our borrowings under the CRG Loan Agreement. In addition to the security
interest in our assets, the CRG Loan Agreement carried covenants that imposed significant requirements on us. An event of default
entitled CRG to accelerate the maturity of our indebtedness, increase the interest rate from 14% to the default rate of 18% per annum, and
invoke other remedies available to it under the loan agreement and the related security agreement.

As previously described, on March 3, 2017, the Company entered into a Global Settlement Agreement with MT, CRG, and Cardinal
Health 414 to effectuate the terms of a settlement previously entered into by the parties on February 22, 2017. In accordance with the
Global Settlement Agreement, on March 3, 2017, the Company repaid $59 million of its alleged indebtedness and other obligations
outstanding under the CRG Term Loan. Concurrently with payment of the Deposit Amount, CRG released all liens and security interests
granted under the CRG Loan Documents and the CRG Loan Documents were terminated and are of no further force or effect; provided,
however, that, notwithstanding the foregoing, the Company and CRG agreed to continue with their proceeding pending in The District
Court of Harris County, Texas to fully and finally determine the Final Payoff Amount.

In connection with the closing of the Asset Sale to Cardinal Health 414, the Company repaid to Platinum Partners Capital Opportunity
Fund L.P. (“PPCO”) an aggregate of approximately $7.7 million in partial satisfaction of the Company’s liabilities, obligations and
indebtedness under the Platinum Loan Agreement between the Company and Platinum-Montaur, which were transferred by Platinum-
Montaur to PPCO. The Company was informed by Platinum Partners Value Arbitrage Fund L.P. (“PPVA”) that it was the owner of
additional amounts owed on the Platinum-Montaur loan. PPVA claims a balance of approximately $1.9 million was due upon closing of
the Asset Sale. That amount is also subject to competing claims of ownership by Dr. Michael Goldberg, the Company’s President and
Chief Executive Officer. The Company has not yet paid the balance to anyone, as ownership is subject to dispute.

On March 2, 2017, PPCO provided a payoff letter (the “Payoff Letter”). In the Payoff Letter, PPCO defined “Indebtedness” to include all
amounts due under the Platinum Note, indicated that upon payment of the Payoff Amount, all “Indebtedness owed to Lender” shall have
been satisfied in full, and that the “Loan Documents,” which included the Platinum Loan Agreement and the Platinum Note, “shall
terminate and have no further force or effect.” The letter also confirmed that as of the date that payment was made by Navidea, the
Receiver was providing a release and indemnification in favor of Navidea based on any claims made by any affiliate of PPCO. The Payoff
Amount was paid pursuant to the Payoff Letter.

The remaining balance of the Platinum Note would have matured under its terms in September 2017, however the Company has not paid
the balance as it is still subject to ongoing competing claims of ownership. The Company intends to pay the balance of the debt if it is
determined to be due and owing to PPVA or Dr. Goldberg.

On November 2, 2017, Platinum-Montaur commenced an action against the Company in the Supreme Court of the State of New York,
County of New York, seeking damages in the amount of $1,914,827.22 purportedly due as of March 3, 2017, plus interest accruing
thereafter. The claims asserted are for breach of contract and unjust enrichment in connection with funds received by the Company under
the Platinum Loan Agreement. Said action was removed to the United States District of New York on December 6, 2017. An initial
pretrial conference was held on January 26, 2018. At the conference the Court stayed the deadline for the Company to answer or
otherwise respond to the complaint. The Court also directed the parties to engage in informal jurisdictional discovery and a follow up
status conference was held on March 9, 2018, during which the Court set a briefing schedule and determined that Navidea’s motion to
dismiss is due on April 6, 2018. The Court also referred the case to a settlement conference, which has been scheduled for April 30, 2018.
Because the funds sought by Platinum-Montaur are subject to claims of competing ownership, the Company intends to defend itself in the
action and seek a determination as to whether any funds are due and owing to the plaintiff.

As of December 31, 2017, the outstanding principal balance of the Platinum Note was approximately $2.0 million.

Following the completion of the Asset Sale to Cardinal Health 414 and the repayment of a majority of our indebtedness, we believe that
substantial doubt about the Company’s financial position and ability to continue as a going concern was alleviated. Based on our current
working capital and our projected cash burn, including our belief that the Company will be obligated to pay up to an additional $2.9
million to CRG, management believes that the Company will be able to continue as a going concern for at least twelve months following
the issuance of this Annual Report on Form 10-K. Our projected cash burn also factors in certain cost cutting initiatives that have been
implemented and approved by the board of directors, including reductions in the workforce and a reduction in facilities expenses.
Additionally, we have considerable discretion over the extent of development project expenditures and have the ability to curtail the
related cash flows as needed. The Company also has funds remaining under outstanding grant awards, and continues working to establish
new sources of non-dilutive funding, including collaborations and additional grant funding that can augment the balance sheet as the
Company works to reduce spending to levels that can be supported by our revenues. We believe all of these factors are sufficient to
alleviate substantial doubt about the Company’s ability to continue as a going concern.

Operating Activities. Cash provided by operations was $59.1 million during 2017 compared to $3.6 million provided during 2016.

In connection with the Asset Sale , Cardinal Health 414 (i) made a cash payment to the Company at closing of approximately $80.6 million
after adjustments based on inventory being transferred and an advance of $3 million of guaranteed earnout payments as part of the CRG
settlement, (ii) assumed certain liabilities of the Company associated with the Product as specified in the Purchase Agreement, and (iii)
agreed to make periodic earnout payments (to consist of contingent payments and milestone payments which, if paid, will be treated as
additional purchase price) to the Company based on net sales derived from the purchased Product subject, in each case, to Cardinal Health
414’s right to offset. In no event will the sum of all earnout payments, as further described in the Purchase Agreement, exceed $230
million over a period of ten years, of which $20.1 million are guaranteed payments for the three years immediately after closing of the
Asset Sale. At the closing of the Asset Sale, $3 million of such earnout payments were advanced by Cardinal Health 414 to the Company,
and paid to CRG as part of the Deposit Amount paid to CRG.

We recorded a net gain on the sale of the Business of $89.2 million for the year ended December 31, 2017, including $16.5 in guaranteed
consideration, which was discounted to the present value of future cash flows. The proceeds were offset by $3.3 million in estimated fair
value of warrants issued to Cardinal Health 414, $2.0 million in legal and other fees related to the sale, $800,000 in net balance sheet
dispositions and write-offs, and $4.1 million in estimated taxes.

Accounts and other receivables increased to $8.1 million at December 31, 2017 from $203,000 at December 31, 2016, primarily related to
the current portion of the guaranteed earnout due from Cardinal Health 414, which was discounted and recorded at present value. The
change in accounts and other receivables also reflects a decrease in receivables from our European distribution partner.

Inventory levels decreased to $0 at December 31, 2017 from $96,000 at December 31, 2016, primarily due to the use of materials for
European manufacturing development and production. We expect inventory levels to remain minimal during 2018 as European
manufacturing has been transitioned to our distribution partner and sales in India, China and other international markets are not expected
to be significant.

Prepaid expenses and other current assets increased to $1.1 million at December 31, 2017 from $842,000 at December 31, 2016, primarily
due to increased taxes receivable, prepaid insurance, investor relations and other services coupled with increased interest receivable related
to the guaranteed earnout due from Cardinal Health 414, offset by decreased legal retainers and amortization of prepaid services.

Accounts payable decreased to $855,000 at December 31, 2017 from $5.2 million at December 31, 2016, primarily driven by net
decreased payables due for NAV4694, legal and professional services, Tc99m tilmanocept European manufacturing, regulatory and
operations vendors. Accrued liabilities and other current liabilities decreased to $1.9 million at December 31, 2017 from $7.9 million at
December 31, 2016, primarily driven by decreased accruals for interest, NAV4694, therapeutic development and general operations costs,
offset by increased accruals for Manocept development costs. Our payable and accrual balances will continue to fluctuate but will likely
decrease overall as we resolve legal disputes and continue to decrease our level of development activity related to NAV4694, offset by
planned increases in development activity related to the Manocept platform.

Assets associated with discontinued operations decreased to $0 at December 31, 2017 from $3.2 million at December 31, 2016, and
liabilities associated with discontinued operations decreased to $7,000 at December 31, 2017 from $4.9 million at December 31, 2016.
Decreases in both assets and liabilities associated with discontinued operations were primarily due to the Asset Sale to Cardinal Health 414
in March 2017.

Investing Activities. Investing activities used $1.8 million during 2017 compared to using $39,000 in 2016. Investing activities during 2017
included purchases of available-for-sale securities of $2.2 million and capital expenditures of $34,000, primarily for computer equipment
and leasehold improvements, offset by maturities of available-for-sale securities of $400,000. Investing activities during 2016 included net
payments related to the disposal of our investment in R-NAV of $82,000 and capital expenditures of $2,000, primarily for computer
equipment, offset by proceeds from sales of capital equipment of $45,000. We expect our overall capital expenditures for 2018 will be
somewhat less than 2017 as we maintain our technology infrastructure.

Financing Activities. Financing activities used $56.0 million during 2017 compared to using $9.1 million in 2016. The $56.0 million used
by financing activities in 2017 consisted primarily of principal payments on the CRG, Platinum and IPFS notes payable of $59.8 million,
offset by the release of restricted cash of $5.0 million and proceeds from issuance of common stock of $72,000. The $9.1 million used by
financing activities in 2016 consisted primarily of restrictions placed on cash in an account controlled by CRG of $5.0 million, payment of
debt-related costs of $3.9 million, and principal payments on notes payable of $231,000, primarily related to the CRG debt.

Investment in Macrophage Therapeutics, Inc.

In March 2015, MT, our previously wholly-owned subsidiary, entered into a Securities Purchase Agreement to sell up to 50 shares of its
Series A Convertible Preferred Stock (“MT Preferred Stock”) and warrants to purchase up to 1,500 common shares of MT (“MT Common
Stock”) to Platinum and Dr. Michael Goldberg (collectively, the “MT Investors”) for a purchase price of $50,000 per unit. A unit consists
of one share of MT Preferred Stock and 30 warrants to purchase MT Common Stock. Under the agreement, 40% of the MT Preferred
Stock and warrants are committed to be purchased by Dr. Goldberg, and the balance by Platinum. The full 50 shares of MT Preferred
Stock and warrants that may be sold under the agreement are convertible into, and exercisable for, MT Common Stock representing an
aggregate 1% interest on a fully converted and exercised basis. Navidea owns the remainder of the MT Common Stock. On March 11,
2015, definitive agreements with the MT Investors were signed for the sale of the first tranche of 10 shares of MT Preferred Stock and
warrants to purchase 300 shares of MT Common Stock to the MT Investors, with gross proceeds to MT of $500,000.

In addition, we entered into a Securities Exchange Agreement with the MT Investors providing them an option to exchange their MT
Preferred Stock for our common stock in the event that MT has not completed a public offering with gross proceeds to MT of at least $50
million by the second anniversary of the closing of the initial sale of MT Preferred Stock, at an exchange rate per share obtained by
dividing $50,000 by the greater of (i) 80% of the twenty-day volume weighted average price per share of our common stock on the second
anniversary of the initial closing or (ii) $3.00. To the extent that the MT Investors do not timely exercise their exchange right, MT has the
right to redeem their MT Preferred Stock for a price equal to $58,320 per share. We also granted MT an exclusive license for certain
therapeutic applications of the Manocept technology.

In December 2015 and May 2016, Platinum contributed an additional $200,000 to MT. MT was not obligated to provide anything in
return, although it was considered likely that the MT Board would ultimately authorize some form of compensation to Platinum. During
the year ended December 31, 2016, the Company recorded the entire $200,000 as a current liability pending determination of the form of
compensation.

In July 2016, MT’s Board of Directors authorized modification of the original investments of $300,000 by Platinum and $200,000 by Dr.
Goldberg to a convertible preferred stock with a 10% PIK coupon retroactive to the time the initial investments were made. The conversion
price of the preferred will remain at the $500 million initial market cap but a full ratchet will be added to enable the adjustment of
conversion price, warrant number and exercise price based on the valuation of the first institutional investment round. In addition, the MT
Board authorized issuance of additional convertible preferred stock with the same terms to Platinum as compensation for the additional
$200,000 of investments made in December 2015 and May 2016. Based on the MT Board’s authorization of additional equity, the
Company reclassified the additional $200,000 from a current liability to equity during the year ended December 31, 2017. As of the date
of filing of this Form 10-K, final documents related to the above transactions authorized by the MT Board have not been completed.

Capital Royalty Partners II, L.P. Debt

Prior to the Asset Sale to Cardinal Health 414 in March 2017, all of our material assets were pledged as collateral for our borrowings under
the Term Loan Agreement (the “CRG Loan Agreement”) with CRG. In addition to the security interest in our assets, the CRG Loan
Agreement included covenants that imposed significant requirements on us. An event of default would have entitled CRG to accelerate the
maturity of our indebtedness, increase the interest rate from 14% to the default rate of 18% per annum, and invoke other remedies
available to it under the loan agreement and the related security agreement. During the course of 2016, CRG alleged multiple claims of
default on the CRG Loan Agreement, and filed suit in the District Court of Harris County, Texas. On June 22, 2016, CRG exercised
control over one of the Company’s primary bank accounts and took possession of $4.1 million that was on deposit. Multiple motions,
actions and hearings followed over the remainder of 2016 and into 2017.

On March 3, 2017, the Company entered into a Global Settlement Agreement with MT, CRG, and Cardinal Health 414 to effectuate the
terms of a settlement previously entered into by the parties on February 22, 2017. In accordance with the Global Settlement Agreement, on
March 3, 2017, the Company repaid the $59 million Deposit Amount of its alleged indebtedness and other obligations outstanding under
the CRG Term Loan. Concurrently with payment of the Deposit Amount, CRG released all liens and security interests granted under the
CRG Loan Documents and the CRG Loan Documents were terminated and are of no further force or effect; provided, however, that,
notwithstanding the foregoing, the Company and CRG agreed to continue with their proceeding pending in The District Court of Harris
County, Texas to fully and finally determine the Final Payoff Amount. The Company and CRG further agreed that the Final Payoff
Amount would be no less than $47 million and no more than $66 million. In addition, concurrently with the payment of the Deposit
Amount and closing of the Asset Sale, (i) Cardinal Health 414 agreed to post a $7 million letter of credit in favor of CRG (at the
Company’s cost and expense to be deducted from the closing proceeds due to the Company, and subject to Cardinal Health 414’s
indemnification rights under the Purchase Agreement) as security for the amount by which the High Payoff Amount exceeds the Deposit
Amount in the event the Company is unable to pay all or a portion of such amount, and (ii) CRG agreed to post a $12 million letter of
credit in favor of the Company as security for the amount by which the Deposit Amount exceeds the Low Payoff Amount. If, on the one
hand, it is finally determined by the Texas Court that the amount the Company owes to CRG under the Loan Documents exceeds the
Deposit Amount, the Company will pay such excess amount, plus the costs incurred by CRG in obtaining CRG’s letter of credit, to CRG
and if, on the other hand, it is finally determined by the Texas Court that the amount the Company owes to CRG under the Loan
Documents is less than the Deposit Amount, CRG will pay such difference to the Company and reimburse Cardinal Health 414 for the
costs incurred by Cardinal Health 414 in obtaining its letter of credit. Any payments owing to CRG arising from a final determination that
the Final Payoff Amount is in excess of $59 million shall first be paid by the Company without resort to the letter of credit posted by
Cardinal Health 414, and such letter of credit shall only be a secondary resource in the event of failure of the Company to make payment to
CRG. The Company will indemnify Cardinal Health 414 for any costs it incurs in payment to CRG under the settlement, and the Company
and Cardinal Health 414 further agree that Cardinal Health 414 can pursue all possible remedies, including offset against earnout payments
(guaranteed or otherwise) under the Purchase Agreement, warrant exercise, or any other payments owed by Cardinal Health 414, or any of
its affiliates, to the Company, or any of its affiliates, if Cardinal Health 414 incurs any cost associated with payment to CRG under the
settlement. The $2 million being held in escrow pursuant to court order in the Ohio case and the $3 million being held in escrow pursuant
to court order in the Texas case were released to the Company at closing of the Asset Sale. On March 3, 2017, Cardinal Health 414 posted
a $7 million letter of credit, and on March 7, 2017, CRG posted a $12 million letter of credit, each as required by the Global Settlement
Agreement.

Platinum Credit Facility

The Platinum Loan Agreement, as amended, provided us with a credit facility of up to $50 million. We drew a total of $4.5 million under
the credit facility during the year ended December 31, 2015. We did not make any draws under the credit facility during the years ended
December 31, 2016 and 2014. The credit facility bore interest at the greater of (a) the U.S. Prime Rate as reported in the Wall Street
Journal plus 6.75%; (b) 10.0%; or (c) the highest rate of interest then payable pursuant to the CRG Term Loan plus 0.125%, compounded
monthly. In accordance with the terms of a Section 16(b) Settlement Agreement, Platinum agreed to forgive interest owed on the credit
facility in an amount equal to 6%, effective July 1, 2016. As of December 31, 2017, the effective interest rate was 8.125%. Platinum had
the right, at Platinum’s option subject to certain conditions, to convert all principal and interest outstanding under the Platinum Loan
Agreement (the “Conversion Amount”) into shares of the Company’s common stock, but not until such time as the average daily volume
weighted average price of the Company’s common stock for the ten preceding trading days exceeded $2.53 per share. Following the
maturity of the Platinum Loan Agreement in September 2017, Platinum no longer has any rights to convert.

In connection with the closing of the Asset Sale to Cardinal Health 414, the Company repaid to PPCO an aggregate of approximately $7.7
million in partial satisfaction of the Company’s liabilities, obligations and indebtedness under the Platinum Loan Agreement between the
Company and Platinum-Montaur, which were transferred by Platinum-Montaur to PPCO. The Company was informed by PPVA that it
was the owner of additional amounts owed on the Platinum-Montaur loan. PPVA claims a balance of approximately $1.9 million was due
upon closing of the Asset Sale. That amount is also subject to competing claims of ownership by Dr. Michael Goldberg, the Company’s
President and Chief Executive Officer. The Company has not yet paid the balance to anyone, as ownership is subject to dispute.

During the years ended December 31, 2017, 2016 and 2015, $265,000, $1.0 million and $761,000 of interest was compounded and added
to the balance of the Platinum Note, respectively. As of December 31, 2017, the remaining outstanding principal balance of the Platinum
Note was approximately $2.0 million.

Cardinal Health 414 Asset Sale

On March 3, 2017, pursuant to a Purchase Agreement dated November 23, 2016, the Company completed its previously announced sale to
Cardinal Health 414 of its assets used, held for use, or intended to be used in operating the Business, including the Product, in the Territory
(giving effect to the License-Back and excluding certain assets specifically retained by the Company). Such assets sold in the Asset Sale
consist primarily of, without limitation, (i) intellectual property used in or reasonably necessary for the conduct of the Business, (ii)
inventory of, and customer, distribution, and product manufacturing agreements related to, the Business, (iii) all product registrations
related to the Product, including the new drug application approved by the FDA for the Product and all regulatory submissions in the
United States that have been made with respect to the Product and all Health Canada regulatory submissions and, in each case, all files and
records related thereto, (iv) all related clinical trials and clinical trial authorizations and all files and records related thereto, and (v) all
right, title and interest in and to the Product, as specified in the Purchase Agreement.

In exchange for the Acquired Assets, Cardinal Health 414 (i) made a cash payment to the Company at closing of approximately $80.6
million after adjustments based on inventory being transferred and an advance of $3 million of guaranteed earnout payments as part of the
CRG settlement (described below in Item 3 – Legal Proceedings), (ii) assumed certain liabilities of the Company associated with the
Product as specified in the Purchase Agreement, and (iii) agreed to make periodic earnout payments (to consist of contingent payments and
milestone payments which, if paid, will be treated as additional purchase price) to the Company based on net sales derived from the
purchased Product subject, in each case, to Cardinal Health 414’s right to off-set. In no event will the sum of all earnout payments, as
further described in the Purchase Agreement, exceed $230 million over a period of ten years, of which $20.1 million are guaranteed
payments for the three years immediately after closing of the Asset Sale. At the closing of the Asset Sale, $3 million of such earnout
payments were advanced by Cardinal Health 414 to the Company, and paid to CRG as part of the Deposit Amount paid to CRG (described
above).

Upon closing of the Asset Sale, the Supply and Distribution Agreement between Cardinal Health 414 and the Company was terminated
and, as a result, the provisions thereof are of no further force or effect. The completion of the Asset Sale significantly improved our
financial condition and our ability to continue as a going concern.

Summary

Our future liquidity and capital requirements will depend on a number of factors, including the final outcome of the CRG litigation which
could potentially result in payment of up to an additional $7 million to CRG, the ability of our distribution partners to achieve market
acceptance of our products, our ability to complete the development and commercialization of new products, our ability to monetize our
investment in non-core technologies, our ability to obtain milestone or development funds from potential development and distribution
partners, regulatory actions by the FDA and international regulatory bodies, the ability to procure required financial resources, and
intellectual property protection.

We plan to focus our resources for 2018 primarily on development of products based on the Manocept platform. Although management
believes that it will be able to achieve these objectives, they are subject to a number of variables beyond our control, including the
outcome of the remaining CRG litigation, the nature and timing of any partnering opportunities, the ability to modify contractual
commitments made in connection with these programs, and the timing and expense associated with suspension or alteration of clinical
trials, and consequently there can be no assurance that we will be able to achieve our objective of bringing our expenses in line with our
revenues, and we may need to seek additional debt or equity financing if we cannot achieve that objective in a timely manner.

We have continued making limited investment in the NAV4694 clinical trial process based on our expectation that we will ultimately be
successful in securing a partnership that will provide us some level of return on this investment which is incremental to the carrying costs
we are presently incurring. However, there can be no assurance that the partnership discussions in which we are engaged will yield the
level of return we are anticipating.

We will continue to evaluate our time lines, strategic needs, and balance sheet requirements. There can be no assurance that if we attempt
to raise additional capital through debt, royalty, equity or otherwise, we will be successful in doing so on terms acceptable to the
Company, or at all. Further, there can be no assurance that we will be able to gain access and/or be able to execute on securing new
sources of funding, new development opportunities, successfully obtain regulatory approval for and commercialize new products, achieve
significant product revenues from our products, or achieve or sustain profitability in the future. See Risk Factors.

Off-Balance Sheet Arrangements

As of December 31, 2017, we had no off-balance sheet arrangements.

Recent Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue
from Contracts with Customers (Topic 606), which supersedes existing revenue recognition guidance under U.S. GAAP. The core
principle of ASU 2014-09 is that a company should recognize revenue when it transfers promised goods or services to customers in an
amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09
defines a five-step process that requires companies to exercise more judgment and make more estimates than under the current guidance.
These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the
transaction price, and allocating the transaction price to each separate performance obligation. Since the issuance of ASU 2014-09, several
additional ASUs have been issued and incorporated within Topic 606 to clarify various elements of the guidance. ASU 2014-09 allows a
choice of transition methods: (a) a full retrospective adoption in which the standard is applied to all of the periods presented, or (b) a
modified retrospective adoption in which the standard is applied only to the most current period presented in the financial statements with
a cumulative-effect adjustment reflected in retained earnings. ASU 2014-09 also requires significantly expanded disclosures regarding the
qualitative and quantitative information of an entity’s nature, amount, timing and uncertainty of revenue and cash flows arising from
contracts with customers. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim
periods within those periods.

In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers – Principal versus Agent Considerations
(Reporting Revenue Gross versus Net). ASU 2016-08 does not change the core principle of the guidance, rather it clarifies the
implementation guidance on principal versus agent considerations. ASU 2016-08 clarifies the guidance in ASU No. 2014-09, Revenue
from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for ASU 2016-08
are the same as for ASU 2014-09, which was deferred by one year by ASU No. 2015-14, Revenue from Contracts with Customers –
Deferral of the Effective Date. Public business entities should adopt the new revenue recognition standard for annual reporting periods
beginning after December 15, 2017, including interim periods within that year. Early adoption is permitted only as of annual reporting
periods beginning after December 15, 2016, including interim periods within that year.

In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers – Identifying Performance Obligations and
Licensing. ASU 2016-10 does not change the core principle of the guidance, rather it clarifies the identification of performance
obligations and the licensing implementation guidance, while retaining the related principles for those areas. ASU 2016-10 clarifies the
guidance in ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and
transition requirements for ASU 2016-10 are the same as for ASU 2014-09, which was deferred by one year by ASU No. 2015-14,
Revenue from Contracts with Customers – Deferral of the Effective Date. Public business entities should adopt the new revenue
recognition standard for annual reporting periods beginning after December 15, 2017, including interim periods within that year. Early
adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that year.

In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers – Narrow-Scope Improvements and Practical
Expedients. ASU 2016-12 does not change the core principle of the guidance, rather it affects only certain narrow aspects of Topic 606,
including assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications
at transition. ASU 2016-12 affects the guidance in ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which is not
yet effective. The effective date and transition requirements for ASU 2016-12 are the same as for ASU 2014-09, which was deferred by
one year by ASU No. 2015-14, Revenue from Contracts with Customers – Deferral of the Effective Date. Public business entities should
adopt the new revenue recognition standard for annual reporting periods beginning after December 15, 2017, including interim periods
within that year. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim
periods within that year.

In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts
with Customers. ASU 2016-20 does not change the core principle of the guidance, rather it affects only certain narrow aspects of Topic
606, including loan guarantee fees, contract cost impairment testing, provisions for losses on construction- and production-type contracts,
clarification of the scope of Topic 606, disclosure of remaining and prior-period performance obligations, contract modification, contract
asset presentation, refund liability, advertising costs, fixed-odds wagering contracts in the casino industry, and cost capitalization for
advisors to private and public funds. ASU 2016-20 affects the guidance in ASU No. 2014-09, Revenue from Contracts with Customers
(Topic 606), which is not yet effective. The effective date and transition requirements for ASU 2016-12 are the same as for ASU 2014-09,
which was deferred by one year by ASU No. 2015-14, Revenue from Contracts with Customers – Deferral of the Effective Date. Public
business entities should adopt the new revenue recognition standard for annual reporting periods beginning after December 15, 2017,
including interim periods within that year. Early adoption is permitted only as of annual reporting periods beginning after December 15,
2016, including interim periods within that year.

Following the sale of the Business to Cardinal Health 414 in March 2017, we generate revenue primarily from grants to support certain of
our product development programs. Such grant revenues are recognized only after expenses reimbursable under the grants have been paid.
We also earn revenues related to our licensing and distribution agreements. The consideration we are eligible to receive under our
licensing and distribution agreements typically includes upfront payments, reimbursement for research and development costs, milestone
payments, and royalties. Each licensing and distribution agreement is unique and will require separate assessment using the five-step
process under ASU 2014-09. We adopted ASU 2014-09 along with additional related ASUs 2016-08, 2016-10, 2016-12 and 2016-20
effective January 1, 2018 using the modified retrospective method of adoption. The Company expects the adoption of ASU 2014-09 and
related ASUs to result in increases in deferred revenue and accumulated deficit of approximately $100,000.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). ASU 2016-02 requires the recognition of lease assets and lease
liabilities by lessees for those leases classified as operating leases under previous GAAP. The core principle of Topic 842 is that a lessee
should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability
to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term.
ASU 2016-02 is effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within
those fiscal years. Early adoption is permitted. We expect the adoption of ASU 2016-02 to result in an increase in right-of-use assets and
lease liabilities on our consolidated statement of financial position related to our leases that are currently classified as operating leases,
primarily for office space. Management is currently evaluating the impact that the adoption of ASU 2016-02 will have on our
consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash
Payments. ASU 2016-15 addresses certain specific cash flow issues with the objective of reducing the existing diversity in practice in how
certain cash receipts and cash payments are presented and classified in the statement cash flows. ASU 2016-15 is effective for public
business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is
permitted in any interim or annual period. If an entity early adopts ASU 2016-15 in an interim period, any adjustments should be reflected
as of the beginning of the fiscal year that includes that interim period. ASU 2016-15 should be applied using a retrospective transition
method to each period presented, with certain exceptions. We adopted ASU 2016-15 upon issuance, which resulted in debt prepayment
costs being classified as financing costs rather than operating costs on the statement of cash flows.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows – Restricted Cash. ASU 2016-18 requires that the
statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash or equivalents.
Therefore, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the
beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for public business
entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption in permitted,
including adoption in an interim period. If an entity early adopts ASU 2016-18 in an interim period, any adjustments should be reflected as
of the beginning of the fiscal year that includes the interim period. We adopted ASU 2016-18 effective January 1, 2018. The Company
expects the adoption of ASU 2016-18 to result in reclassification of $5.0 million of restricted cash in the consolidated statement of cash
flows for the years ended December 31, 2017 and 2016.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business. ASU
2017-01 provides a screen to determine when a set of assets and activities (collectively, a “set”) is not a business. The screen requires that
when substantially all of the fair market value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a
group of similar identifiable assets, the set is not a business. If the screen is not met, ASU 2017-01 (1) requires that to be considered a
business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create
output, and (2) removes the evaluation of whether a market participant could replace missing elements. ASU 2017-01 is effective for
public business entities for annual periods beginning after December 15, 2017, including interim periods within those periods. ASU 2017-
01 should be applied prospectively on or after the effective date. No disclosures are required at transition. Early adoption is permitted for
certain transactions as described in ASU 2017-01. The adoption of ASU 2017-01 effective January 1, 2018 did not have a material effect
on our consolidated financial statements.

In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting.
ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply
modification accounting. An entity should account for the effects of a modification unless all of the following criteria are met: (1) The fair
value of the modified award is the same as the fair value of the original award immediately before the original award is modified. If the
modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to
estimate the value immediately before and after the modification. (2) The vesting conditions of the modified award are the same as the
vesting conditions of the original award immediately before the original award is modified. (3) The classification of the modified award as
an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is
modified. Disclosure requirements remain unchanged. ASU 2017-09 is effective for all entities for annual periods, and interim periods
within those annual periods, beginning after December 15, 2017. Early adoption is permitted as described in ASU 2017-09. The adoption
of ASU 2017-09 effective January 1, 2018 did not have a material effect on our consolidated financial statements.

In September 2017, the FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers
(Topic 606), Leases (Topic 840), and Leases (Topic 842). ASU 2017-13 adds SEC paragraphs pursuant to an SEC Staff Announcement
made in July 2017 and clarifies several issues related to transition and implementation of the covered topics, including clarification of the
definition of a public business entity, the effect of a change in tax law or rates on leveraged leases, and related amendments to the
eXtensible Business Reporting Language (“XBRL”) taxonomy. Management is currently evaluating the impact that the adoption of ASU
2017-13 will have on our consolidated financial statements.

Critical Accounting Policies

Revenue Recognition. We currently generate revenue primarily from grants to support various product development initiatives. We
generally recognize grant revenue when expenses reimbursable under the grants have been paid and payments under the grants become
contractually due.

We earn additional revenues related to our licensing and distribution agreements. The terms of these agreements may include payment to
us of non-refundable upfront license fees, funding or reimbursement of research and development efforts, milestone payments if specified
objectives are achieved, and/or royalties on product sales. We evaluate all deliverables within an arrangement to determine whether or not
they provide value on a stand-alone basis. We recognize a contingent milestone payment as revenue in its entirety upon our achievement
of a substantive milestone if the consideration earned from the achievement of the milestone (i) is consistent with performance required to
achieve the milestone or the increase in value to the delivered item, (ii) relates solely to past performance and (iii) is reasonable relative to
all of the other deliverables and payments within the arrangement.

Research and Development. R&D expenses include both internal R&D activities and external contracted services. Internal R&D activity
expenses include salaries, benefits, and stock-based compensation, as well as travel, supplies, and other costs to support our R&D staff.
External contracted services include clinical trial activities, chemistry, manufacturing and control-related activities, and regulatory costs.
R&D expenses are charged to operations as incurred. We review and accrue R&D expenses based on services performed and rely upon
estimates of those costs applicable to the stage of completion of each project.

Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. We base these estimates and
assumptions upon historical experience and existing, known circumstances. Actual results could differ from those estimates. Specifically,
management may make significant estimates in the following areas:

●

Stock-Based Compensation. Stock-based payments to employees and directors, including grants of stock options and restricted
stock, are recognized in the statements of operations based on their estimated fair values on the date of grant, subject to an
estimated forfeiture rate. The fair value of each option award with time-based vesting provisions is estimated on the date of
grant using the Black-Scholes option pricing model to value such stock-based payments and the portion that is ultimately
expected to vest is recognized as compensation expense over either (1) the requisite service period or (2) the estimated
performance period. The determination of fair value using the Black-Scholes option pricing model is affected by our stock
price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility,
risk-free interest rate, expected dividends and projected employee stock option behaviors. The fair value of each option award
with market-based vesting provisions is estimated on the date of grant using a Monte Carlo simulation to value such stock-
based payments and the portion that is ultimately expected to vest is recognized as compensation expense over either (1) the
requisite service period or (2) the estimated performance period. The determination of fair value using a Monte Carlo
simulation is affected by our stock price as well as assumptions regarding a number of complex and subjective variables,
including expected stock price volatility, risk-free interest rate, expected dividends and projected employee stock option
behaviors.

We estimate the expected term based on the contractual term of the awards and employees' exercise and expected post-vesting
termination behavior. Restricted stock awards are valued based on the closing stock price on the date of grant and amortized
ratably over the estimated life of the award.

Since stock-based compensation is recognized only for those awards that are ultimately expected to vest, we have applied an
estimated forfeiture rate to unvested awards for the purpose of calculating compensation cost. These estimates will be revised, if
necessary, in future periods if actual forfeitures differ from estimates. Changes in forfeiture estimates impact compensation cost
in the period in which the change in estimate occurs.

Fair Value of Financial Instruments. Certain of our notes payable included an embedded conversion option which was
required to be recorded at fair value. The estimated fair value of the embedded conversion option was calculated using a
probability-weighted Monte Carlo simulation. This valuation method includes Level 3 inputs such as the estimated current
market interest rate for similar instruments with similar creditworthiness. Unrealized gains and losses on the fair value of the
embedded conversion option are classified in other expenses as a change in the fair value of financial instruments in the
consolidated statements of operations.

Fair Value of Warrants. We estimate the fair value of warrants using the Black-Scholes model, which is affected by our stock
price and warrant exercise price, as well as assumptions regarding a number of complex and subjective variables, including
expected stock price volatility and risk-free interest rate.

Valuation of Accrued Loss Contingency. Navidea’s management believes it is probable that the Company will be required to
pay the $2.9 million modified judgment requested in January 2018, and as such we accrued a loss contingency for that amount
as a current liability on the December 31, 2017 consolidated balance sheet. The loss contingency of $2.9 million was recorded
as an additional loss on extinguishment of the CRG Term Loan on the consolidated statement of operations for the year ended
December 31, 2017.

Contractual Obligations and Commercial Commitments

The following table presents our contractual obligations and commercial commitments as of December 31, 2017.

Contractual Cash Obligations
Operating lease obligation
Principal and interest on short-term debt
Principal and interest on long-term debt
Total contractual cash obligations

Total

2018

Payments Due By Period
2020

2021

2019

2022

323,002

$ 1,527,784 $ 328,117 $ 326,533 $ 315,594 $ 304,201 $ 253,339 $
—
323,002
2,035,428 2,035,428
—
$ 3,886,214 $2,686,547 $ 326,533 $ 315,594 $ 304,201 $ 253,339 $

—
—

Thereafter
—
—
—
—

This table does not include obligations such as license agreements, contracted services, or employment agreements as such
obligations are dependent upon performance conditions.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk. As of December 31, 2017, our $2.8 million in cash was primarily invested in interest-bearing money market accounts.
Due to the low interest rates being realized on these accounts, we believe that a hypothetical 10% increase or decrease in market interest
rates would not have a material impact on our consolidated financial position, results of operations or cash flows.

We also have exposure to changes in interest rates on our variable-rate debt obligations. As of December 31, 2017, the interest rate on
certain of our debt obligations was the greater of: (a) the U.S. prime rate as reported in The Wall Street Journal plus 6.75%, and (b) 10.0%;
both of the above rates reduced by 600 basis points (effective interest rate as of December 31, 2017 was 8.125%). Based on the amount of
our variable-rate borrowings at December 31, 2017, which totaled approximately $2.0 million, an immediate one percentage point increase
(decrease) in the U.S. prime rate would increase (decrease) our annual interest expense by approximately $20,000. This estimate assumes
that the amount of variable rate borrowings remains constant for an annual period and that the interest rate change occurs at the beginning
of the period.

Foreign Currency Exchange Rate Risk. We do not currently have material foreign currency exposure related to our assets as the majority
are denominated in U.S. currency and our foreign-currency based transaction exchange risk is not material. For the years ended December
31, 2017, 2016 and 2015, we recorded foreign currency transaction (losses) gains of approximately $(27,000), $(12,000) and $41,000,
respectively.

Equity Price Risk. We do not use derivative instruments for hedging of market risks or for trading or speculative purposes. Derivative
instruments embedded in contracts, to the extent not already a free-standing contract, are bifurcated and accounted for separately. All
derivatives are recorded on the consolidated balance sheet at fair value in accordance with current accounting guidelines for such complex
financial instruments. The fair value of our warrant liabilities is determined using various inputs and assumptions, several of which are
based on a survey of peer group companies since the warrants are exercisable for common stock of a non-public subsidiary company. As
of December 31, 2017, we had approximately $63,000 of derivative liabilities recorded on our balance sheet related to outstanding MT
warrants. Due to the relatively low valuation of the MT warrants, a hypothetical 50% change in our stock price would not have a material
effect on the consolidated financial statements.

Item 8. Financial Statements and Supplementary Data

Our consolidated financial statements, and the related notes, together with the report of Marcum LLP dated March 15, 2018 and the report
of BDO USA, LLP dated March 23, 2016, are set forth at pages F-1 through F-41 attached hereto and incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the
Exchange Act is recorded, processed, summarized, and reported within the specified time periods. As a part of these controls, our
management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in
Rule 13a-15(f) under the Exchange Act.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Operating Officer
and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as
defined in Rule 13a-15(e) under the Exchange Act) as of December 31, 2017, and concluded that our disclosure controls and procedures
were effective as of the end of the period covered by this report to ensure that information required to be disclosed by us in the reports that
we file or submit is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management,
including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our Chief Executive Officer and Chief Operating Officer and Chief Financial Officer, understands that our
disclosure controls and procedures do not guarantee that all errors and all improper conduct will be prevented. A control system, no matter
how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
Further, a design of a control system must reflect the fact that there are resource constraints, and the benefit of controls must be considered
relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance
that all control issues and instances of improper conduct, if any, have been detected. These inherent limitations include the realities that
judgments and decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls
can be circumvented by the individual acts of some persons, by collusion of two or more persons, or by management override of the
control. Further, the design of any system of controls is also based in part upon assumptions about the likelihood of future events, and
there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time,
controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations of a cost-effective control system, misstatements due to error or fraud may occur and may
not be detected.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control
system was designed to provide reasonable assurance to management and the Board of Directors regarding the preparation and fair
presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations.
Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement
preparation and presentation.

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles,
and includes those policies and procedures that:

●

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of
the assets of the Company;

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with U.S. GAAP and that receipts and expenditures of the company are being made only in accordance with
authorization of management and directors of the Company; and

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the
Company's assets that could have a material effect on the financial statements.

Under the supervision and with the participation of our management, including the CEO and Interim COO and CFO, we conducted an
evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2017 based upon the criteria set forth in
Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(“COSO”). Based on our assessment we concluded that, as of December 31, 2017, our internal control over financial reporting was
effective based on those criteria. Marcum LLP, our independent registered public accounting firm, has issued an attestation report covering
our internal control over financial reporting, which begins on page 50.

Changes in Internal Control Over Financial Reporting

Following identification of material weaknesses as of December 31, 2016, we have worked diligently to improve communication between
management and the Board of Directors, including committees. We have taken steps to (i) ensure adequate communication between
management, the Board of Directors, and its committees, and (ii) educate the Board of Directors, including its committees, about their role
in maintaining effective oversight of the Company’s financial reporting processes. As a result, our management considers the material
weaknesses to be corrected.

Except for the change noted above, during the year ended December 31, 2017, there were no other changes in our internal control over
financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Shareholders and Board of Directors of
Navidea Biopharmaceuticals, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Navidea Biopharmaceuticals, Inc.’s (the “Company”) internal control over financial reporting as of December 31,
2017, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material aspects, effective internal control
over financial reporting as of December 31, 2017, based on criteria established in Internal Control – Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”), the consolidated balance sheets as of December 31, 2017 and 2016, and the related consolidated statements of operations,
comprehensive income (loss), stockholders’ equity (deficit), and cash flows for the years then ended of the Company, and our report
dated March 15, 2018 expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of
the effectiveness of internal control over financial reporting, included in the accompanying “Management Annual Report on Internal
Control over Financial Reporting”. Our responsibility is to express an opinion on the Company's internal control over financial reporting
based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the
financial statements.

Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that degree of compliance with the policies or procedures may deteriorate.

/s/ Marcum LLP

New Haven, CT
March 15, 2018

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Directors

Set forth below are the names and committee assignments of the persons who constitute our Board of Directors.

Name
Claudine Bruck, Ph.D. (a)
Anthony S. Fiorino, M.D., Ph.D. (b)
Michael M. Goldberg, M.D.
Mark I. Greene, M.D., Ph.D., FRCP
Y. Michael Rice
Eric K. Rowinsky, M.D.

Age Committee(s)

62 —
50 —
59 —
69 Audit; Compensation, Nominating and Governance
53 Audit (Chairman); Compensation, Nominating and Governance
61 Audit; Compensation, Nominating and Governance (Chairman)

(a) Dr. Bruck was appointed to the Board of Directors effective March 5, 2018.
(b) Dr. Fiorino resigned from the Board of Directors effective October 9, 2017.

Director Qualifications

The Board of Directors believes that individuals who serve on the Board should have demonstrated notable or significant achievements in
their respective field; should possess the requisite intelligence, education and experience to make a significant contribution to the Board
and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and should have the highest ethical standards, a
strong sense of professionalism and intense dedication to serving the interests of our stockholders. The following are qualifications,
experience and skills for Board members which are important to our business and its future:

●

General Management. Directors who have served in senior leadership positions are important to us as they bring experience
and perspective in analyzing, shaping, and overseeing the execution of important operational and policy issues at a senior
level. These directors’ insights and guidance, and their ability to assess and respond to situations encountered in serving on our
Board of Directors, are enhanced by their leadership experience developed at businesses or organizations that operated on a
global scale, faced significant competition, or involved other evolving business models.

Industry Knowledge. Because we are a pharmaceutical development company, education or experience in our industry,
including medicine, pharmaceutical development, marketing, distribution, or the regulatory environment, is important because
such experience assists our Directors in understanding and advising our Company.

Business Development/Strategic Planning. Directors who have a background in strategic planning, business development,
strategic alliances, mergers and acquisitions, and teamwork and process improvement provide insight into developing and
implementing strategies for growing our business.

Finance/Accounting/Control. Knowledge of capital markets, capital structure, financial control, audit, reporting, financial
planning, and forecasting are important qualities of our directors because such qualities assist in understanding, advising, and
overseeing our Company’s capital structure, financing and investing activities, financial reporting, and internal control of such
activities.

Board Experience/Governance. Directors who have served on other public company boards can offer advice and insights with
regard to the dynamics and operation of a board of directors, the relations of a board to the chief executive officer and other
management personnel, the importance of particular agenda and oversight matters, and oversight of a changing mix of
strategic, operational, and compliance-related matters.

Biographical Information

Set forth below is current biographical information about our directors, including the qualifications, experience and skills that make them
suitable for service as a director. Each listed director’s respective experience and qualifications described below led the Compensation,
Nominating and Governance (“CNG”) Committee of our Board of Directors to conclude that such director is qualified to serve as a
member of our Board of Directors.

Director whose term continues until the 2018 Annual Meeting:

Claudine Bruck, Ph.D., has served as a director of Navidea since March 2018. Dr. Bruck is co-founder and has served as Chief Executive
Officer of Prolifagen LLC, a start-up company developing a microRNA-based medicine for tissue regeneration, since June 2016. She is
also a course Director at University of Pennsylvania’s Institute of Translational Medicine and Applied Technology, a consultant to
BioMotiv LLC and a member of the board of directors of QRPharma, a biotechnology company focused on development of medicines for
neurodegenerative diseases. Dr. Bruck joined GlaxoSmithKline (“GSK”) to build GSK’s HIV vaccine program in 1985. In her role in
GSK’s vaccine group, Dr. Bruck was instrumental in the development of GSK’s HPV vaccine (Cervarix), and headed their cancer vaccine
program from inception to Phase 2 before joining the drug discovery group of GSK. She held several roles in the drug discovery group,
from Head of Clinical Immunology (2004-2005) to VP and Head of Biology for the Center of Excellence for External Drug Discovery
(2005-2008), to VP and Head of a newly formed ophthalmology R&D group (2008-2015). Dr. Bruck has a Ph.D. in Biochemistry from the
University of Brussels. She was a post-doctoral student at Harvard University Medical School and an Assistant Professor at Tufts Medical
School.

Directors whose terms continue until the 2019 Annual Meeting:

Y. Michael Rice has served as a director of Navidea since May 2016. Mr. Rice is a founding partner of LifeSci Advisors, LLC and LifeSci
Capital, LLC, companies which he co-founded in March 2010. Prior to co-founding LifeSci Advisors and LifeSci Capital, Mr. Rice was
the co-head of health care investment banking at Canaccord Adams, where he was involved in debt and equity financing. Mr. Rice was
also a Managing Director at ThinkEquity Partners where he was responsible for managing Healthcare Capital Markets, including the
structuring and execution of numerous transactions. Prior to that, Mr. Rice served as a Managing Director at Banc of America serving
large hedge funds and private equity healthcare funds. Previously, he was a Managing Director at JPMorgan/Hambrecht & Quist. Mr. Rice
currently serves on the board of directors of RDD Pharma, a specialty pharmaceuticals company. Mr. Rice received a B.A. from the
University of Maryland.

Eric K. Rowinsky, M.D. has served as a director of Navidea since July 2010. Dr. Rowinsky has served as Executive Chairman, President,
and Head of the Scientific Advisory Board of RGenix, Inc, as well as the Chief Scientific Officer of Clearpath Development Co., which
rapidly advances development stage therapeutic assets to pre-defined human Proof-of-Concept milestones, since June 2015. He has also
served as the Head of Research and Development, Executive Vice President, and Chief Medical Officer of Stemline Therapeutics, Inc.
from 2012 to 2015, and was the Founder of and served as Chief Executive Officer of Primrose Therapeutics from August 2010 to
September 2011 at which time it was acquired by Stemline. From 2005 to 2009, he served as the Chief Medical Officer and Executive
Vice President of Clinical Development and Regulatory Affairs of ImClone Systems Incorporated, a life sciences company, which was
acquired by Eli Lilly. Prior to that, Dr. Rowinsky held several positions at the Cancer Therapy & Research Center’s Institute of Drug
Development, including Director of the Institute, Director of Clinical Research and SBC Endowed Chair for Early Drug Development, and
concurrently served as Clinical Professor of Medicine in the Division of Medical Oncology at the University of Texas Health Science
Center at San Antonio. Dr. Rowinsky was an Associate Professor of Oncology at the Johns Hopkins University School of Medicine and on
active staff at the Johns Hopkins School of Medicine from 1987 to 1996. Dr. Rowinsky is currently a member of the boards of directors of
Biogen Idec, Inc., Verastem, Inc. and Fortress Biotech, Inc., and has served on the board of directors of BIND Therapeutics, Inc., all
publicly-held life science companies. He is also an Adjunct Professor of Medicine at New York University. Dr. Rowinsky has extensive
research and drug development experience, oncology expertise, corporate strategy, and broad scientific and medical knowledge.

Directors whose terms continue until the 2020 Annual Meeting:

Michael M. Goldberg, M.D. has served as a director of Navidea since November 2013 and as President and Chief Executive Officer of
Navidea since September 2016. Dr. Goldberg has been a Managing Partner of Montaur Capital Partners since January 2007. From 2007 to
2013 Dr. Goldberg managed a life science investment portfolio for Platinum Partners called Platinum-Montaur Life Sciences, LLC. Prior
to that, Dr. Goldberg served as the Chief Executive Officer of Emisphere Technologies, Inc., from August 1990 to January 2007 and as its
President from August 1990 to October 1995. He also served on Emisphere’s board of directors from November 1991 to January 2007.
Previous to that, Dr. Goldberg served as Vice President of The First Boston Corp., where he was a founding member of the Healthcare
Banking Group. Dr. Goldberg has been a Director of Echo Therapeutics, Inc., AngioLight, Inc., Urigen Pharmaceuticals, Inc., Alliqua
BioMedical, Inc., and ADVENTRX Pharmaceuticals, Inc. Dr. Goldberg received a B.S. degree from Rensselaer Polytechnic Institute, an
M.D. from Albany Medical College of Union University in 1982, and an M.B.A. from Columbia University Graduate School of Business
in 1985.

Mark I. Greene M.D., Ph.D., FRCP has served as a director of Navidea since March 2016. Dr. Greene has been Director of the Division
of Immunology, Department of Pathology at University of Pennsylvania School of Medicine since 1986. Dr. Greene was the Associate
Director of the Division for Fundamental Research, University of Pennsylvania Cancer Center from 1987-2009 and has been the John
Eckman Professor of Medical Science of the University of Pennsylvania School of Medicine since 1989. From 1980 to 1986 he served as
an Associate Professor of both Harvard University and Harvard Medical School. His groundbreaking work in erbB receptor function led to
the development of Herceptin (Genentech) and to the development of a proprietary method for the rapid, reliable design of allosteric
inhibitors of receptors and enzymes. Dr. Greene previously served as a scientific advisor to Navidea’s subsidiary, Macrophage
Therapeutics, Inc., Ception Therapeutics, Antisome PLC and Fulcrum Technologies and also served as a Member of the Scientific
Advisory Boards of Fulcrum Pharmaceuticals, Inc. and Tolerx, Inc. He previously served as an Emeritus Director of Emisphere
Technologies, Inc. where he also served as a Director. Additionally, Dr. Greene previously served as a Director of Ribi Immunochem
Research, Inc. and currently serves as a Consultant to Martell Biosystems, Inc. Dr. Greene also serves as an advisor to Belgene,
SternGreene and Abzed, all start-up companies. Dr. Greene has an outstanding record of contributions to cancer biology and drug
discovery that is well-documented in over 400 publications. Dr. Greene is a recipient of many awards and patents and has collaborated
with a number of pharmaceutical companies. He received his M.D. (1972) and Ph.D. (1977) from the University of Manitoba, Canada,
became a Fellow of the Royal College in 1976 and then joined the faculty of Harvard Medical School in 1976.

Director whose term ended effective October 9, 2017:

Anthony S. Fiorino, M.D., Ph.D. served as a Director of Navidea from March 2016 to October 2017. Dr. Fiorino has served as Chief
Medical Officer and Chief Operating Officer of Immune Pharmaceuticals, Inc. since August 2017. From December 2015 to July 2017, he
served as President and Chief Executive Officer of Triumvira Immunologics, located in Hamilton, Ontario, Canada and Hackensack, New
Jersey. Prior to this he was Chief Executive Officer at BrainStorm Cell Therapeutics from June 2014 to November 2015. From January
2013 to May 2014, he was a Managing Director at Greywall Asset Management, a healthcare equity fund, and President and Managing
Member of Alchimia Partners, his consulting firm, from February 2008 to December 2012. Dr. Fiorino was also Founder, President and
CEO of EnzymeRx, where he led the acquisition of a late-stage pre-clinical biologic and the development of the compound through Phase
1/2 clinical trials and its subsequent sale to 3SBio. Before founding EnzymeRx, Dr. Fiorino worked as a biotechnology and
pharmaceuticals analyst and portfolio manager at firms including JP Morgan, Citigroup, and Pequot Capital. Dr. Fiorino earned an M.D.
(1996) and a Ph.D. (1995) from the Albert Einstein College of Medicine where he studied the differentiation of liver progenitor cells, a
B.S. in Biology from the Massachusetts Institute of Technology (1989) and has authored over 20 publications in the medical and scientific
literature.

Executive Officers

In addition to Dr. Goldberg, the following individuals are senior executive officers of Navidea and serve in the position(s) indicated below:

Name
Frederick O. Cope, Ph.D., F.A.C.N.,

Age Position

C.N.S.
Jed A. Latkin

71 Senior Vice President and Chief Scientific Officer
43 Chief Operating Officer, Chief Financial Officer, Treasurer and Secretary

Frederick O. Cope, Ph.D., F.A.C.N., C.N.S., has served as Senior Vice President and Chief Scientific Officer of Navidea since May
2013. Previous to that, Dr. Cope served as Senior Vice President, Pharmaceutical Research and Clinical Development of Navidea from
July 2010 to May 2013 and as Vice President, Pharmaceutical Research and Clinical Development from February 2009 to July 2010. Prior
to accepting his position with Navidea, Dr. Cope served as the Assistant Director for Research and Head of Program Research
Development for The Ohio State University Comprehensive Cancer Center, The James Cancer Hospital and The Richard J. Solove
Research Institute. Dr. Cope also served as head of the Cancer and AIDS product development and commercialization program for the
ROSS/Abbott Laboratories division, and head of human and veterinary vaccine production and improvement group for Wyeth
Laboratories. Dr. Cope served a fellowship in oncology at the McArdle Laboratory for Cancer Research at the University of Wisconsin-
Madison and was the honored scientist in residence at the National Cancer Center Research Institute in Tokyo; he is the recipient of the
Ernst W. Volwiler Award and nominee for the EANM Marie Curie award. Dr. Cope is also active in a number of professional and
scientific organizations such as serving as an editorial reviewer for several professional journals, and as an advisor/director to the research
program of Roswell Park Memorial Cancer Center. Dr. Cope received his B.Sc. from the Delaware Valley College of Science and
Agriculture, his M.S. from Millersville University of Pennsylvania and his Ph.D. from the University of Connecticut.

Jed A. Latkin has served as Chief Operating Officer and Chief Financial Officer of Navidea since May 2017. Mr. Latkin also served as
Interim Chief Operating Officer of Navidea from April 2016 to April 2017. Mr. Latkin has more than twenty years of experience in the
financial industry supporting many investments in major markets including biotechnology and pharmaceuticals. He most recently was
employed by Nagel Avenue Capital, LLC since 2010 and in that capacity he provided contracted services as a Portfolio Manager, Asset
Based Lending for Platinum Partners Value Arbitrage Fund L.P. Mr. Latkin has been responsible for a large diversified portfolio of asset
based investments in varying industries, including product manufacturing, agriculture, energy, and healthcare. In connection with this role,
he served as Chief Executive Officer of End of Life Petroleum Holdings, LLC and Black Elk Energy, LLC, Chief Financial Officer of
Viper Powersports, Inc. and West Ventures, LLC, and Portfolio Manager of Precious Capital, LLC. Mr. Latkin served on the Board of
Directors for Viper Powersports, Inc. from 2012 to 2013 and currently serves on the boards of directors of the Renewable Fuels
Association and Buffalo Lake Advanced Biofuels. Mr. Latkin earned a B.A. from Rutgers University and a M.B.A. from Columbia
Business School.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our officers and directors, and greater than 10% stockholders, to file reports of ownership and
changes in ownership of our securities with the Securities and Exchange Commission. Copies of the reports are required by SEC
regulation to be furnished to us. Based on our review of these reports and written representations from reporting persons, we believe that
all reporting persons complied with all filing requirements during the fiscal year ended December 31, 2017, except for: (1) Frederick O.
Cope, Ph.D., Thomas J. Klima, and William J. Regan, who each had one late Form 4 filing related to stock issued in lieu of a portion of
their annual cash bonuses; and (2) Y. Michael Rice, who had one late Form 4 filing related to stock donated to a charitable organization.

Code of Business Conduct and Ethics

We have adopted a code of business conduct and ethics that applies to our directors, officers and all employees. The code of business
conduct and ethics is posted on our website at www.navidea.com. The code of business conduct and ethics may also be obtained free of
charge by writing to Navidea Biopharmaceuticals, Inc., Attn: Chief Financial Officer, 4995 Bradenton Avenue, Suite 240, Dublin, Ohio
43017.

Corporate Governance

Our Board of Directors is responsible for establishing broad corporate policies and reviewing our overall performance rather than day-to-
day operations. The primary responsibility of our Board is to oversee the management of Navidea and, in doing so, serve the best interests
of the Company and our stockholders. Our Board selects, evaluates and provides for the succession of executive officers and, subject to
stockholder election, directors. It reviews and approves corporate objectives and strategies, and evaluates significant policies and proposed
major commitments of corporate resources. Our Board also participates in decisions that have a potential major economic impact on the
Company. Management keeps our directors informed of Company activity through regular communication, including written reports and
presentations at Board and committee meetings.

Board of Directors Meetings

Our Board of Directors held a total of nine meetings in the fiscal year ended December 31, 2017, and each of the directors attended at least
75 percent of the aggregate number of meetings of the Board of Directors and committees (if any) on which he served. It is our policy that
all directors attend the Annual Meeting of Stockholders. However, conflicts and unforeseen events may prevent the attendance of a
director, or directors. All then-current members of our Board of Directors attended the 2017 Annual Meeting of Stockholders in person.

The Board of Directors maintains the following committees to assist it in its oversight responsibilities. The current membership of each
committee is indicated in the list of directors set forth under “Board of Directors” above.

Audit Committee

The Audit Committee of the Board of Directors selects our independent registered public accounting firm with whom the Audit
Committee reviews the scope of audit and non-audit assignments and related fees, the accounting principles that we use in financial
reporting, and the adequacy of our internal control procedures. The current members of our Audit Committee are: Y. Michael Rice
(Chairman), Mark I. Greene, M.D., Ph.D., FRCP, and Eric K. Rowinsky, M.D., each of whom is “independent” under Section 803A of the
NYSE American Company Guide. Prior to October 9, 2017 (the date of Dr. Fiorino’s resignation), the members of our Audit Committee
were: Mr. Rice (Chairman), Dr. Fiorino, and Dr. Rowinsky. The Board of Directors has determined that Y. Michael Rice meets the
requirements of an “audit committee financial expert” as set forth in Section 407(d)(5) of Regulation S-K promulgated by the SEC. The
Audit Committee held four meetings in the fiscal year ended December 31, 2017. The Board of Directors adopted a written Amended and
Restated Audit Committee Charter on April 30, 2004. A copy of the Amended and Restated Audit Committee Charter is posted on the
Company’s website at www.navidea.com.

Compensation, Nominating and Governance Committee

The CNG Committee of the Board of Directors discharges the Board’s responsibilities relating to the compensation of the Company's
directors, executive officers and associates, identifies and recommends to the Board of Directors nominees for election to the Board, and
assists the Board in the implementation of sound corporate governance principles and practices. With respect to its compensation
functions, the CNG Committee evaluates and approves executive officer compensation and reviews and makes recommendations to the
Board with respect to director compensation, including incentive or equity-based compensation plans; reviews and evaluates any
discussion and analysis of executive officer and director compensation included in the Company’s annual report or proxy statement, and
prepares and approves any report on executive officer and director compensation for inclusion in the Company’s annual report or proxy
statement required by applicable rules and regulations; and monitors and evaluates, at the Committee’s discretion, matters relating to the
compensation and benefits structure of the Company and such other domestic and foreign subsidiaries or affiliates, as it deems
appropriate. The members of our CNG Committee are: Eric K. Rowinsky, M.D. (Chairman), Mark I. Greene, M.D., Ph.D., FRCP, and Y.
Michael Rice. The CNG Committee held two meetings in the fiscal year ended December 31, 2017 to complement compensation-related
discussions held by the full Board. The Board of Directors adopted a written Compensation, Nominating and Governance Committee
Charter on February 26, 2009. A copy of the Compensation, Nominating and Governance Committee Charter is posted on the Company’s
website at www.navidea.com.

Item 11. Executive Compensation

Compensation Discussion and Analysis

Overview of Compensation Program. The CNG Committee of the Board of Directors is responsible for establishing and implementing our
compensation policies applicable to senior executives and monitoring our compensation practices. The CNG Committee seeks to maintain
compensation plans that are fair, reasonable and competitive. The CNG Committee is responsible for reviewing and approving all senior
executive compensation, all awards under our cash bonus plan, and awards under our equity-based compensation plans.

Philosophy and Goals of Executive Compensation Plans. The CNG Committee’s philosophy for executive compensation is to:

●

Pay for performance: The CNG Committee believes that our executives should be compensated based upon their ability to
achieve specific operational and strategic results. Therefore, our compensation plans are designed to provide rewards for the
individual’s contribution to our performance.

Pay commensurate with other companies categorized as value creators: The CNG Committee has set a goal that the Company
should move toward compensation levels for senior executives that are, at a minimum, at the 40th to 50th percentile for similar
executives in the workforce while taking into account current market conditions and Company performance. This allows us to
attract, hire, reward and retain senior executives who formulate and execute our strategic plans and drive exceptional results.

To assess whether our programs are competitive, the CNG Committee reviews compensation information of peer companies, national data
and trends in executive compensation to help determine the appropriateness of our plans and compensation levels. These reviews, and the
CNG Committee’s commitment to pay for performance, become the basis for the CNG Committee’s decisions on compensation plans and
individual executive compensation payments.

The CNG Committee has approved a variety of programs that work together to provide a combination of basic compensation and strong
incentives. While it is important for us to provide certain base level salaries and benefits to remain competitive, the CNG Committee’s
objective is to provide compensation plans with incentive opportunities that motivate and reward executives for consistently achieving
superior results. The CNG Committee designs our compensation plans to:

●

Reward executives based upon overall company performance, their individual contributions and creation of stockholder value;

Encourage executives to make a long-term commitment to our Company; and

Align executive incentive plans with the long-term interests of stockholders.

The CNG Committee reviews competitive information and individual compensation levels at least annually. During the review process,
the CNG Committee addresses the following questions:

●

Do any existing compensation plans need to be adjusted to reflect changes in competitive practices, different market
circumstances or changes to our strategic initiatives?

Should any existing compensation plans be eliminated or new plans be added to the executive compensation programs?

● What are the compensation-related objectives for our compensation plans for the upcoming fiscal year?

●

Based upon individual performance, what compensation modifications should be made to provide incentives for senior
executives to perform at superior levels?

In addressing these questions, the CNG Committee considers input from management, outside compensation experts and published
surveys of compensation levels and practices.

The CNG Committee does not believe that our compensation policies and practices for our employees give rise to risks that are reasonably
likely to have a material adverse effect on the Company. As noted below, our incentive-based compensation is generally tied to Company
financial performance (i.e., revenue, gross margin or budgeted expense targets) or product development goals (i.e., clinical trial progress
or regulatory milestones). The CNG Committee believes that the existence of these financial performance incentives creates a strong
motivation for Company employees to contribute towards the achievement of strong, sustainable financial and development performance,
and believes that the Company has a strong set of internal controls that minimize the risk that financial performance can be misstated in
order to achieve incentive compensation payouts.

In addition to the aforementioned considerations, the CNG Committee also takes into account the outcome of stockholder advisory (“say-
on-pay”) votes, taken every three years, on the compensation of our Chief Executive Officer, Chief Financial Officer, and our next three
highest-paid executive officers (the “Named Executive Officers”). At the Annual Meeting of Stockholders held on June 29, 2017,
approximately 75% of our stockholders voted in favor of the resolution relating to the compensation of our Named Executive Officers.
The CNG Committee believes this affirmed stockholders’ support of the Company’s executive compensation program. The CNG
Committee will continue to consider the results of future say-on-pay votes when making future compensation decisions for the executive
officers.

The CNG Committee believes that, given the increased responsibilities of the President and Chief Executive Officer related to the
Company’s legal and financial difficulties at the time of his appointment, Dr. Goldberg’s compensation is commensurate with that of his
predecessor.

Scope of Authority of the CNG Committee. The Board of Directors has authorized the CNG Committee to establish the compensation
programs for all executive officers and to provide oversight for compliance with our compensation philosophy. The CNG Committee
delegates the day-to-day administration of the compensation plans to management (except with respect to our executive officers), but
retains responsibility for ensuring that the plan administration is consistent with the Company’s policies. Annually, the CNG Committee
sets the compensation for our executive officers, including objectives and awards under incentive plans. The Chief Executive Officer
provides input for the CNG Committee regarding the performance and appropriate compensation of the other officers. The CNG
Committee gives considerable weight to the Chief Executive Officer’s evaluation of the other officers because of his direct knowledge of
each officer’s performance and contributions. The CNG Committee also makes recommendations to the Board of Directors on appropriate
compensation for the non-employee directors. In addition to overseeing the compensation of executive officers, the CNG Committee
approves awards under short-term cash incentive and long-term equity-based compensation plans for all other employees. For more
information on the CNG Committee’s role, see the CNG Committee’s charter, which can be found on our website at www.navidea.com.

Independent Compensation Expertise. The CNG Committee is authorized to periodically retain independent experts to assist in evaluating
executive compensation plans and in setting executive compensation levels. These experts provide information on trends and best
practices so the CNG Committee can formulate ongoing plans for executive compensation. The CNG Committee retained Pearl Meyer &
Partners (“Pearl Meyer”) as its independent consultant to assist in the determination of the reasonableness and competitiveness of the
executive compensation plans and senior executives’ individual compensation levels for fiscal 2015. No conflict of interest exists that
would prevent Pearl Meyer from serving as independent consultant to the CNG Committee.

For fiscal 2015, Pearl Meyer performed a benchmark compensation review of our key executive positions, including our Named Executive
Officers. Pearl Meyer utilized both published survey and proxy reported data from compensation peers, with market data aged to March 1,
2016 by an annualized rate of 3.0%, the expected pay increase in 2016 for executives in the life sciences industry.

In evaluating appropriate executive compensation, it is common practice to set targets at a point within the competitive marketplace. The
CNG Committee sets its competitive compensation levels based upon its compensation philosophy. Following completion of the Pearl
Meyer study for 2015, the CNG Committee noted that our overall executive compensation was, in aggregate, below the 25th percentile for
an established peer group of companies.

Peer Group Companies. In addition to independent survey analysis, in 2015 the CNG Committee also reviewed the compensation levels at
specific competitive benchmark companies. With input from management, the CNG Committee chose the peer companies because they
operate within the biotechnology industry, have market capitalization between $100 million and $500 million, have similar business
models to our Company or have comparable key executive positions. While the specific plans for these companies may or may not be
used, it is helpful to review their compensation data to provide benchmarks for the overall compensation levels that will be used to attract,
hire, retain and motivate our executives.

As competitors and similarly situated companies that compete for the same executive talent, the CNG Committee determined that the
following peer group companies most closely matched the responsibilities and requirements of our executives:

Sangamo Biosciences, Inc.
Inovio Pharmaceuticals, Inc.
Geron Corporation
Rigel Pharmaceuticals, Inc.
OncoMed Pharmaceuticals, Inc.
CTI BioPharma Corp.
Unilife Corporation

ArQule, Inc.
Galena Biopharma, Inc.
Keryx Biopharmaceuticals, Inc.
BioTime, Inc.
Omeros Corporation
Immunomedics, Inc.

Nymox Pharmaceutical Corporation

Pearl Meyer and the CNG Committee used the publicly available compensation information for these companies to analyze our
competitive position in the industry. Base salaries and short-term and long term incentive plans of the executives of these companies were
reviewed to provide background and perspective in analyzing the compensation levels for our executives.

Specific Elements of Executive Compensation

Base Salary. Using information gathered by Pearl Meyer, peer company data, national surveys, general compensation trend information
and recommendations from management, the CNG Committee approved the fiscal 2015 base salaries for our senior executives. Base
salaries for senior executives are set using the CNG Committee’s philosophy that compensation should be competitive and based upon
performance. Executives should expect that their base salaries, coupled with a cash bonus award, would provide them the opportunity to be
compensated at or above the competitive market at the 40th to 50th percentile.

Based on competitive reviews of similar positions, industry salary trends, overall company results and individual performance, salary
increases may be approved from time to time. The CNG Committee reviews and approves base salaries of all executive officers. In setting
specific base salaries for fiscal 2015, the CNG Committee considered published proxy data for similar positions at peer group companies.

The following table shows the changes in base salaries for the Named Executive Officers that were approved for fiscal 201 7 compared to
the approved salaries for fiscal 2016:

Named Executive Officer
Michael M. Goldberg, M.D.
Frederick O. Cope, Ph.D.
Thomas J. Klima (c)
Jed A. Latkin (d)
William J. Regan (e)

Fiscal 2017
Base Salary(a)

Fiscal 2016
Base Salary(a)

Change(b)

400,000 $
279,130
270,000
325,000
250,000

400,000
279,130
270,000
300,000
250,000

0.0%
0.0%
0.0%
8.3%
0.0%

(a)

The amount shown for fiscal 2017 and 2016 is the approved annual salary of the Named Executive Officer in effect at the end
of each year, or at the date of separation. The actual amount paid to the Named Executive Officer during fiscal 2017 and 2016
is shown under “Salary” in the Summary Compensation table below.

(b) Due to the Company’s financial difficulties in 2017, Named Executive Officers did not receive salary increases in 2017, except

for Mr. Latkin.

(c) Mr. Klima separated from the Company effective March 8, 2017.
(d) Mr. Latkin received an increase in base salary in connection with his appointment as Chief Operating Officer and Chief

Financial Officer of the Company effective May 4, 2017.
(e) Mr. Regan separated from the Company effective June 30, 2017.

The CNG Committee has not approved any changes to base salaries of Named Executive Officers for fiscal 2018.

Short-Term Incentive Compensation. Our executive officers, along with all of our employees, are eligible to participate in our annual cash
bonus program, which has four primary objectives:

●

Attract, retain and motivate top-quality executives who can add significant value to the Company;

Create an incentive compensation opportunity that is an integral part of the employee ’s total compensation program;

Reward participants’ contributions to the achievement of our business results; and

Provide an incentive for individuals to achieve corporate objectives that are tied to our strategic goals.

The cash bonus compensation plan provides each participant with an opportunity to receive an annual cash bonus based on our Company’s
performance during the fiscal year. Cash bonus targets for senior executives are determined as a percentage of base salary, based in part on
published proxy data for similar positions at peer group companies. The following are the key provisions of the cash bonus compensation
plan:

●

The plan is administered by the CNG Committee, which has the power and authority to establish, adjust, pay or decline to pay
the cash bonus for each participant, including the power and authority to increase or decrease the cash bonus otherwise payable
to a participant. However, the Committee does not have the power to increase, or make adjustments that would have the effect
of increasing, the cash bonus otherwise payable to any executive officer. The Committee has the right to delegate to the Chief
Executive Officer its authority and responsibilities with respect to the cash bonuses payable to employees other than executive
officers.

●

All Company employees are eligible to participate, except interns.

●

The CNG Committee is responsible for specifying the terms and conditions for earning cash bonuses, including establishing
specific performance objectives. Cash bonuses payable to executive officers for 2017 were intended to constitute “qualified
performance-based compensation” for purposes of Section 162(m) of the Internal Revenue Code.

As soon as reasonably practicable after the end of each fiscal year, the CNG Committee determines whether and to what extent
each specified business performance objective has been achieved and the amount of the cash bonus to be paid to each
participant.

In June 2017, the Board of Directors established the fiscal 2017 targets and performance measures for all Company employees. For fiscal
2017, the cash bonus for each executive officer was a function of the designated target bonus amount and certain business performance
objectives, weighted as a percentage of the total target amount. The business performance objectives established for fiscal 2017 were as
follows:

●

Achievement of various development goals for diagnostic applications of the Company’s Manocept platform, including:

o Complete enrollment in the Company’s NAV3-23 Phase 1 trial, subject to a maximum 5% reduction of bonus if not

achieved;

o Achieve 50% of target enrollment in the Company’s NAV3-21 Phase 1 trial, subject to a maximum 5% reduction of

bonus if not achieved;

o Develop an approvable plan for activated macrophage-caused inflammation, subject to a maximum 10% reduction of

bonus if not achieved;

o Commence a clinical study for CV imaging of coronary arteries, subject to a maximum 10% reduction of bonus if not

achieved; and

o Commence a clinical study for NASH imaging, subject to a maximum 10% reduction of bonus if not achieved.

●

Achievement of various development goals for therapeutic applications of the Company’s Manocept platform, including:

o Develop a prototype oral formulation of Manocept, subject to a maximum 10% reduction of bonus if not achieved;

o Develop new carrier prototypes, subject to a maximum 10% reduction of bonus if not achieved; and

File intellectual property claims on new advances, subject to a maximum 10% reduction of bonus if not achieved.

●

Achievement of various corporate goals, including:

Structure and initiate drafting of MT spinout or funding transaction, subject to a maximum 10% reduction of bonus if not
achieved; and

o Reduce debt and expenses so non-discretionary expenses are less than a specified target amount, subject to a maximum

20% reduction of bonus if not achieved.

For the Named Executive Officers, cash bonus targets fiscal 2017 remained unchanged from 2016 and were as follows:

Named Executive Officer
Michael M. Goldberg, M.D.
Frederick O. Cope, Ph.D.
Thomas J. Klima (a)
Jed A. Latkin
William J. Regan (b)

Target Cash
Bonus
(% of Salary)

Target Cash
Bonus
($ Amount)

75.0% $
35.0%
35.0%
75.0%
35.0%

300,000
97,696
94,500
243,750
87,500

(a) Mr. Klima separated from the Company effective March 8, 2017 and therefore will not be paid a bonus for fiscal 2017.
(b) Mr. Regan separated from the Company effective June 30, 2017 and therefore will not be paid a bonus for fiscal 2017.

On February 20, 2018, the Board of Directors determined the amounts to be awarded as 2017 bonuses to all employees, including the
Named Executive Officers. The Board of Directors recognized the achievement of all 2017 bonus goals and thus awarded bonuses at
100% of target amounts for all employees, to be paid 50% in stock immediately and 50% in cash at such time as the Company’s financial
position allows a cash payment. However, Dr. Goldberg’s and Mr. Latkin’s bonus awards will be 100% cash, to be paid following
achievement of certain additional goals set by the Board and at such time as the Company’s financial position allows a cash payment.

Also on February 20, 2018, the Board of Directors determined the 2018 cash bonus targets for Named Executive Officers as follows:

Named Executive Officer
Michael M. Goldberg, M.D.
Frederick O. Cope, Ph.D.
Jed A. Latkin

Target Cash
Bonus
(% of Salary)

Target Cash
Bonus
($ Amount)

75.0% $
35.0%
75.0%

300,000
97,696
243,750

Long-Term Incentive Compensation. All Company employees are eligible to receive equity awards in the form of stock options or
restricted stock. Equity instruments awarded under the Company’s equity-based compensation plan are based on the following criteria:

●

Analysis of competitive information for comparable positions;

Evaluation of the value added to the Company by hiring or retaining specific employees; and

Each employee’s long-term potential contributions to our Company.

Although equity awards may be made at any time as determined by the CNG Committee, they are generally made to all full-time
employees once per year or on the recipient’s hire date in the case of new-hire grants.

Equity-based compensation is an effective method to align the interests of stockholders and management and focus management’s
attention on long-term results. When awarding equity-based compensation the CNG Committee considers the impact the participant can
have on our overall performance, strategic direction, financial results and stockholder value. Therefore, equity awards are primarily based
upon the participant’s position in the organization, competitive necessity and individual performance. Equity awards for senior executives
are determined as a percentage of base salary, based on published proxy data for similar positions at peer group companies. Stock option
awards have vesting schedules over several years to promote long-term performance and retention of the recipient, and restricted stock
awards may include specific performance criteria for vesting or vest over a specified period of time. In April 2017, the CNG Committee
vested 50,000 shares of restricted stock held by Dr. Cope after determining that the vesting events would never occur due to changes in
the Company’s development programs.

In May 2017, the Company awarded options to purchase 1,000,000 shares of common stock to Mr. Latkin in connection with his
appointment as permanent Chief Operating Officer and Chief Financial Officer. The options were awarded with the following terms: (1)
333,334 options with an exercise price of $0.65 will be exercisable on or after May 4, 2017, so long as the closing price of the underlying
common stock equals or exceeds $0.85 per share; (2) 333,333 options with an exercise price of $0.75 will be exercisable on or after
December 31, 2017, so long as the closing price of the underlying common stock equals or exceeds $1.00 per share; and (3) 333,333
options with an exercise price of $1.00 will be exercisable on or after December 31, 2018, so long as the closing price of the underlying
common stock equals or exceeds $1.25 per share. The options will expire on the tenth anniversary of the date of grant. The CNG
Committee believes that, given the increased responsibilities of the Chief Operating Officer and Chief Financial Officer related to the
Company’s legal and financial difficulties at the time of his appointment, Mr. Latkin’s compensation, including his equity awards, is
commensurate with that of his predecessor. We did not grant equity awards to our Named Executive Officers in 2017, other than Mr.
Latkin.

Other Benefits and Perquisites. The Named Executive Officers are generally eligible to participate in other benefit plans on the same
terms as other employees. These plans include medical, dental, vision, disability and life insurance benefits, and our 401(k) retirement
savings plan (the “401(k) Plan”).

Our vacation policy allows employees to carry up to 40 hours of unused vacation time forward to the next fiscal year. Any unused
vacation time in excess of the amount eligible for rollover is generally forfeited.

Our Named Executive Officers are considered “key employees” for purposes of Internal Revenue Code (“IRC”) Section 125 Plan non-
discrimination testing. Based on such non-discrimination testing, we determined that our Section 125 Plan was “top-heavy” for fiscal
2017. As such, our key employees were ineligible to participate in the Section 125 Plan and were unable to pay their portion of medical,
dental, and vision premiums on a pre-tax basis during fiscal 2017. As a result, the Company reimbursed its key employees an amount equal
to the lost tax benefit. For fiscal 2018, we have determined that our Section 125 Plan is no longer “top-heavy.” As such, our key
employees are eligible to participate in the Section 125 Plan and may pay their portion of medical, dental and vision premiums on a pre-tax
basis beginning January 1, 2018.

We pay group life insurance premiums on behalf of all employees, including the Named Executive Officers. The benefit provides life
insurance coverage at two times the employee’s annual salary plus $10,000, up to a maximum of $630,000.

We also pay group long-term disability insurance premiums on behalf of all employees, including the Named Executive Officers. The
benefit provides long-term disability insurance coverage at 60% of the employee’s annual salary, up to a maximum of $10,000 per month,
beginning 180 days after the date of disability and continuing through age 65.

401(k) Retirement Plan. All employees are given an opportunity to participate in our 401(k) Plan, following a new-hire waiting period.
The 401(k) Plan allows participants to have pre-tax amounts withheld from their pay and provides for a discretionary employer matching
contribution (currently, a 40% match up to 5% of salary in the form of our common stock). Participants may invest their contributions in
various fund options, but are prohibited from investing their contributions in our common stock. Participants are immediately vested in
both their contributions and Company matching contributions. The 401(k) Plan qualifies under section 401 of the Internal Revenue Code,
which provides that employee and company contributions and income earned on contributions are not taxable to the employee until
withdrawn from the Plan, and that we may deduct our contributions when made.

Employment Agreements

Our senior executive officers are generally employed under employment agreements which specify the terms of their employment such as
base salary, benefits, paid time off, and post-employment benefits as shown in the tables below. Our employment agreements also specify
that if a change in control occurs with respect to our Company and the employment of a senior executive officer is concurrently or
subsequently terminated:

●

by the Company without cause (cause is defined as any willful breach of a material duty by the senior executive officer in the
course of his or her employment or willful and continued neglect of his or her duty as an employee);

by the expiration of the term of the employment agreement; or

by the resignation of the senior executive officer because his or her title, authority, responsibilities, salary, bonus opportunities
or benefits have materially diminished, a material adverse change in his or her working conditions has occurred, his or her
services are no longer required in light of the Company’s business plan, or we breach the agreement;

then, the senior executive officer would be paid a severance payment as disclosed in the tables below. For purposes of such employment
agreements, a change in control includes:

●

the acquisition, directly or indirectly, by a person (other than our Company, an employee benefit plan established by the Board
of Directors, or a participant in a transaction approved by the Board of Directors for the principal purpose of raising additional
capital) of beneficial ownership of 30% or more of our securities with voting power in the next meeting of holders of voting
securities to elect the Directors;

a majority of the Directors elected at any meeting of the holders of our voting securities are persons who were not nominated
by our then current Board of Directors or an authorized committee thereof;

our stockholders approve a merger or consolidation of our Company with another person, other than a merger or consolidation
in which the holders of our voting securities outstanding immediately before such merger or consolidation continue to hold
voting securities in the surviving or resulting corporation (in the same relative proportions to each other as existed before such
event) comprising 80% or more of the voting power for all purposes of the surviving or resulting corporation; or

our stockholders approve a transfer of substantially all of our assets to another person other than a transfer to a transferee, 80%
or more of the voting power of which is owned or controlled by us or by the holders of our voting securities outstanding
immediately before such transfer in the same relative proportions to each other as existed before such event.

Michael M. Goldberg, M.D. Dr. Goldberg was employed under a 12-month employment agreement effective through September 22, 2017.
The employment agreement provided for an annual base salary of $400,000. For the calendar year ending December 31, 2017, the CNG
Committee determined that the maximum bonus payment to Dr. Goldberg would be $300,000.

Dr. Goldberg’s employment agreement also provided for post-employment compensation based on the reason for termination:

●

For Cause – All salary, benefits and other payments shall cease at the time of termination, and the Company shall have no
further obligations to Dr. Goldberg.

Resignation – All salary, benefits and other payments shall cease at the time of resignation, and the Company shall have no
further obligations to Dr. Goldberg, except that the Company shall pay the value of any accrued but unused paid time off, and
the amount of all accrued but previously unpaid salary through the date of termination.

Death – All salary, benefits and other payments shall cease at the time of death, provided, however, that the Company shall
pay such other benefits required to be paid or provided to Dr. Goldberg’s estate under any plan, program, policy, practice,
contract, or arrangement in which Dr. Goldberg is eligible to receive such payments or benefits from the Company, for the
longer of 12 months or the full unexpired term of the employment agreement. The Company shall also pay to Dr. Goldberg’s
estate the value of any accrued but unused paid time off and the amount of any accrued but previously unpaid salary through
the date of death.

●

Disability – All salary, benefits and other payments shall cease at the time of termination due to disability, provided, however,
that the Company shall pay such other benefits required to be paid or provided to Dr. Goldberg under any plan, program,
policy, practice, contract, or arrangement in which Dr. Goldberg is eligible to receive such payments or benefits from the
Company, for the longer of 12 months or the full unexpired term of the employment agreement. In addition, the Company will
pay the balance of Dr. Goldberg’s regular salary not replaced by disability insurance coverage for six months following the
date of disability. The Company shall also pay to Dr. Goldberg the value of any accrued but unused paid time off and the
amount of any accrued but previously unpaid salary through the date of such termination.

● Without Cause or by Dr. Goldberg for Good Reason – The Company shall pay the value of any accrued but unused paid time
off, and the amount of all accrued but previously unpaid salary through the date of termination. In addition, the Company will
pay a severance equal to: (1) base salary in effect at the time of termination during the period of time from the date of
termination through the date that is 12 months following termination, plus an additional two months for every fully completed
year of employment (the “Severance Period”); (2) a bonus equal to one year of base salary in effect at the time of termination,
plus an additional two months of base salary for every fully completed year of employment; and (3) without duplication to (2),
the unpaid bonus, if any, for the year in which the termination occurs, prorated to the date of termination. The Company will
also pay such other benefits required to be paid or provided to Dr. Goldberg under any plan, program, policy, practice,
contract, or arrangement in which Dr. Goldberg is eligible to receive such payments or benefits from the Company, for the
duration of the Severance Period.

●

End of Term – The Company shall pay the value of any accrued but unused paid time off, and the amount of all accrued but
previously unpaid salary through the date of termination. In addition, the Company will pay a severance equal to: (1) base
salary in effect at the time of termination during the Severance Period; (2) a bonus equal to one year of base salary in effect at
the time of termination, plus an additional two months of base salary for every fully completed year of employment; and (3)
without duplication to (2), the unpaid bonus, if any, for the year in which the termination occurs, prorated to the date of
termination.

Change in Control – The Company will pay a severance equal to: (1) base salary in effect at the time of termination during the
Severance Period; (2) a bonus equal to one year of base salary in effect at the time of termination, plus an additional two
months of base salary for every fully completed year of employment and a bonus equal to the maximum allowable bonus in
effect at the time of termination, plus an additional two months of prorated bonus for every fully completed year of
employment; and (3) without duplication to (2), the unpaid bonus, if any, for the year in which the termination occurs, prorated
to the date of termination.

Although Dr. Goldberg's employment agreement expired on September 22, 2017, the terms of the agreement provide for continuation of
certain terms of the employment agreement as long as Dr. Goldberg continues to be an employee of the Company following expiration of
the agreement.

In connection with Dr. Goldberg’s appointment as Chief Executive Officer of the Company, the Board of Directors awarded options to
purchase 5,000,000 shares of our common stock to Dr. Goldberg, subject to stockholder approval of a new Stock Incentive Plan. If
approved, these stock options will vest 100% when the average closing price of the Company’s common stock over a period of five
consecutive trading days equals or exceeds $2.50 per share, and expire on the tenth anniversary of the date of grant. If a new Stock
Incentive Plan is not approved, the Company will be obligated to pay in cash the implied market value of the options at the time of
“exercise” by Dr. Goldberg, assuming the share price exceeds $2.50 and all other vesting conditions are met.

Frederick O. Cope, Ph.D. Dr. Cope was employed under a 24-month employment agreement effective through December 31, 2014. The
employment agreement provided for an annual base salary of $271,000. Effective May 1, 2013, Dr. Cope’s annual base salary was
increased to $279,130. For the calendar year ending December 31, 2017, the CNG Committee determined that the maximum bonus
payment to Dr. Cope would be $97,696. Although Dr. Cope's employment agreement expired on December 31, 2014, the terms of the
agreement provide for continuation of certain terms of the employment agreement as long as Dr. Cope continues to be an employee of the
Company following expiration of the agreement.

Dr. Cope’s employment agreement also provided for post-employment compensation based on the reason for termination:

●

For Cause – All salary, benefits and other payments shall cease at the time of termination, and the Company shall have no
further obligations to Dr. Cope.

Resignation – All salary, benefits and other payments shall cease at the time of resignation, and the Company shall have no
further obligations to Dr. Cope, except that the Company shall pay the value of any accrued but unused paid time off, and the
amount of all accrued but previously unpaid salary through the date of termination.

Death – All salary, benefits and other payments shall cease at the time of death, provided, however, that the Company shall
pay such health, dental and similar insurance or benefits as were provided to Dr. Cope immediately before his death for the
longer of 12 months or the full unexpired term of the employment agreement. The Company shall also pay to Dr. Cope’s
estate the value of any accrued but unused paid time off and the amount of any accrued but previously unpaid salary through
the date of death.

●

Disability – All salary, benefits and other payments shall cease at the time of termination due to disability, provided, however,
that the Company shall pay such health, dental and similar insurance or benefits as were provided to Dr. Cope immediately
before termination for the longer of 12 months or the full unexpired term of the employment agreement. In addition, the
Company will pay the balance of Dr. Cope’s regular salary not replaced by disability insurance coverage for six months
following the date of disability. The Company shall also pay to Dr. Cope the value of any accrued but unused paid time off
and the amount of any accrued but previously unpaid salary through the date of such termination.

● Without Cause – The Company shall pay the value of any accrued but unused paid time off, and the amount of all accrued but

previously unpaid salary through the date of termination. In addition, the Company will pay a severance equal to $245,000.
The Company will also pay health, dental and similar insurance or benefits as were provided to Dr. Cope immediately before
termination for the longer of 12 months or the full unexpired term of the employment agreement.

●

Change in Control – The Company shall pay the value of any accrued but unused paid time off, and the amount of all accrued
but previously unpaid salary through the date of termination. In addition, the Company will pay a severance equal to
$367,500. The Company will also pay health, dental and similar insurance or benefits as were provided to Dr. Cope
immediately before termination for the longer of 12 months or the full unexpired term of the employment agreement.

Jed A. Latkin. Mr. Latkin is employed under an annually renewing employment agreement. The employment agreement provides for an
annual base salary of $325,000. For the calendar year ending December 31, 2017, the CNG Committee determined that the maximum
bonus payment to Mr. Latkin would be $243,750.

Mr. Latkin’s employment agreement also provides for post-employment compensation based on the reason for termination:

●

For Cause – All salary, benefits and other payments shall cease at the time of termination, and the Company shall have no
further obligations to Mr. Latkin.

Resignation – All salary, benefits and other payments shall cease at the time of termination, and the Company shall have no
further obligations to Mr. Latkin, except that the Company shall pay the value of any accrued but unused paid time off, and the
amount of all accrued but previously unpaid salary through the date of termination.

Death – All salary, benefits and other payments shall cease at the time of death, provided, however, that the Company shall
pay such other benefits required to be paid or provided to Mr. Latkin’s estate under any plan, program, policy, practice,
contract, or arrangement in which Mr. Latkin is eligible to receive such payments or benefits from the Company, for the
longer of 12 months or the full unexpired term of the employment agreement. The Company shall also pay to Mr. Latkin’s
estate the value of any accrued but unused paid time off and the amount of any accrued but previously unpaid salary through
the date of death.

Disability – All salary, benefits and other payments shall cease at the time of termination due to disability, provided, however,
that the Company shall pay such other benefits required to be paid or provided to Mr. Latkin under any plan, program, policy,
practice, contract, or arrangement in which Mr. Latkin is eligible to receive such payments or benefits from the Company, for
the longer of 12 months or the full unexpired term of the employment agreement. In addition, the Company will pay the
balance of Mr. Latkin’s regular salary not replaced by disability insurance coverage for six months following the date of
disability. The Company shall also pay to Mr. Latkin the value of any accrued but unused paid time off and the amount of any
accrued but previously unpaid salary through the date of such termination.

● Without Cause or by Mr. Latkin for Good Reason – The Company shall pay the value of any accrued but unused paid time off,
and the amount of all accrued but previously unpaid salary through the date of termination. In addition, the Company will pay
a severance equal to base salary in effect at the time of termination during the period of time from the date of termination
through the date that is 12 months following termination, plus an additional two months for every fully completed year of
employment (the “Severance Period”). In addition, certain share options shall vest immediately and shall be exercisable for six
months following the termination. The Company will also pay such other benefits required to be paid or provided to Mr.
Latkin under any plan, program, policy, practice, contract, or arrangement in which Mr. Latkin is eligible to receive such
payments or benefits from the Company, for the duration of the Severance Period.

●

End of Term – The Company shall pay the value of any accrued but unused paid time off, and the amount of all accrued but
previously unpaid salary through the date of termination.

Report of Compensation, Nominating and Governance Committee

The CNG Committee is responsible for establishing, reviewing and approving the Company’s compensation philosophy and policies,
reviewing and making recommendations to the Board regarding forms of compensation provided to the Company’s directors and officers,
reviewing and determining cash and equity awards for the Company’s officers and other employees, and administering the Company’s
equity incentive plans.

In this context, the CNG Committee has reviewed and discussed with management the Compensation Discussion and Analysis included in
this annual report on Form 10-K. In reliance on the review and discussions referred to above, the CNG Committee recommended to the
Board, and the Board has approved, that the Compensation Discussion and Analysis be included in this annual report on Form 10-K for
filing with the SEC.

The Compensation, Nominating
and Governance Committee

Eric K. Rowinsky, M.D. (Chairman)
Mark I. Greene, M.D., Ph.D., FRCP
Y. Michael Rice

Compensation, Nominating and Governance Committee Interlocks and Insider Participation

The current members of our CNG Committee are: Eric K. Rowinsky, M.D. (Chairman), Mark I. Greene, M.D., Ph.D., FRCP, and Y.
Michael Rice. None of these individuals were at any time during the fiscal year ended December 31, 2017, or at any other time, an officer
or employee of the Company.

No director who served on the CNG Committee during 2017 had any relationships requiring disclosure by the Company under the SEC’s
rules requiring disclosure of certain relationships and related-party transactions. None of the Company’s executive officers served as a
director or a member of a compensation committee (or other committee serving an equivalent function) of any other entity, the executive
officers of which served as a director of the Company or member of the CNG Committee during 2017.

Summary Compensation Table

The following table sets forth certain information concerning the annual and long-term compensation of our Named Executive Officers for
the last three fiscal years.

Summary Compensation Table for Fiscal 2017

Named Executive
Officer
Michael M. Goldberg
(e)
President and
Chief Executive Officer

Frederick O. Cope,
Ph.D.
Senior Vice President
and
Chief Scientific Officer

Thomas J. Klima (f)
Senior Vice President
and
Chief Commercial
Officer

Jed A. Latkin (g)
Chief Operating Officer
and
Chief Financial Officer

William J. Regan (h)
Senior Vice President
and
Chief Compliance
Officer

Year

Salary

2017
2016
2015

427,222 $
83,077
—

2017

279,130 $

2016
2015

279,130
279,130

2017

66,635 $

270,000

(a)
Stock
Awards

(b)
Option
Awards

(d)
All Other
Compensation

Total
Compensation

— $
—
—

— $

—
—

— $

—

— $
—
—

410,768 $
—
—

8,067 $
436
—

846,057
83,513
—

— $

97,969 $

6,906 $

383,732

—
155,026

54,710
54,709

6,735
6,657

340,575
495,522

— $

66,635

—

52,920

2,326

325,246

270,000

192,900

112,163

52,921

3,114

631,098

2017

316,458 $

— $

125,833 $

366,653 $

5,429 $

814,373

2016
2015

163,309
—

2017

129,808 $

250,000

—
—

— $

—

39,992
—

—
—

203,301
—

— $

3,327 $

133,135

—

49,000

6,142

305,142

250,000

—

157,896

49,001

6,410

463,307

2016

2015

2016

2015

(a) Amount represents the aggregate grant date fair value of restricted shares in accordance with FASB ASC Topic 718. Assumptions
made in the valuation of stock awards are disclosed in Note 1(e) of the Notes to the Consolidated Financial Statements in this
Form 10-K.

(b) Amount represents the aggregate grant date fair value of stock options in accordance with FASB ASC Topic 718. Assumptions
made in the valuation of option awards are disclosed in Note 1(e) of the Notes to the Consolidated Financial Statements in this
Form 10-K.

(c) Amount represents the total non-equity incentive plan amounts which have been approved by the Board of Directors as of the

date this filing, and are disclosed for the year in which they were earned (i.e., the year to which the service relates).
● On April 25, 2017, the Board of Directors awarded a cash bonus to each of Dr. Goldberg and Mr. Latkin in recognition of the
successful closing of the Company’s sale of certain assets to Cardinal Health 414, LLC, which occurred on March 3, 2017.

● For fiscal 2017, the Board of Directors determined that fifty percent of the 2017 bonus amount payable would be paid in
stock in lieu of cash for all employees except Dr. Goldberg and Mr. Latkin, who will receive one hundred percent of their
bonuses in cash, to be paid following achievement of certain additional goals set by the Board. As such, Dr. Cope was
awarded 135,694 shares of common stock of the Company valued at $0.36 per share, the closing price of Navidea’s common
stock on February 20, 2018. Since these shares represent incentive compensation earned in 2017, they are reported in this
column, and not included in the column “Stock Awards.” Payment of the cash portion of the 2017 bonus awards has been
deferred until such time as the Company’s financial position allows a cash payment.

● For fiscal 2016, the Board of Directors determined that a portion of the 2016 bonus amount payable would be paid in stock in

lieu of cash. The portion of the 2016 bonus amount payable in cash is either fifty percent or thirty-three percent, as
determined by the Board of Directors. As such, Dr. Cope, Mr. Klima and Mr. Regan were awarded 70,492, 50,885 and
63,135, respectively, shares of common stock of the Company valued at $0.52 per share, the closing price of Navidea’s
common stock on February 6, 2017. Since these shares represent incentive compensation earned in 2016, they are reported in
this column, and not included in the column “Stock Awards.” The cash portion of the 2016 bonus awards was paid on March
15, 2017. The Board of Directors did not award bonuses to Dr. Goldberg and Mr. Latkin for 2016.

● For fiscal 2015, the Board of Directors initially determined that fifty percent of the 2015 bonus amount payable to certain

executive officers would be paid in stock options in lieu of cash, calculated based on the Black-Scholes value of the options
on the date of grant. As such, Dr. Cope, Mr. Klima, Mr. Larson and Mr. Regan were awarded, respectively, options to
purchase 58,510, 56,598, 54,501 and 52,405 shares of common stock of the Company at an exercise price of $0.98 per share,
vesting immediately upon the date of grant and expiring after ten years. Since these options represent incentive compensation
earned in 2015, they are reported in this column, and not included in the column “Option Awards.” In February 2017, the
Board of Directors determined that the amounts previously awarded as 2015 bonuses would be subject to the same split

between cash and stock as the 2016 bonus awards. As such, Dr. Cope and Mr. Regan were awarded an additional 17,886 and
16,020, respectively, shares of common stock of the Company valued at $0.52 per share, the closing price of Navidea’s
common stock on February 6, 2017. Since these shares represent incentive compensation earned in 2015, they are reported in
this column, and not included in the column “Stock Awards.” The cash portion of the 2015 bonus awards was paid on March
15, 2017.

(d) Amount represents additional compensation as disclosed in the All Other Compensation table below.
(e) Dr. Goldberg commenced employment with the Company effective September 22, 2016. In connection with Dr. Goldberg’s

appointment as Chief Executive Officer of the Company, the Board of Directors awarded options to purchase 5,000,000 shares of
our common stock to Dr. Goldberg, subject to stockholder approval of a new Stock Incentive Plan. If approved, these stock
options will vest 100% when the average closing price of the Company’s common stock over a period of five consecutive trading
days equals or exceeds $2.50 per share, and expire on the tenth anniversary of the date of grant. If the plan is not approved, the
Company will be obligated to pay the implied market value in cash.

(f) Mr. Klima separated from the Company effective March 8, 2017.
(g) Mr. Latkin commenced employment with the Company effective April 21, 2016.
(h) Mr. Regan separated from the Company effective June 30, 2017.

All Other Compensation

The following table describes each component of the amounts shown in the “All Other Compensation” column in the Summary
Compensation table above.

All Other Compensation Table for Fiscal 2017

Named Executive Officer
Michael M. Goldberg, M.D.

Frederick O. Cope, Ph.D.

Thomas J. Klima

Jed A. Latkin

William J. Regan

(a)
Reimbursement
of Additional
Tax Liability
Related to
Insurance
Premiums

(b)
401(k) Plan
Employer
Matching
Contribution

2,667 $
436
—

1,506 $
1,435
1,357

— $
2,316
1,310

29 $
—
—

54 $
106
110

5,400 $
—
—

5,400 $
5,300
5,300

— $
—
1,804

5,400 $
—
—

3,273 $
5,036
5,300

— $
—
—

— $
1,000
1,000

Year
2017
2016
2015

2017
2016
2015

Total
All Other

Compensation
8,067
436
—

6,906
6,735
6,657

—
2,326
3,114

5,429
—
—

3,327
6,142
6,410

(a) Amount represents reimbursement of the lost tax benefit due to the ineligibility of our Named Executive Officers to pay their

portion of medical, dental, and vision premiums on a pre-tax basis under our IRC Section 125 Plan.

(b) Amount represents the value of the common stock accrued for contribution to the Named Executive Officer’s account in our

401(k) Plan as calculated on a quarterly basis.

Chief Executive Officer Pay Ratio

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Item 402(u) of Regulation
S-K, we are providing the following information with respect to our last completed fiscal year. The pay ratio information provided below
is a reasonable estimate calculated in a manner consistent with applicable SEC rules.

For 2017, we calculated (i) the annual total compensation of our Chief Executive Officer, (ii) the median of the annual total compensation
of all of our employees other than the Chief Executive Officer, and (iii) the ratio of the annual total compensation of our Chief Executive
Officer to the median of the annual total compensation of all other employees, as follows:

● The annual total compensation of our CEO, as reported in the Summary Compensation Table, was $846,057;

● The median of the annual total compensation of all of our employees, excluding the Chief Executive Officer, was $79,921; and

● The ratio of the annual total compensation of our CEO to the median of the annual total compensation of all other employees

was 11 to 1.

In determining the pay ratio information provided above, we first identified our median employee for 2017 by using the following
methodology:

● We selected December 31, 2017 as the date upon which we would identify our median employee, and we compiled a list of

all full-time, part-time and temporary employees who were employed on that date.

● We used base pay as a consistently applied compensation measure to identify our median employee from the employees on the

list.

Once our median employee was identified in the manner described above, we calculated the annual total compensation of the median
employee using the same methodology that we used to determine the annual total compensation of the CEO, as reported in the Summary
Compensation Table.

Post-Employment Compensation

The following tables set forth the expected benefit to be received by each of our Named Executive Officers in the event of his termination
resulting from various scenarios, assuming a termination date of December 31, 2017 and a stock price of $0.36, our closing stock price on
December 29, 2017.

Michael M. Goldberg, M.D.

Cash payments:
Severance (a)
Disability supplement (b)
Paid time off (c)
2017 401(k) match (d)
Continuation of benefits (e)

Total

For Cause Resignation Death Disability

Without
Cause

End of
Term

Change in
Control

— $
—
7,692
5,400
—
13,092 $

— $
— 197,600
7,692
5,400
25,723

— $1,166,667 $1,166,667 $1,216,667
—
—
7,692
7,692
7,692
5,400
5,400
5,400
—
30,010
25,723
38,816 $ 236,416 $1,209,769 $1,179,759 $1,229,759

—
7,692
5,400
—

(a) Severance amounts are pursuant to Dr. Goldberg’s employment agreement.
(b) During the first 6 months of disability, the Company will supplement disability insurance payments to Dr. Goldberg to achieve

100% salary replacement. The Company’s short-term disability insurance policy currently pays $100 per week for a maximum of
24 weeks.

(c) Amount represents the value of 40 hours of accrued but unused vacation time as of December 31, 2017.
(d) Amount represents the value of 12,857 shares of Company stock which was accrued during 2017 as the Company’s 401(k)

matching contribution but was unissued as of December 31, 2017.

(e) Amount represents 12 months or 14 months, as applicable, of medical, dental and vision insurance premiums at rates in effect at

December 31, 2017.

(f) This table does not include 5,000,000 options which are subject to stockholder approval of a new Stock Incentive Plan. If the plan

is not approved, the Company will be obligated to pay the implied market value in cash.

Frederick O. Cope, Ph.D.

For Cause Resignation Death Disability

Without
Cause

End of
Term

Change in
Control

Cash payments:
Severance (a)
Disability supplement (b)
Paid time off (c)
2017 401(k) match (d)
Continuation of benefits (e)
Stock option vesting acceleration (f)
Total

— $
—
5,368
5,400
—
—
10,768 $

— $
— 137,165
5,368
5,400
17,607
—

— $ 245,000 $ 245,000 $ 367,500
—
5,368
5,400
17,607
—
28,375 $ 165,540 $ 273,375 $ 255,768 $ 395,875

—
5,368
5,400
17,607
—

—
5,368
5,400
—
—

5,368
5,400
17,607
—

(a) Severance amounts are pursuant to Dr. Cope’s employment agreement.
(b) During the first 6 months of disability, the Company will supplement disability insurance payments to Dr. Cope to achieve 100%
salary replacement. The Company’s short-term disability insurance policy currently pays $100 per week for a maximum of 24
weeks.

(c) Amount represents the value of 40 hours of accrued but unused vacation time as of December 31, 2017.
(d) Amount represents the value of 9,598 shares of Company stock which was accrued during 2017 as the Company’s 401(k)

matching contribution but was unissued as of December 31, 2017.

(e) Amount represents 12 months of medical, dental and vision insurance premiums at rates in effect at December 31, 2017.
(f) Pursuant to Dr. Cope’s stock option agreements, all unvested stock options outstanding will vest upon termination at the end of
the term of his employment agreement, termination without cause, or a change in control. Amount represents the value of the
stock at $0.36, the closing price of the Company’s stock on December 29, 2017, less the exercise price of the options. Amount
does not include stock options with an exercise price higher than $0.36, the closing price of the Company’s stock on December
29, 2017.

Jed A. Latkin

For Cause Resignation Death Disability

Without
Cause

End of
Term

Change in
Control

Cash payments:
Severance (a)
Disability supplement (b)
Paid time off (c)
2016 401(k) match (d)
Continuation of benefits (e)
Stock option vesting acceleration (f)
Total

— $
—
6,250
5,400
—
—
11,650 $

— $
— 160,100
6,250
5,400
500
—

— $ 379,167 $
—
6,250
5,400
500
—
12,150 $ 172,250 $ 391,316 $

6,250
5,400
500
—

— $ 988,542
—
—
6,250
6,250
5,400
5,400
—
—
—
—
11,650 $1,000,192

(a) Severance amounts are pursuant to Mr. Latkin’s employment agreement.
(b) During the first 6 months of disability, the Company will supplement disability insurance payments to Mr. Latkin to achieve

100% salary replacement. The Company’s short-term disability insurance policy currently pays $100 per week for a maximum of
24 weeks.

(c) Amount represents the value of 40 hours of accrued but unused vacation time as of December 31, 2017.
(d) Amount represents the value of 9,068 shares of Company stock which was accrued during 2017 as the Company’s 401(k)

matching contribution but was unissued as of December 31, 2017.

(e) Amount represents 12 months of dental insurance premiums at rates in effect at December 31, 2017.
(f) Pursuant to Mr. Latkin’s stock option agreements, all unvested stock options outstanding will vest upon termination without cause

or a change in control. Amount represents the value of the stock at $0.36, the closing price of the Company’s stock on December
29 2017, less the exercise price of the options. Amount does not include stock options with an exercise price higher than $0.36,
the closing price of the Company’s stock on December 29, 2017.

Tax Consequences

In structuring our executive compensation program, the CNG Committee takes into account the tax treatment of our compensation
arrangements. For example, the CNG Committee reviews and considers the deductibility of executive compensation under Section 162(m)
of the Internal Revenue Code (“Section 162(m)”). Section 162(m) generally provides that the Company may not deduct compensation
paid to a “covered employee” (generally our named executive officers serving on the last day of the year other than the chief financial
officer) to the extent it exceeds $1 million. Qualified performance-based compensation paid pursuant to shareholder approved plans is not
subject to the $1 million deduction limit, provided that certain requirements are satisfied.

In making compensation decisions in 2017 and prior years, the CNG Committee often sought to structure certain incentive awards with the
intention that they would be exempt from the $1 million deduction limit as “qualified performance-based compensation.” However, the
committee never adopted a policy that would have required all compensation to be deductible, because the committee wanted to preserve
the ability to pay compensation to our executives in appropriate circumstances, even if such compensation would not be deductible under
Section 162(m).

The Tax Cuts and Jobs Act, which was enacted on December 22, 2017, includes a number of significant changes to Section 162(m), such
as the repeal of the qualified performance-based compensation exemption and the expansion of the definition of “covered employees” (for
example, by including the chief financial officer and certain former named executive officers as covered employees).

As a result of these changes, except as otherwise provided in the transition relief provisions of the Tax Cuts and Jobs Act, compensation
paid to any of our covered employees generally will not be deductible in 2018 or future years, to the extent that it exceeds $1 million.

Grants of Plan-Based Awards

The following table sets forth certain information about plan-based awards that we made to the Named Executive Officers during fiscal
2017. For information about the plans under which these awards were granted, see the discussion under “Short-Term Incentive
Compensation” and “Long-Term Incentive Compensation” in the “Compensation Discussion and Analysis” section above.

Grants of Plan-Based Awards Table for Fiscal 2017

Estimated Future
Payouts Under
Non-Equity Incentive
Plan Awards (a)

Estimated Future
Payouts Under
Equity Incentive
Plan Awards

All
Other
Stock
Awards:
Number
of

All Other
Option
Awards:
Number of
Securities
Underlying

Grant
Date
Fair
Value
of
Stock
and
Option
Awards Awards

Exercise
Price of
Option

Named Executive Officer Grant Date Threshold Maximum Threshold Maximum of Stock Options
Michael M. Goldberg,
M.D.

— $ 300,000

N/A $

—

— $

— (a)

Frederick O. Cope, Ph.D.

N/A $

— $

97,696

Thomas J. Klima

N/A $

— $

—

Jed A. Latkin

N/A $
5/4/2017 $
5/4/2017 $
5/4/2017 $

— $ 243,750
—
— $
—
— $
—
— $

William J. Regan

N/A $

— $

—

—
—
—
—

—

— $

— (a)

—

— $

— (b)

—
—
—
—

— $
333,334 $
333,333 $
333,333 $

— $

— (a)
0.65 $ 43,533 (c)
0.75 $ 45,567 (d)
1.00 $ 36,733 (e)

—

— $

— (b)

(a) The threshold amount reflects the possibility that no cash bonus awards will be payable. The maximum amount reflects the cash

bonus awards payable if the Board of Directors, in their discretion, awards the maximum cash bonus.

(b) Mr. Klima and Mr. Regan separated from the Company during 2017, and as such will not receive a cash bonus related to fiscal

2017.

(c) These stock options vest when both of the following conditions have been met: May 4, 2017 and a closing market price of the

Company’s common stock of at least $0.85, and expire on the tenth anniversary of the date of grant.

(d) These stock options vest when both of the following conditions have been met: December 31, 2017 and a closing market price of

the Company’s common stock of at least $1.00, and expire on the tenth anniversary of the date of grant.

(e) These stock options vest when both of the following conditions have been met: December 31, 2018 and a closing market price of

the Company’s common stock of at least $1.25, and expire on the tenth anniversary of the date of grant.

Outstanding Equity Awards

The following table presents certain information concerning outstanding equity awards held by the Named Executive Officers as of
December 31, 2017.

Outstanding Equity Awards Table at Fiscal 2017 Year-End

Option Awards

Stock Awards

Named
Executive
Officer
Michael M.
Goldberg,
M.D.

Frederick O.
Cope, Ph.D.

Thomas J.
Klima (q)

Jed A.
Latkin

William J.
Regan (r)

Number of Securities
Underlying Unexercised
Options (#)

Exercisable Unexercisable

Option
Exercise
Price

Option
Expiration
Date

Note

—

5,000,000 $

1.00 9/22/2026

(m)

Market
Value of
Shares of

Number
of
Shares of
Stock
that
Have Not

Stock
that
Have
Not

Vested

Equity Incentive
Plan Awards

Market
Value
of
Unearned
Shares

Number of
Unearned
Shares

Note

50,000
75,000
120,000
127,000
145,000
99,750
108,000
58,510

45,000
20,000
—
—
—

20,000
84,000
100,000
63,750
18,750
110,000
52,405

— $
— $
— $
— $
— $
33,250 $
54,000 $
— $

0.65 2/16/2019
1.10 10/30/2019
1.90 12/21/2020
3.28 2/17/2022
3.08 2/15/2023
1.77 1/28/2024
1.65 3/26/2025
0.98 2/25/2026

— $
— $
333,334 $
333,333 $
333,333 $

1.50 4/20/2026
1.00 10/14/2026
5/4/2027
0.65
5/4/2027
0.75
5/4/2027
1.00

— $
— $
— $
21,250 $
6,250 $
55,000 $
— $

3.29
7/1/2021
3.28 2/17/2022
3.08 2/15/2023
1.77 1/28/2024
1.50 12/17/2024
1.65 3/26/2025
0.98 2/25/2026

(a)
(b)
(c)
(e)
(f)
(g)
(i)
(j)

(k)
(l)
(n)
(o)
(p)

(d)
(e)
(f)
(g)
(h)
(i)
(j)

(a) Options were granted 2/16/2009 and vested as to one-third on each of the first three anniversaries of the date of grant.
(b) Options were granted 10/30/2009 and vested as to one-third on each of the first three anniversaries of the date of grant.
(c) Options were granted 12/21/2010 and vested as to one-fourth on each of the first four anniversaries of the date of grant.
(d) Options were granted 7/1/2011 and vested as to one-fourth at the end of each of the first four quarters following the date of grant.
(e) Options were granted 2/17/2012 and vested as to one-fourth on each of the first four anniversaries of the date of grant.
(f) Options were granted 2/15/2013 and vested as to one-fourth on each of the first four anniversaries of the date of grant.
(g) Options were granted 1/28/2014 and vest as to one-fourth on each of the first four anniversaries of the date of grant.
(h) Options were granted 12/17/2014 and vest as to one-fourth on the date of grant, and one-fourth on January 28th of 2016, 2017 and

2018.

(i) Options were granted 3/26/2015 and vest as to one-third on each of the first three anniversaries of the date of grant.
(j) Options were granted 2/25/2016 and vested immediately. Options were granted in lieu of cash payment for a portion of the 2015
bonus payable to certain executive officers, calculated based on the Black-Scholes value of the options on the date of grant.
(k) Options were granted 4/20/2016 and vested as to one-sixth on the 20th day of each of the first six months following the date of

grant.

(l) Options were granted 10/14/2016 and vested as to one-half on the 20th day of each of the first two months following the date of

grant.

(m) Options were granted 9/22/2016 and vest 100% when the average closing price of the Company’s common stock over a period of
five consecutive trading days equals or exceeds $2.50 per share, subject to stockholder approval of a new Stock Incentive Plan.
(n) Options were granted 5/4/2017 and vest 100% when both of the following conditions have been met: May 4, 2017 and a closing

market price of the Company’s common stock of at least $0.85.

(o) Options were granted 5/4/2017 and vest 100% when both of the following conditions have been met: December 31, 2017 and a

closing market price of the Company’s common stock of at least $1.00.

(p) Options were granted 5/4/2017 and vest 100% when both of the following conditions have been met: December 31, 2018 and a

closing market price of the Company’s common stock of at least $1.25.

(q) Mr. Klima separated from the Company effective March 8, 2017. All of Mr. Klima’s unexercised stock options expired on June 6,

2017.

(r) Mr. Regan separated from the Company effective June 30, 2017. All of Mr. Regan’s stock options, if not exercised, will expire on

the earlier of ten years following the date of grant or June 30, 2022.

Options Exercised and Stock Vested

The following table presents, with respect to the Named Executive Officers, certain information about option exercises and restricted stock
vested during fiscal 2017.

Options Exercised and Stock Vested Table for Fiscal 2017

Named Executive Officer
Michael M. Goldberg, M.D.
Frederick O. Cope, Ph.D.
Thomas J. Klima
Jed A. Latkin
William J. Regan

Option Awards

Stock Awards

Number of
Shares
Acquired
on Exercise

Value
Realized on
Exercise (a)

Number of
Shares
Acquired
on Vesting

Value
Realized
on
Vesting (a)

— $
— $
— $
— $
— $

—
—
—
—
—

28,000 $
50,000 $
— $
— $
— $

12,572
25,450
—
—
—

Note
(b)
(c)

(a) Computed using the fair market value of the stock on the date prior to or the date of exercise or vesting, as appropriate, less the

purchase price of the stock, in accordance with our normal practice.

(b) On April 20, 2017, 28,000 shares of Dr. Goldberg’s restricted stock vested in accordance with the terms of his restricted stock
agreement. The market price on the last trading day prior to the vesting date was $0.45 per share. This restricted stock was
granted in connection with Dr. Goldberg’s service on the Company’s Board of Directors.

(c) On April 25, 2017, the CNG Committee vested 50,000 shares of Dr. Cope’s restricted stock upon determining that the vesting

event was unattainable due to changes in the Company’s development programs. The market price on the last trading day prior to
the vesting date was $0.46 per share.

Compensation of Non-Employee Directors

Each non-employee director received an annual cash retainer of $50,000 during the fiscal year ended December 31, 201 7. The Chairman
of the Company’s Board of Directors received an additional annual retainer of $30,000, the Chairman of the Audit Committee received an
additional annual retainer of $10,000, and the Chairman of the CNG Committee received an additional annual retainer of $7,500 for their
services in those capacities during 2017. We also reimbursed non-employee directors for travel expenses for meetings attended during
2017.

Each non-employee director also received 50,000 shares of restricted stock and 50,000 options to purchase stock at $0.75 per share during
2017 as a part of the Company’s annual stock incentive grants, in accordance with the provisions of the Navidea Biopharmaceuticals, Inc.
2014 Stock Incentive Plan. The restricted stock and stock options granted will vest on the first anniversary of the date of grant. In April
2017, the CNG Committee vested 17,000 shares of restricted stock held by Dr. Rowinsky after determining that the vesting events would
never occur due to changes in the Company’s development programs.

The aggregate number of equity awards outstanding at February 2 8, 2018 for each Director is set forth in the footnotes to the beneficial
ownership table provided in Part III, Item 12 of this Form 10-K. Directors who are also officers or employees of Navidea do not receive
any compensation for their services as directors.

The following table sets forth certain information concerning the compensation of non-employee Directors for the fiscal year ended
December 31, 2017.

Name
Anthony S. Fiorino, M.D., Ph.D. (f)
Mark I. Greene, M.D., Ph.D., FRCP
Y. Michael Rice
Eric K. Rowinsky, M.D.

(a)
Fees
Earned or
Paid in
Cash or Stock
$

39,375 $
53,064
62,500
90,000

(b),(c)
Option
Awards

(d),(e)
Stock
Awards

All Other

Compensation

12,793 $
12,793
12,793
12,793

25,450 $
25,450
25,450
25,450

Total
Compensation
77,618
91,307
100,743
128,243

— $
—
—
—

(a) Amount represents fees earned during the fiscal year ended December 31, 2017 (i.e., the year to which the service relates).
Quarterly retainers and meeting attendance fees are paid during the quarter following the quarter in which they are earned.

(b) Amount represents the aggregate grant date fair value in accordance with FASB ASC Topic 718.
(c) During the year ended December 31, 2017, the non-employee directors were issued an aggregate of 200,000 options to purchase
common stock which vest as to 100% of the shares on the first anniversary of the date of grant. At December 31, 2017, the non-
employee directors held an aggregate of 223,764 options to purchase common stock. Dr. Rowinsky held 123,764 options, and Dr.
Greene and Mr. Rice each held 50,000 options to purchase shares of common stock.

(d) Amount represents the aggregate grant date fair value in accordance with FASB ASC Topic 718.
(e) During the year ended December 31, 2017, the non-employee directors were issued an aggregate of 200,000 shares of restricted
stock which vest as to 100% of the shares on the first anniversary of the date of grant. At December 31, 2017, the non-employee
directors held an aggregate of 150,000 shares of unvested restricted stock. Drs. Greene and Rowinsky, and Mr. Rice, each held
50,000 shares of unvested restricted stock.

(f) Dr. Fiorino resigned from the Board of Directors effective October 9, 2017. His unvested stock options and restricted stock were

forfeited upon his resignation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Equity Compensation Plan Information

The following table sets forth additional information as of December 31, 2017, concerning shares of our common stock that may be issued
upon the exercise of options and other rights under our existing equity compensation plans and arrangements, divided between plans
approved by our stockholders and plans or arrangements not submitted to our stockholders for approval. The information includes the
number of shares covered by, and the weighted average exercise price of, outstanding options and other rights and the number of shares
remaining available for future grants excluding the shares to be issued upon exercise of outstanding options, warrants, and other rights.

(1)
Number of
Securities to
be
Issued Upon
Exercise of
Outstanding
Options,
Warrants
and Rights

(2)
Weighted-
Average
Exercise Price of
Outstanding
Options,
Warrants
and Rights

3,687,679 $

1.50

(3)
Number of
Securities
Remaining
Available
for Issuance
Under
Equity
Compensation
Plans
(Excluding
Securities
Reflected
in Column (1))
2,123,153

Plan Category
Equity compensation plans approved by security holders (a)

Equity compensation plans not approved by security holders (b)

—

Total

3,687,679 $

1.50

2,123,153

(a) Our stockholders ratified the 2014 Stock Incentive Plan (the “2014 Plan”) at the 2014 Annual Meeting of Stockholders held on
July 17, 2014. The total number of shares available for awards under the 2014 Plan shall not exceed 5,000,000 shares, plus any
shares subject to outstanding awards granted under prior plans and that expire or terminate for any reason. Although instruments
are still outstanding under the Fourth Amended and Restated 2002 Stock Incentive Plan (the “2002 Plan”), the plan has expired
and no new grants may be made from it. The total number of securities to be issued upon exercise of outstanding options includes
2,327,065 issued under the 2014 Plan and 1,360,614 issued under the 2002 Plan.

(b) In connection with Dr. Goldberg’s appointment as Chief Executive Officer of the Company on September 22, 2016, the Board of
Directors awarded options to purchase 5,000,000 shares of our common stock to Dr. Goldberg, subject to stockholder approval of
a new Stock Incentive Plan. If approved, these stock options will vest 100% when the average closing price of the Company’s
common stock over a period of five consecutive trading days equals or exceeds $2.50 per share, and expire on the tenth
anniversary of the date of grant.

Security Ownership of Principal Stockholders, Directors, Nominees and Executive Officers and Related Stockholder Matters

The following table sets forth, as of February 28, 2018, certain information with respect to the beneficial ownership of shares of our
common stock by: (i) each person known to us to be the beneficial owner of more than 5% of our outstanding shares of common stock,
(ii) each director or nominee for director of our Company, (iii) each of the Named Executive Officers (see “Executive Compensation –
Summary Compensation Table”), and (iv) our directors and executive officers as a group.

Beneficial Owner
Frederick O. Cope, Ph.D.
Michael M. Goldberg, M.D.
Mark I. Greene, M.D., Ph.D., FRCP
Thomas J. Klima
Jed A. Latkin
William J. Regan
Y. Michael Rice
Eric K. Rowinsky, M.D.
All directors and executive officers as a group (6 persons)
Cardinal Health, Inc.
Platinum-Montaur Life Sciences, LLC

Number of Shares
Beneficially Owned (*)
1,243,172
5,921,023
57,244
—
115,159
674,382
—
315,210

(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)

7,651,808 (i)(m)

10,000,000
16,262,120

(j)
(k)

Percent
of Class (**)

— (l)
3.6%
— (l)
— (l)
— (l)
— (l)
— (l)
— (l)
4.7%
6.1%
9.9%

(*) Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission which generally
attribute beneficial ownership of securities to persons who possess sole or shared voting power and/or investment power with
respect to those securities. Unless otherwise indicated, voting and investment power are exercised solely by the person named
above or shared with members of such person’s household.

(**)Percent of class is calculated on the basis of the number of shares outstanding on February 28, 2018, plus the number of shares

the person has the right to acquire within 60 days of February 28, 2018.

(a) This amount includes 870,510 shares issuable upon exercise of options which are exercisable within 60 days and 22,776 shares in

Dr. Cope’s account in the 401(k) Plan.

(b) This amount does not include 5,000,000 shares issuable upon exercise of options which are not exercisable within 60 days and are

subject to stockholder approval of a new Stock Incentive Plan.

(c) This amount does not include 100,000 shares of unvested restricted stock and 100,000 shares issuable upon exercise of options

which are not exercisable within 60 days.

(d) Mr. Klima separated from the Company effective March 8, 2017. All of Mr. Klima’s unexercised stock options expired on June 6,

2017.

(e) This amount includes 65,000 shares issuable upon exercise of options which are exercisable within 60 days, but does not include

1,000,000 shares issuable upon exercise of options which are not exercisable within 60 days.

(f) Mr. Regan separated from the Company effective June 30, 2017. This amount is based on Mr. Regan’s most recent SEC

ownership filings as well as the Company’s best knowledge and belief. This amount includes 531,405 shares issuable upon
exercise of options which are exercisable within 60 days and 13,822 shares in Mr. Regan’s account in the 401(k) Plan.

(g) This amount does not include 100,000 shares of unvested restricted stock and 100,000 shares issuable upon exercise of options

which are not exercisable within 60 days.

(h) This amount includes 73,764 shares issuable upon exercise of options which are exercisable within 60 days, but it does not
include 100,000 shares of unvested restricted stock and 100,000 shares issuable upon exercise of options which are not
exercisable within 60 days.

(i) This amount includes 1,009,274 shares issuable upon exercise of options which are exercisable within 60 days, and 22,776 shares
held in the 401(k) Plan on behalf of certain officers, but it does not include 300,000 shares of unvested restricted stock, 1,300,000
shares issuable upon the exercise of options which are not exercisable within 60 days, and 5,000,000 shares issuable upon the
exercise of options which are not exercisable within 60 days and are subject to stockholder approval of a new Stock Incentive
Plan. The Company’s Chief Operating Officer and Chief Financial Officer, Jed A. Latkin, is the trustee of the Navidea
Biopharmaceuticals, Inc. 401(k) Plan and may, as such, share investment power over common stock held in such plan. Mr. Latkin
disclaims any beneficial ownership of shares held by the 401(k) Plan. The 401(k) Plan holds an aggregate total of 143,219 shares
of common stock.

(j) The number of shares beneficially owned is based on a Schedule 13G filed by Cardinal Health, Inc. with the SEC on March 13,

2017. This amount includes 10,000,000 shares of common stock issuable upon exercise of Series NN warrants at an exercise price
of $1.50 per share. The address of Cardinal Health, Inc. is 7000 Cardinal Place, Dublin, OH 43017.

(k) The number of shares beneficially owned is based on a Schedule 13D/A filed by Platinum and certain of its affiliates with the

Securities and Exchange Commission on June 28, 2016. This amount includes (i) 13,964,519 shares of our common stock, and (ii)
2,297,601 shares of common stock issuable upon exercise of Series LL warrants (the “Series LL Warrants”) at an exercise price
of $0.01 per share. The Series LL Warrants provide that the holder may not exercise any portion of the warrants to the extent that
such exercise would result in the holder and its affiliates together beneficially owning more than 9.99% of the outstanding shares
of common stock, except on 61 days’ prior written notice to Navidea that the holder waives such limitation (the blocker).
Accordingly, this amount excludes 2,067,679 shares of common stock underlying the Series LL Warrants that are subject to the
blocker. The address of Platinum is c/o Otterbourg P.C., 230 Park Avenue, New York, NY 10169.

(l) Less than one percent.
(m) The address of all directors and executive officers is c/o Navidea Biopharmaceuticals, Inc., 4995 Bradenton Avenue, Suite 240,

Dublin, OH 43017.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Certain Relationships and Related Transactions

We adhere to our Code of Business Conduct and Ethics, which states that no director, officer or employee of Navidea should have any
personal interest that is incompatible with the loyalty and responsibility owed to our Company. We adopted a written policy regarding
related party transactions in December 2015. When considering whether to enter into or ratify a related party transaction, the Audit
Committee considers a variety of factors including, but not limited to, the nature and type of the proposed transaction, the potential value
of the proposed transaction, the impact on the actual or perceived independence of the related party and the potential value to the
Company of entering into such a transaction. All proposed transactions with a potential value of greater than $120,000 must be approved
or ratified by the Audit Committee.

SEC disclosure rules regarding transactions with related persons require the Company to provide information about transactions with
directors and executive officers as a related persons, even though they may not have been related persons at the time the Company entered
into the transactions described below.

Dr. Michael Goldberg, our President and Chief Executive Officer, previously managed a portfolio of funds for Platinum from May 2007
until December 2013. In 2011, he made an initial investment of $1.5 million in PPVA as a passive investor. Dr. Goldberg believes his
current investment balance is approximately $1.4 million after giving effect to prior redemptions and reinvestments. Dr. Goldberg was not
a member of the management of any of the Platinum entities; rather he solely had control over the trading activities of a portfolio of health
care investments from funds allocated to him from the Platinum funds. Dr. Goldberg was responsible for all investments made by Platinum
in the Company and for the trading in the Company’s securities up until he joined the Company’s Board of Directors in November 2013,
at which time he relinquished all control over the trading of the Company’s securities held by all of the Platinum entities. On December
13, 2013, Dr. Goldberg formally separated from Platinum and had no further role in managing their health care portfolio. As part of his
separation from Platinum, Dr. Goldberg entered into a settlement agreement, dated March 28, 2014, and amended on June 11, 2015, with
PPVA pursuant to which Dr. Goldberg was entitled to receive a beneficial ownership interest in 15% of (1) all securities held by Platinum
at the time of his separation from Platinum which included, without limitation, warrants to purchase the Company’s Common Stock, and
(2) the drawn amounts from the Platinum debt facility. In furtherance of the foregoing, on October 17, 2016, Platinum transferred warrants
to acquire an aggregate of 5,411,850 shares of our Common Stock to Dr. Goldberg, which warrants were exercised in full by Dr. Goldberg
on January 17, 2017 resulting in gross proceeds to the Company of $54,119.

If Dr. Goldberg is determined to be the owner of the remaining debt under the Platinum Loan Agreement, he has agreed to not require
repayment by the Company of any debt transferred to him until the original maturity date of September 30, 2021, and has agreed to release
any financial covenants and securitization requirements. Pursuant to a settlement agreement, dated as of June 16, 2016, among the
Company, PPVA, Platinum-Montaur and others, Platinum agreed to forgive interest owed on its credit facility with the Company in an
amount equal to 6%, effective July 1, 2016, making the effective annual interest rate on the Platinum debt 8.125% as of December 31,
2017.

Jed A. Latkin, our Chief Operating Officer and Chief Financial Officer, was an independent consultant that served as a portfolio manager
from 2011 through 2015 for two entities, namely Precious Capital and West Ventures, each of which were during that time owned and
controlled, respectively, by PPVA and PPCO. Mr. Latkin was party to a consulting agreement with each of Precious Capital and West
Ventures pursuant to which, as of April 2015, an aggregate of approximately $13 million was owed to him, which amount was never paid
and Mr. Latkin has no information as to the current value. Mr. Latkin’s consulting agreements were terminated upon his ceasing to be an
independent consultant in April 2015 with such entities. During his consultancy, Mr. Latkin was granted a .5% ownership interest in each
of Precious Capital and West Ventures, however, to his knowledge he no longer owns such interests. In addition, PPVA owes Mr. Latkin
$350,000 for unpaid consulting fees earned and expenses accrued in 2015 in respect of multiple consulting roles with them. Except as set
forth above, Mr. Latkin has no other past or present affiliations with Platinum.

Dr. Eric Rowinsky, our current Chairman, was recommended for appointment to the Company ’s Board of Directors by Dr. Goldberg at a
time when Dr. Goldberg was affiliated with Platinum and has, since that time, been elected by the Company’s stockholders to continue to
serve as an independent director. At no time has Dr. Rowinsky been affiliated, or in any way related to, any of the Platinum entities.

In March 2015, MT entered into an agreement to sell up to 50 shares of MT Preferred Stock and warrants to purchase up to 1,500 shares of
MT Common Stock to the MT Investors for a purchase price of $50,000 per share of MT Preferred Stock. On March 13, 2015, we
announced that definitive agreements with the MT Investors had been signed for the sale of the first tranche of 10 shares of MT Preferred
Stock and warrants to purchase 300 shares of MT Common Stock to the MT Investors, with gross proceeds to Macrophage Therapeutics of
$500,000. Under the agreement, 40% of the MT Preferred Stock and warrants are committed to be purchased by Dr. Goldberg, and the
balance by Platinum. The full 50 shares of MT Preferred Stock and warrants to be sold under the agreement are convertible into and
exercisable for MT Common Stock representing an aggregate 1% interest on a fully converted and exercised basis.

In addition, we entered into an exchange agreement with the MT Investors providing them an option to exchange their MT Preferred Stock
for our Common Stock in the event that MT has not completed a public offering with gross proceeds to MT of at least $50 million by the
second anniversary of the closing of the initial sale of MT Preferred Stock, at an exchange rate per share obtained by dividing $50,000 by
the greater of (i) 80% of the twenty-day volume weighted average price per share of our Common Stock on the second anniversary of the
initial closing or (ii) $3.00. To the extent that the MT Investors do not timely exercise their exchange right, we have the right to redeem
their MT Preferred Stock for a price equal to $58,320 per share. We also granted MT an exclusive license for potential therapeutic
applications of the Manocept technology.

During 2017, the largest aggregate amount of principal outstanding under the Platinum credit facility was $9.6 million, and as of
December 31, 2017, the amount of principal outstanding was $2.0 million.

Director Independence

Our Board of Directors has adopted the definition of “independence” as described under the Sarbanes-Oxley Act of 2002 (Sarbanes-
Oxley) Section 301, Rule 10A-3 under the Exchange Act and Section 803A of the NYSE American Company Guide. Our Board of
Directors has determined that Drs. Greene and Rowinsky, and Mr. Rice, meet the independence requirements. The Board had also
concluded that Anthony S. Fiorino, M.D., Ph.D. was independent during the time he served as a director until his departure in October
2017.

Item 14. Principal Accountant Fees and Services

Audit Fees. The aggregate fees billed and expected to be billed for professional services rendered by Marcum LLP, primarily related to the
audit of the Company’s annual consolidated financial statements for the 2017 fiscal year, the audit of the Company’s internal control over
financial reporting as of December 31, 2017, and the reviews of the financial statements included in the Company’s Quarterly Reports on
Form 10-Q for the 2017 fiscal year were $342,160 (including direct engagement expenses).

The aggregate fees billed and expected to be billed for professional services rendered by Marcum LLP, primarily related to the audit of the
Company’s annual consolidated financial statements for the 2016 fiscal year, the audit of the Company’s internal control over financial
reporting as of December 31, 2016, and the reviews of the financial statements included in the Company’s Quarterly Reports on Form 10-
Q for the 2016 fiscal year were $331,627 (including direct engagement expenses).

Audit-Related Fees. No fees were billed by Marcum LLP for audit-related services for the 2017 or 2016 fiscal years.

Tax Fees. No fees were billed by Marcum LLP for tax-related services for the 2017 or 2016 fiscal years.

All Other Fees. No fees were billed by Marcum LLP for services other than the audit, audit-related and tax services for the 2017 or 2016
fiscal years.

Pre-Approval Policy. The Audit Committee is required to pre-approve all auditing services and permitted non-audit services (including the
fees and terms thereof) to be performed for the Company by its independent auditor or other registered public accounting firm, subject to
the de minimis exceptions for permitted non-audit services described in Section 10A(i)(1)(B) of the Exchange Act that are approved by the
Audit Committee prior to completion of the audit. The Audit Committee, through the function of the Chairman, has given general pre-
approval for 100% of specified audit, audit-related, tax and other services.

PART IV

Item 15. Exhibits, Financial Statement Schedules

The following documents are filed as part of this report:

(1) The following Financial Statements are included in this Annual Report on Form 10-K on the pages indicated below:

Report of Independent Registered Public Accounting Firm – Marcum LLP

Report of Independent Registered Public Accounting Firm – BDO USA, LLP

Consolidated Balance Sheets as of December 31, 2017 and 2016

Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015

Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2017, 2016 and 2015

Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015

Notes to the Consolidated Financial Statements

(2) Financial statement schedules have been omitted because either they are not required or are not applicable or because the

information required to be set forth therein is not material.

F-2

F-3

F-4

F-5

F-7

F-9

F-10

(3) Exhibits:

Exhibit
Number Exhibit Description

3.1

3.2

4.1

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

10.10

Amended and Restated Certificate of Incorporation of Navidea Biopharmaceuticals, Inc., as corrected February 18, 1994, and
amended June 27, 1994, July 25, 1995, June 3, 1996, March 17, 1999, May 9, 2000, June 13, 2003, July 29, 2004, June 22,
2005, November 20, 2006, December 26, 2007, April 30, 2009, July 27, 2009, August 2, 2010, January 5, 2012, June 26, 2013
and August 18, 2016) (filed as Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed March 31, 2017, and
incorporated therein by reference).

Amended and Restated By-Laws dated July 21, 1993, as amended July 18, 1995, May 30, 1996, July 26, 2007, and November
7, 2013 (filed as Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q filed November 12, 2013, and incorporated
herein by reference).

Amended and Restated Certificate of Designations, Voting Powers, Preferences, Limitations, Restrictions, and Relative Rights
of Series B Cumulative Convertible Preferred Stock (incorporated by reference to Exhibit 4.1 to the Company’s Current Report
on Form 8-K filed June 26, 2013).

Supply and Distribution Agreement, dated November 15, 2007, between the Company and Cardinal Health 414, LLC (portions
of this Exhibit have been omitted pursuant to a request for confidential treatment and have been filed separately with the
Commission) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 21,
2007).

Manufacture and Supply Agreement, dated November 30, 2009, between the Company and Reliable Biopharmaceutical
Corporation (portions of this Exhibit have been omitted pursuant to a request for confidential treatment and have been filed
separately with the Commission) (incorporated by reference to Exhibit 10.1 to the Company’s June 30, 2010 Form 10-Q).

Asset Purchase Agreement, dated May 24, 2011, between Devicor Medical Products, Inc. and the Company (portions of this
Exhibit have been omitted pursuant to a request for confidential treatment and have been filed separately with the SEC)
(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed July 19, 2011).

License Agreement, dated December 9, 2011, between AstraZeneca AB and the Company (portions of this Exhibit have been
omitted pursuant to a request for confidential treatment and have been filed separately with the U.S. Securities and Exchange
Commission) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed April 11,
2012).

Loan Agreement, dated July 25, 2012, between the Company and Platinum-Montaur Life Sciences LLC (incorporated by
reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 31, 2012).

Promissory Note, dated July 25, 2012, made by Navidea Biopharmaceuticals, Inc. in favor of Platinum-Montaur Life Sciences
LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed July 31, 2012).

Form of Employment Agreement between the Company and each of Dr. Frederick O. Cope and Mr. Brent L. Larson. This
agreement is one of two substantially identical employment agreements and is accompanied by a schedule which identifies
material details in which each individual agreement differs from the form filed herewith (incorporated by reference to Exhibit
10.1 to the Company’s Current Report on Form 8-K filed January 7, 2013). ^

Schedule identifying material differences between the employment agreements incorporated by reference as Exhibit 10.4 to this
Annual Report on Form 10-K (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed
January 7, 2013). ^

Amendment to Loan Agreement, dated June 25, 2013, between Navidea Biopharmaceuticals, Inc. and Platinum-Montaur Life
Sciences LLC (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed June 28, 2013).

Amended and Restated Promissory Note, dated June 25, 2013, made by Navidea Biopharmaceuticals, Inc. in favor of Platinum-
Montaur Life Sciences LLC (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed
June 28, 2013).

Exhibit
Number Exhibit Description
10.11

Series HH Warrant to purchase common stock of Navidea Biopharmaceuticals, Inc. issued to GE Capital Equity Investments,
Inc., dated June 25, 2013 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed June
28, 2013).

10.12

10.13

10.14

10.15

10.16

10.17

Series HH Warrant to purchase common stock of Navidea Biopharmaceuticals, Inc. issued to MidCap Financial SBIC, LP,
dated June 25, 2013 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed June 28,
2013).

Office Lease, dated August 29, 2013, by and between Navidea Biopharmaceuticals, Inc. and BRE/COH OH LLC (portions of
this Exhibit have been omitted pursuant to a request for confidential treatment and have been filed separately with the U.S.
Securities and Exchange Commission) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-
K filed September 5, 2013).

Manufacturing Services Agreement, dated September 9, 2013, by and between Navidea Biopharmaceuticals, Inc. and OSO
BioPharmaceuticals Manufacturing, LLC (portions of this Exhibit have been omitted pursuant to a request for confidential
treatment and have been filed separately with the U.S. Securities and Exchange Commission) (incorporated by reference to
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 12, 2013).

Director Agreement, dated November 13, 2013, by and between Navidea Biopharmaceuticals, Inc. and Michael M. Goldberg,
M.D. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 19, 2013).

Second Amendment to Loan Agreement, dated March 4, 2014, between Navidea Biopharmaceuticals, Inc. and Platinum-
Montaur Life Sciences LLC (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed
March 7, 2014).

Second Amended and Restated Promissory Note, dated March 4, 2014, made by Navidea Biopharmaceuticals, Inc. in favor of
Platinum-Montaur Life Sciences LLC (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-
K filed March 7, 2014).

10.18

Form of Series KK Warrants to purchase common stock of Navidea Biopharmaceuticals, Inc. issued to Oxford Finance LLC on
March 4, 2014 (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed March 7, 2014).

10.19

10.20

10.21

10.22

10.23

10.24

10.25

Amended and Restated License Agreement, dated July 14, 2014, between the Company and the Regents of the University of
California (portions of this Exhibit have been omitted pursuant to a request for confidential treatment and have been filed
separately with the U.S. Securities and Exchange Commission) (incorporated by reference to Exhibit 10.1 to the Company’s
Quarterly Report on Form 10-Q filed August 11, 2014).

Termination of License Agreement, dated July 14, 2014, between the Company and the Regents of the University of California
(incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed August 11, 2014).

License Agreement, dated July 14, 2014, between the Company and the Regents of the University of California (portions of
this Exhibit have been omitted pursuant to a request for confidential treatment and have been filed separately with the U.S.
Securities and Exchange Commission) (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form
10-Q filed August 11, 2014).

Navidea Biopharmaceuticals, Inc. 2014 Stock Incentive Plan, adopted July 17, 2014 and amended March 3, 2015 (incorporated
by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed May 11, 2015). ^

Form of Stock Option Agreement under the Navidea Biopharmaceuticals, Inc. 2014 Stock Incentive Plan (incorporated by
reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed November 10, 2014). ^

Form of Restricted Stock Award and Agreement under the Navidea Biopharmaceuticals, Inc. 2014 Stock Incentive Plan
(incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed November 10, 2014). ^

Employment Agreement, dated October 13, 2014, between Navidea Biopharmaceuticals, Inc. and Ricardo J. Gonzalez
(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 15, 2014). ^

10.26

Stock Option Agreement, dated October 13, 2014, between Navidea Biopharmaceuticals, Inc. and Ricardo J. Gonzalez
(incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed October 15, 2014). ^

Exhibit
Number Exhibit Description
10.27

Securities Exchange Agreement, dated November 12, 2014, by and between Navidea Biopharmaceuticals, Inc. and Platinum
Partners Value Arbitrage Fund, L.P. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
filed November 13, 2014).

10.28

10.29

10.30

10.31

10.32

10.33

10.34

10.35

10.36

10.37

10.38

10.39

10.40

10.41

Employment Agreement between the Company and Thomas J. Klima, dated January 1, 2015 (incorporated by reference to
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed August 10, 2015).^

Employment Agreement between the Company and Michael Tomblyn, M.D., dated January 1, 2015 (incorporated by reference
to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed August 10, 2015).^

Securities Exchange Agreement dated as of March 11, 2015 among Macrophage Therapeutics, Inc., Platinum-Montaur Life
Sciences, LLC and Michael Goldberg, M.D. (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on
Form 10-Q filed May 11, 2015).

Navidea Biopharmaceuticals, Inc. 2015 Cash Bonus Plan adopted March 26, 2015 (incorporated by reference to the Company’s
Current Report on Form 8-K filed April 1, 2015). ^

Termination Agreement, dated April 21, 2015, by and between Navidea Biopharmaceuticals, Inc. and Alseres Pharmaceuticals,
Inc. (portions of this Exhibit have been omitted pursuant to a request for confidential treatment and have been filed separately
with the U.S. Securities and Exchange Commission) (incorporated by reference to Exhibit 10.1 to the Company’s Current
Report on Form 8-K filed April 27, 2015).

Term Loan Agreement, dated as of May 8, 2015, by and among Navidea Biopharmaceuticals, Inc., as borrower, Macrophage
Therapeutics, Inc. as guarantor, and Capital Royalty Partners II L.P., Capital Royalty Partners II – Parallel Fund “A” L.P. and
Parallel Investment Opportunities Partners II L.P., as lenders (incorporated by reference to Exhibit 10.1 to the Company’s
Current Report on Form 8-K/A filed October 9, 2015).

Security Agreement, dated as of May 15, 2015 among Navidea Biopharmaceuticals, Inc., as borrower, Macrophage
Therapeutics, Inc. as guarantor, and Capital Royalty Partners II L.P., Capital Royalty Partners II – Parallel Fund “A” L.P. and
Parallel Investment Opportunities Partners II L.P., as lenders, and Capital Royalty Partners II L.P., as control agent
(incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed May 15, 2015).

Subordination Agreement, dated as of May 8, 2015, among Platinum-Montaur Life Sciences, LLC, as subordinated creditor,
Capital Royalty Partners II L.P., Capital Royalty Partners II – Parallel Fund “A” L.P. and Parallel Investment Opportunities
Partners II L.P., as senior creditors, and Capital Royalty Partners II L.P., as senior creditor agent, and consented to by Navidea
Biopharmaceuticals, Inc. as borrower (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K
filed May 15, 2015).

Third Amendment to Loan Agreement, dated as of May 8, 2015, by and between Navidea Biopharmaceuticals, Inc, as
borrower, and Platinum-Montaur Life Sciences, LLC, as lender (incorporated by reference to Exhibit 10.4 to the Company’s
Current Report on Form 8-K filed May 15, 2015).

Third Amended and Restated Promissory Note, dated May 8, 2015, made by Navidea Biopharmaceuticals, Inc. in favor of
Platinum-Montaur Life Sciences LLC (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-
K filed May 15, 2015).

Securities Exchange Agreement, dated as of August 20, 2015, among the Company, Montsant Partners LLC and Platinum
Partners Value Arbitrage Fund, L.P. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
filed August 26, 2015).

Form of Series LL Warrant issued to Montsant Partners LLC and Platinum Partners Value Arbitrage Fund, L.P. (incorporated
by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed August 26, 2015).

Amendment 1 to Term Loan Agreement by and among Navidea Biopharmaceuticals, Inc., as borrower, and Capital Royalty
Partners II L.P., Capital Royalty Partners II – Parallel Fund “A” L.P. and Parallel Investment Opportunities Partners II L.P., as
lenders, dated as of December 23, 2015 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form
8-K filed January 11, 2016).

Agreement dated as of March 14, 2016 by and among the Company, Platinum Partners Value Arbitrage Fund L.P., Platinum
Partners Liquid Opportunity Master Fund L.P., Platinum-Montaur Life Sciences, LLC, Platinum Management (NY) LLC,
Platinum Liquid Opportunity Management (NY) LLC and Mark Nordlicht (incorporated by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed March 18, 2016).

Exhibit
Number Exhibit Description
10.42

Director Agreement, dated March 15, 2016, by and between Navidea Biopharmaceuticals, Inc. and Mark I. Greene, M.D.,
Ph.D., FRCP (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 29, 2016).

10.43

10.44

10.45

10.46

10.47

10.48

10.49

10.50

10.51

10.52

10.53

Director Agreement, dated March 17, 2016, by and between Navidea Biopharmaceuticals, Inc. and Anthony S. Fiorino, M.D.,
Ph.D. (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed March 29, 2016).

Form of Director Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed
May 10, 2016).

Employment Agreement, dated May 9, 2016 and effective as of April 21, 2016, between Navidea Biopharmaceuticals, Inc. and
Jed A. Latkin (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed May 10,
2016). ^

Settlement Agreement, dated June 16, 2016, by and among Navidea Biopharmaceuticals, Inc., Platinum Partners Value
Arbitrage Fund, L.P. and Platinum-Montaur Life Sciences, LLC, Cody Christopherson, and Hunter & Kmiec (incorporated by
reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed June 29, 2016).

Employment Agreement, dated September 22, 2016, between Navidea Biopharmaceuticals, Inc. and Michael M. Goldberg,
M.D. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 27, 2016). ^

Asset Purchase Agreement, dated November 23, 2016, between Navidea Biopharmaceuticals, Inc. and Cardinal Health 414,
LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 30, 2016).

Global Settlement Agreement dated March 3, 2017 by and among Navidea Biopharmaceuticals, Inc., Cardinal Health 414,
LLC, Macrophage Therapeutics, Inc., Capital Royalty Partners II L.P., Capital Royalty Partners II (Cayman), L.P., Capital
Royalty Partners II – Parallel Fund “A” L.P., Parallel Investment Opportunities Partners II L.P. and Capital Royalty Partners II
– Parallel Fund “B” (Cayman) L.P. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
filed March 8, 2017).

License-Back Agreement, dated March 3, 2017, between Navidea Biopharmaceuticals, Inc. and Cardinal Health 414, LLC
(incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed March 8, 2017).

Warrant, dated March 3, 2017, issued to Cardinal Health 414, LLC (incorporated by reference to Exhibit 10.4 to the Company’s
Current Report on Form 8-K filed March 8, 2017).

Warrant, dated March 3, 2017, issued to The Regents of the University of California (San Diego) (incorporated by reference to
Exhibit 10.5 to the Company’s Current Report on Form 8-K filed March 8, 2017).

Amended and Restated License Agreement, dated March 3, 2017, between Navidea Biopharmaceuticals, Inc. and The Regents
of the University of California (San Diego) (portions of this Exhibit have been omitted pursuant to a request for confidential
treatment and have been filed separately with the Securities and Exchange Commission) (incorporated by reference to Exhibit
10.6 to the Company’s Current Report on Form 8-K filed March 8, 2017).

10.54

Employment Agreement, dated May 4, 2017, between Navidea Biopharmaceuticals, Inc. and Jed A. Latkin (incorporated by
reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q filed May 10, 2017).^

21.1

Subsidiaries of the registrant.*

23.1

Consent of Marcum LLP.*

23.2

Consent of BDO USA, LLP.*

24.1

Power of Attorney.*

31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

32.1

Certification of Chief Executive Officer of Periodic Financial Reports pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, 18 U.S.C. Section 1350.*

Exhibit
Number Exhibit Description
32.2

Certification of Chief Financial Officer of Periodic Financial Reports pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, 18 U.S.C. Section 1350.*

101.INS XBRL Instance Document *

101.SCH XBRL Taxonomy Extension Schema Document *

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document *

101.DEF XBRL Taxonomy Extension Definition Linkbase Document *

101.LAB XBRL Taxonomy Extension Label Linkbase Document *

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document *

^
*

Management contract or compensatory plan or arrangement.
Filed herewith.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

Dated: March 15, 2018

SIGNATURES

NAVIDEA BIOPHARMACEUTICALS, INC.
(the Company)

By:/s/ Michael M. Goldberg
Michael M. Goldberg, M.D.

President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.

Signature

Title

Date

/s/ Michael M. Goldberg
Michael M. Goldberg, M.D.

/s/ Jed A. Latkin*
Jed A. Latkin

/s/ Eric K. Rowinsky*
Eric K. Rowinsky, M.D.

Director, President and
Chief Executive Officer
(principal executive officer)

Chief Operating Officer and
Chief Financial Officer
(principal financial officer and
principal accounting officer)

Chairman, Director

Claudine E. Bruck, Ph.D.

/s/ Mark I. Greene*
Mark I. Greene, M.D., Ph.D., FRCP

/s/ Y. Michael Rice*
Y. Michael Rice

Director

*By: /s/ Michael M. Goldberg

Michael M. Goldberg, M.D., Attorney-in-fact

March 15, 2018

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

NAVIDEA BIOPHARMACEUTICALS, INC.

FORM 10-K ANNUAL REPORT

As of December 31, 2017 and 2016
and for Each of the
Three Years in the Period Ended
December 31, 2017

FINANCIAL STATEMENTS

NAVIDEA BIOPHARMACEUTICALS, INC. and SUBSIDIARIES

Index to Financial Statements

Consolidated Financial Statements of Navidea Biopharmaceuticals, Inc.

Report of Independent Registered Public Accounting Firm – Marcum LLP

Report of Independent Registered Public Accounting Firm – BDO USA, LLP

Consolidated Balance Sheets as of December 31, 2017 and 2016

Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2017, 2016 and 2015

Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2017, 2016 and 2015

Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015

Notes to the Consolidated Financial Statements

F-1

F-2

F-3

F-4

F-5

F-6

F-7

F-9

F-10

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of
Navidea Biopharmaceuticals, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Navidea Biopharmaceuticals, Inc. (the “Company”) as of December
31, 2017 and 2016, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity (deficit) and
cash flows for each of the two years in the period ended December 31, 2017 and the related notes (collectively referred to as the
“financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the two years in the period
ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
("PCAOB"), the Company's internal control over financial reporting as of December 31, 2017, based on the criteria established in
Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”)
in 2013 and our report, dated March 15, 2018, expressed an unqualified opinion on the effectiveness of the Company’s internal control
over financial reporting.

The financial statements of Navidea Biopharmaceuticals, Inc. as of and for the year ended December 31, 2015, were audited by other
auditors whose report dated March 23, 2016 expressed an unmodified opinion on those financial statements. As discussed in Notes 1 and
3 to the December 31, 2017 financial statements, on March 3, 2017, the Company completed its sale of certain assets to Cardinal Health
414, LLC. The Company has adjusted its 2016 and 2015 financial statements to retrospectively apply discontinued operations reporting
related to the sale of certain assets to Cardinal Health 414, LLC that occurred in 2017. The other auditors reported on the 2015 financial
statements before the retrospective adjustment.

As part of our audits of the 2017 and 2016 financial statements, we also audited the adjustments to the 2015 financial statements to
retroactively apply discontinued operations reporting related to the sale of certain assets to Cardinal Health 414, LLC that occurred in
2017 as described in Notes 1 and 3. In our opinion, such adjustments are appropriate and have been properly applied. We were not
engaged to audit, review or apply any procedures to Navidea Biopharmaceuticals Inc.’s 2015 financial statements other than with
respect to the discontinued operations treatment and, accordingly, we do not express an opinion or any other form of assurance on the
2015 financial statements as a whole.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the
Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that
our audits provide a reasonable basis for our opinion.

/s/ Marcum LLP

We have served as the Company ’s auditor since 2016.

New Haven, CT
March 15, 2018

F-2

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders
Navidea Biopharmaceuticals, Inc.
Dublin, Ohio

We have audited, before the effects of the retrospective adjustments for the discontinued operations described in Note 3 to the
consolidated financial statements, the accompanying consolidated statements of operations, comprehensive income (loss), stockholders’
deficit, and cash flows of Navidea Biopharmaceuticals, Inc. for the year ended December 31, 2015 (the 2015 financial statements before
the effects of the retrospective adjustments discussed in Note 3 to the consolidated financial statements are not presented herein). These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above, before the effects of the retrospective adjustments for the
discontinued operations described in Note 3 to the consolidated financial statements, present fairly, in all material respects, the results of
operations and cash flows of Navidea Biopharmaceuticals, Inc. for the year ended December 31, 2015, in conformity with accounting
principles generally accepted in the United States of America.

We were not engaged to audit, review, or apply any procedures to the retrospective adjustments for the discontinued operations described
in Note 3 to the consolidated financial statements and, accordingly, we do not express an opinion or any other form of assurance about
whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by Marcum LLP.

/s/ BDO USA, LLP

Chicago, Illinois
March 23, 2016

F-3

Navidea Biopharmaceuticals, Inc. and Subsidiaries
Consolidated Balance Sheets

ASSETS
Current assets:

Cash and cash equivalents
Restricted cash
Available-for-sale securities
Accounts and other receivables
Inventory, net
Prepaid expenses and other
Assets associated with discontinued operations, current

Total current assets
Property and equipment

Less accumulated depreciation and amortization

Property and equipment, net

Patents, trademarks and license agreements

Less accumulated amortization

Patents, trademarks and license agreements, net

Guaranteed earnout receivable
Other assets
Assets associated with discontinued operations

Total assets

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:

Accounts payable
Accrued liabilities and other
Notes payable, current
Terminated lease liability, current
Accrued loss contingency
Liabilities associated with discontinued operations, current

Total current liabilities

Notes payable
Terminated lease liability
Other liabilities

Total liabilities

Commitments and contingencies (Note 16)
Stockholders’ equity (deficit):

Preferred stock; $.001 par value; 5,000,000 shares authorized; no shares issued or outstanding

at December 31, 2017 and 2016

Common stock; $.001 par value; 300,000,000 shares authorized; 162,206,646 and 155,762,729

shares issued and outstanding at December 31, 2017 and 2016, respectively

Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive loss

Total Navidea stockholders' equity (deficit)

Noncontrolling interest

Total stockholders’ equity (deficit)

Total liabilities and stockholders’ equity (deficit)

See accompanying notes to consolidated financial statements.

F-4

December 31,
2017

December 31,
2016

2,795,006 $
—
1,797,604
8,137,872
—
1,101,923
—
13,832,405
1,206,058
969,357
236,701
480,404
22,248
458,156
4,809,376
1,444,798
—
20,781,436 $

855,043 $
1,857,848
2,353,639
107,215
2,887,566
7,092
8,068,403
—
588,092
76,611

1,539,325
5,001,253
—
203,016
96,208
842,220
3,144,247
10,826,269
3,232,372
2,051,787
1,180,585
146,685
—
146,685
—
202,882
105,255
12,461,676

5,165,385
7,872,893
51,957,913
—
—
4,865,597
69,861,788
9,641,179
—
624,922

8,733,106

80,127,889

—

162,207
331,128,787
(319,908,968)
(2,396)
11,379,630
668,700
12,048,330
20,781,436 $

155,763
326,564,148
(394,855,034)
—
(68,135,123)
468,910
(67,666,213)
12,461,676

Navidea Biopharmaceuticals, Inc. and Subsidiaries
Consolidated Statements of Operations

Revenue:

Tc99m tilmanocept sales revenue
Tc99m tilmanocept license revenue
Tc99m tilmanocept royalty revenue
Grant and other revenue

Total revenue
Cost of goods sold
Gross profit
Operating expenses:

Research and development
Selling, general and administrative

Total operating expenses

Loss from operations
Other income (expense):

Interest income (expense), net
Equity in loss of R-NAV, LLC
Loss on disposal of investment in R-NAV, LLC
Change in fair value of financial instruments
Loss on extinguishment of debt
Other, net

Total other income (expense), net

Loss before income taxes
Benefit from income taxes
Loss from continuing operations
Discontinued operations, net of tax effect:

Loss from discontinued operations
Gain on sale
Net income (loss)
Less loss attributable to noncontrolling interest
Deemed dividend on beneficial conversion feature of MT Preferred Stock
Net income (loss) attributable to common stockholders
Income (loss) per common share (basic):

Continuing operations
Discontinued operations
Attributable to common stockholders

Weighted average shares outstanding (basic)
Income (loss) per common share (diluted):

Continuing operations
Discontinued operations
Attributable to common stockholders

Weighted average shares outstanding (diluted)

Years Ended December 31,
2016

2017

2015

— $
100,000
9,126
1,701,311
1,810,437
3,651
1,806,786

4,513,842
11,169,951
15,683,793
(13,877,007)

168,971
—
—
153,357
(4,201,668)
(33,339)
(3,912,679)
(17,789,686)
4,062,489
(13,727,197)

39,601 $
1,795,625
—
3,136,408
4,971,634
62,260
4,909,374

7,138,080
7,920,036
15,058,116
(10,148,742)

(4,866)
(15,159)
(39,732)
2,858,524
—
(27,919)
2,770,848
(7,377,894)
—
(7,377,894)

(490,758)
89,163,811
74,945,856
(210)
—
74,946,066 $

(6,931,137)
—
(14,309,031)
(648)
—
(14,308,383) $

(0.08) $
0.55 $
0.47 $
161,592,569

(0.05) $
(0.04) $
(0.09) $
155,422,384

(0.08) $
0.53 $
0.45 $
166,016,458

(0.05) $
(0.04) $
(0.09) $
155,422,384

19,075
1,133,333
—
1,860,953
3,013,361
3,226
3,010,135

10,562,729
10,888,146
21,450,875
(18,440,740)

(1,269,916)
(305,253)
—
(614,782)
(2,440,714)
26,808
(4,603,857)
(23,044,597)
—
(23,044,597)

(4,518,938)
—
(27,563,535)
(855)
(46,000)
(27,608,680)

(0.15)
(0.03)
(0.18)
151,180,222

$
$
$

See accompanying notes to consolidated financial statements.

F-5

Navidea Biopharmaceuticals, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss)

Net income (loss)
Unrealized loss on available-for-sale securities
Comprehensive income (loss)

Years Ended December 31,
2016
(14,309,031) $
—
(14,309,031) $

2017
74,945,856 $
(2,396)
74,943,460 $

2015
(27,563,535)
—
(27,563,535)

F-6

Navidea Biopharmaceuticals, Inc. and Subsidiaries
Consolidated Statements of Stockholders’ Equity (Deficit)

Preferred Stock Common Stock
Shares Amount

Additional
Paid-In
Amount Capital

Accumulated
Deficit

Accumulated
Other
Compre-hensive
Loss

Non-
controlling

Interest

Total
Stockholders'
Equity
(Deficit)

Balance,
January 1,
2015
Issued stock

4,519 $

4 150,200,259 $150,200 $323,030,301 $(352,983,971) $

1 $

— $ (29,803,466)

upon
exercise of
stock
options, net —

—

124,238

124

54,206

—

54,330

Issued
restricted
stock
Canceled

forfeited
restricted
stock
Canceled

—

354,000

354

—

354

—

(158,000)

(158)

158

—

stock to pay
employee
tax
obligations —

—

(7,645)

(7)

(12,607)

—

(12,614)

Issued stock
in payment
of Board
retainers
Issued stock
to 401(k)
plan
Exchanged
Series B
Preferred
Stock for
warrants
Extension of
warrant
expiration
date
Issued

warrants in
connection
with
advisory
services
agreement
Issued stock

upon
exercise of
warrants

Stock
compensation
expense
Net loss
Issuance of

MT
Preferred
Stock, net
of deemed
dividend

Balance,
December
31, 2015
Issued
restricted

—

90,977

172,878

—

172,969

—

68,157

117,031

—

117,099

(4,519)

(4)

—

149,615

—

149,615

—

256,450

—

256,450

—

4,977,679

4,978

(4,978)

—

—
—

2,368,685
—

—
(27,562,680)

—
(855)

2,368,685
(27,563,535)

—

(46,000)

—

470,413

424,413

—

— 155,649,665 155,650 326,085,743 (380,546,651)

469,558

(53,835,700)

stock
Canceled
forfeited
restricted
stock
Issued stock
in payment
of Board
retainers
Issued stock
to 401(k)
Plan
Issued stock

—

168,000

168

—

168

—

(256,000)

(256)

228

—

(28)

—

84,062

66,455

—

66,539

—

67,002

120,733

—

120,800

upon
exercise of
stock
options, net —

—

50,000

13,450

—

13,500

Stock
compensation
expense
Net loss
Balance,
December
31, 2016

—
—

277,539
—

—
(14,308,383)

—
(648)

277,539
(14,309,031)

—

— 155,762,729 155,763 326,564,148 (394,855,034)

468,910

(67,666,213)

Continued on next page.

F-7

Navidea Biopharmaceuticals, Inc. and Subsidiaries
Consolidated Statements of Stockholders’ Equity (Deficit), continued

Preferred Stock Common Stock
Shares Amount

Additional
Paid-In
Amount Capital

Accumulated
Other
Compre-
hensive
Loss

Non-
controlling

Interest

Total
Stockholders'
Equity
(Deficit)

Accumulated
Deficit

Balance,

December 31,
2016

—

— 155,762,729 155,763 326,564,148 (394,855,034)

—

468,910

(67,666,213)

Issued stock in
payment of
Board retainers —

—

16,406

10,483

—

10,500

Issued stock in
payment of
employee
bonuses

Issued stock upon

exercise of
warrants

—

710,353

710

368,632

—

369,342

—

5,411,850

5,412

48,707

—

54,119

Issued warrants in
connection with
Asset Sale
Issued warrants

—

3,337,187

—

3,337,187

for extension of
license
agreement
Issued stock to
401(k) plan
Issued restricted
stock
Canceled

—

333,719

—

105,308

105

53,602

—

200,000

200

—

333,719

—

53,707

200

forfeited
restricted stock —

—

(50,000)

(50)

—

Issued stock upon

exercise of
stock options

Stock

compensation
expense

Comprehensive
income (loss):
Net income
Unrealized loss
on available-
for-sale
securities

Total

comprehensive
income

Reclassification

of funds
invested (Note
10)
Balance,

December 31,
2017

—

50,000

18,050

—

18,100

—

394,209

—

394,209

—

74,946,066

—

(210)

74,945,856

—

(2,396)

—

(2,396)

—

74,943,460

—

200,000

— $

— 162,206,646 $162,207 $331,128,787 $(319,908,968) $

(2,396) $ 668,700 $ 12,048,330

See accompanying notes to consolidated financial statements.

F-8

Navidea Biopharmaceuticals, Inc. and Subsidiaries
Consolidated Statements of Cash Flows

Cash flows from operating activities:

Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by (used

in) operating activities:

Depreciation and amortization of property and equipment
Amortization of patents, trademarks and license agreements
Loss on disposal and abandonment of assets
Gain on forgiveness of accounts payable
Change in inventory reserve
Amortization of debt discount and issuance costs
Debt discount and issuance costs written off
Prepayment premium and debt collection fees related to long term debt
Compounded interest on long term debt
Stock compensation expense
Equity in loss of R-NAV, LLC
Loss on disposal of investment in R-NAV, LLC

Change in fair value of financial instruments
Loss on extinguishment of debt
Issued warrants in connection with Asset Sale
Extension of warrant expiration date
Issued warrants in connection with advisory services agreement
Value of stock issued to directors
Value of stock issued to employees
Value of stock issued to 401(k) plan for employer matching contributions
Other
Changes in operating assets and liabilities:

Accounts and other receivables
Inventory
Prepaid expenses and other assets
Accounts payable
Accrued liabilities and other liabilities
Deferred revenue

Net cash provided by (used in) operating activities

Cash flows from investing activities:

Purchases of available-for-sale securities
Maturities of available-for-sale securities
Purchases of equipment
Proceeds from sales of equipment
Patent and trademark costs
Payments on disposal of investment in R-NAV, LLC
Proceeds from disposal of investment in R-NAV, LLC

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuance of MT Preferred Stock and warrants
Payment of preferred stock issuance costs
Proceeds from issuance of common stock, net
Payment of tax withholdings related to stock-based compensation
Proceeds from notes payable
Payment of debt-related costs
Principal payments on notes payable
Restricted cash held for payment against debt
Payments under capital leases

Net cash (used in) provided by financing activities

Net increase (decrease) in cash
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period

Year Ended December 31,
2016

2017

2015

74,945,856 $

(14,309,031) $

(27,563,535)

232,339
22,248
807,241
(212,656)
—
—
—
—
265,196
394,209
—
—
(153,357)

4,201,668
3,337,187
—
—
10,500
369,342
53,707
65

(11,145,238)
1,470,826
(934,536)
(6,017,775)
(6,248,179)
(2,315,037)
59,083,606

(2,200,000)
400,000
(33,690)
—
—
—
—
(1,833,690)

—
—
72,419
—
—
(1,314,102)
(59,753,740)
5,001,188
—
(55,994,235)
1,255,681
1,539,325
2,795,006 $

496,178
5,191
136,719
(85,355)
43,354
77,964
1,955,541
2,923,271
1,561,568
277,539
15,159
39,732
(2,858,524)

—
—
—
—
66,539
—
120,800
(15,159)

1,882,855
(861,274)
187,379
5,441,155
5,351,090
1,104,089
3,556,780

—
—
(1,847)
45,000
—
(110,000)
27,623
(39,224)

—
—
13,640
—
—
(3,923,271)
(231,453)
(5,001,253)
(2,154)
(9,144,491)
(5,626,935)
7,166,260
1,539,325 $

562,468
8,951
33,184
—
143,493
492,963
—
—
2,048,960
2,368,685
305,253
—
614,782

2,440,714
—
149,615
256,450
172,969
—
117,099
(63,677)

(2,808,696)
135,986
263,915
290,024
(282,642)
1,237,009
(19,076,030)

—
—
(39,001)
38,265
(27,092)
—
—
(27,828)

500,000
(12,587)
65,975
(23,906)
54,500,000
(3,902,487)
(30,333,333)
—
(2,550)
20,791,112
1,687,254
5,479,006
7,166,260

See accompanying notes to consolidated financial statements.

F-9

Notes to the Consolidated Financial Statements

1. Organization and Summary of Significant Accounting Policies

a. Organization and Nature of Operations: Navidea Biopharmaceuticals, Inc. (“Navidea,” the “Company,” or “we”), a Delaware
Corporation (NYSE American: NAVB), is a biopharmaceutical company focused on the development and commercialization of
precision immunodiagnostic agents and immunotherapeutics. Navidea is developing multiple precision-targeted products based
on our Manocept™ platform to help identify the sites and pathways of undetected disease and enable better diagnostic accuracy,
clinical decision-making, targeted treatment and, ultimately, patient care.

Navidea’s Manocept platform is predicated on the ability to specifically target the CD206 mannose receptor expressed on
activated macrophages. The Manocept platform serves as the molecular backbone of Lymphoseek® (technetium Tc99m
tilmanocept) injection, the first product developed and commercialized by Navidea based on the platform. Building on the
success of Tc99m tilmanocept, the flexible and versatile Manocept platform acts as an engine for the design of purpose-built
molecules offering the potential to be utilized across a range of diagnostic modalities, including single photon emission computed
tomography (“SPECT”), positron emission tomography (“PET”), intra-operative and/or optical-fluorescence detection in a
variety of disease states.

On March 3, 2017, pursuant to an Asset Purchase Agreement dated November 23, 2016, (the “Purchase Agreement”), the
Company completed its previously announced sale to Cardinal Health 414, LLC (“Cardinal Health 414”) of its assets used, held
for use, or intended to be used in operating its business of developing, manufacturing and commercializing a product used for
lymphatic mapping, lymph node biopsy, and the diagnosis of metastatic spread to lymph nodes for staging of cancer (the
“Business”), including the Company’s radioactive diagnostic agent marketed under the Lymphoseek® trademark for current
approved indications by the U.S. Food and Drug Administration (“FDA”) and similar indications approved by the FDA in the
future (the “Product”), in Canada, Mexico and the United States (the “Territory”) (giving effect to the License-Back described
below and excluding certain assets specifically retained by the Company) (the “Asset Sale”). Such assets sold in the Asset Sale
consist primarily of, without limitation, (i) intellectual property used in or reasonably necessary for the conduct of the Business,
(ii) inventory of, and customer, distribution, and product manufacturing agreements related to, the Business, (iii) all product
registrations related to the Product, including the new drug application approved by the FDA for the Product and all regulatory
submissions in the United States that have been made with respect to the Product and all Health Canada regulatory submissions
and, in each case, all files and records related thereto, (iv) all related clinical trials and clinical trial authorizations and all files and
records related thereto, and (v) all right, title and interest in and to the Product, as specified in the Purchase Agreement (the
“Acquired Assets”).

Our consolidated balance sheets and statements of operations have been reclassified, as required, for all periods presented to
reflect the Business as a discontinued operation. Cash flows associated with the operation of the Business have been combined
with operating, investing and financing cash flows, as appropriate, in our consolidated statements of cash flows.

Other than Tc99m tilmanocept, which the Company has a license to distribute outside of Canada, Mexico and the United States,
none of the Company’s drug product candidates have been approved for sale in any market.

In January 2015, Macrophage Therapeutics, Inc. (“MT”), a majority-owned subsidiary, was formed specifically to explore
immuno-therapeutic applications for the Manocept platform.

From our inception through August 2011, we manufactured a line of gamma radiation detection medical devices called the
neoprobe® GDS system (the “GDS Business”). We sold the GDS Business to Devicor Medical Products, Inc. (“Devicor”) in
August 2011. In exchange for the assets of the GDS Business, Devicor made net cash payments to us totaling $30.3 million,
assumed certain liabilities of the Company associated with the GDS Business, and agreed to make royalty payments to us of up to
an aggregate maximum amount of $20 million based on the net revenue attributable to the GDS Business through 2017. Based on
the 2015 GDS Business revenue, we recorded income of $759,000, net of taxes, in 2015 related to royalty amounts earned based
on 2015 GDS Business revenue. The royalty amount of $1.2 million was offset by $436,000 in estimated taxes which were
allocated to discontinued operations, but were fully offset by the tax benefit from our net operating loss for 2015. We did not earn
or receive any such royalty payments prior to 2015 or in 2016 and 2017.

In July 2011, we established a European business unit, Navidea Biopharmaceuticals Limited, to address international
development and commercialization needs for our technologies, including Tc99m tilmanocept. Navidea owns 100% of the
outstanding shares of Navidea Biopharmaceuticals Limited.

F-10

In December 2001, we acquired Cardiosonix Ltd. (“Cardiosonix”), an Israeli company with a blood flow measurement device
product line in the early stages of commercialization. In August 2009, the Company’s Board of Directors decided to discontinue
the operations and attempt to sell Cardiosonix. However, we were obligated to continue to service and support the Cardiosonix
devices through 2013. The Company did not receive significant expressions of interest in the Cardiosonix business and it was
legally dissolved in September 2017.

b. Principles of Consolidation: Our consolidated financial statements include the accounts of Navidea and our wholly-owned

subsidiaries, Navidea Biopharmaceuticals Limited and Cardiosonix Ltd, as well as those of our majority-owned subsidiary, MT.
All significant inter-company accounts were eliminated in consolidation. Prior to termination of Navidea’s joint venture with R-
NAV, LLC (“R-NAV”) in May 2016, Navidea's investment in R-NAV was being accounted for using the equity method of
accounting and was therefore not consolidated. See Note 11.

c. Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the

United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ from those estimates.

d. Financial Instruments and Fair Value: In accordance with current accounting standards, the fair value hierarchy prioritizes
the inputs to valuation techniques used to measure fair value, giving the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3
measurements). The three levels of the fair value hierarchy are described below:

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted
assets or liabilities;

Level 2 – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable,
either directly or indirectly; and

Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair
value measurement. In determining the appropriate levels, we perform a detailed analysis of the assets and liabilities whose fair
value is measured on a recurring basis. At each reporting period, all assets and liabilities for which the fair value measurement is
based on significant unobservable inputs or instruments which trade infrequently and therefore have little or no price transparency
are classified as Level 3. See Note 4.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

(1) Cash, restricted cash, available-for-sale securities, accounts and other receivables, and accounts payable: The carrying
amounts approximate fair value because of the short maturity of these instruments. At December 31, 2016, restricted cash
represents the balance in an account that was under the control of Capital Royalty Partners II L.P. (“CRG”). See Note 13. At
December 31, 2017 and 2016, approximately $96,000 and $894,000, respectively, of accounts payable was being disputed
by the Company related to unauthorized expenditures by a former executive, which were incurred during the year ended
December 31, 2016.

(2) Notes payable: The carrying value of our debt at December 31, 2017 and 2016 primarily consists of the face amount of the
notes less unamortized discounts. At December 31, 2017 and 2016, the conversion option of certain notes payable was
required to be recorded at fair value. The estimated fair value of the conversion option was calculated using a Monte Carlo
simulation. This valuation method includes Level 3 inputs such as the estimated current market interest rate for similar
instruments with similar creditworthiness. Unrealized gains and losses on the fair value of the conversion option are
classified in other expenses as a change in the fair value of financial instruments in the consolidated statements of
operations. At December 31, 2017, the fair value of the conversion option is approximately zero. At December 31, 2017,
the fair value of our notes payable was approximately $2.4 million, equal to the carrying value of $2.4 million. At
December 31, 2016, the fair value of our notes payable was approximately $61.6 million, equal to the carrying value of
$61.6 million. See Notes 4 and 13.

(3) Derivative liabilities: Derivative liabilities are related to certain outstanding warrants which are recorded at fair value.
Derivative liabilities totaling $63,000 as of December 31, 2017 and 2016 were included in other liabilities on the
consolidated balance sheets. The assumptions used to calculate fair value as of December 31, 2017 and 2016 included
volatility, a risk-free rate and expected dividends. In addition, we considered non-performance risk and determined that
such risk is minimal. Unrealized gains and losses on the derivatives are classified in other expenses as a change in the fair
value of financial instruments in the statements of operations. See Note 4.

F-11

(4) Warrants: In March 2017, in connection with the Asset Sale, the Company granted to each of Cardinal Health 414 and the
University of California, San Diego, (“UCSD”), a five-year warrant to purchase up to 10 million shares and 1 million
shares, respectively, of the Company’s common stock at an exercise price of $1.50 per share, each of which warrant is
subject to anti-dilution and other customary terms and conditions (the “Series NN warrants”). The assumptions used to
calculate fair value at the date of issuance included volatility, a risk-free rate and expected dividends. The Series NN
warrants granted to Cardinal Health 414 had an estimated fair value of $3.3 million, which was recorded as a reduction of
the gain on sale in the consolidated statement of operations for the year ended December 31, 2017. The Series NN warrants
granted to UCSD had an estimated fair value of $334,000, which was recorded as an intangible asset related to the UCSD
license in the consolidated balance sheet during the year ended December 31, 2017. See Note 18.

e. Stock-Based Compensation: At December 31, 2017, we had instruments outstanding under two stock-based compensation
plans; the Fourth Amended and Restated 2002 Stock Incentive Plan (the “2002 Plan”) and the 2014 Stock Incentive Plan (the
“2014 Plan”). Currently, under the 2014 Plan, we may grant incentive stock options, nonqualified stock options, and restricted
stock awards to full-time employees and directors, and nonqualified stock options and restricted stock awards may be granted to
our consultants and agents. Total shares authorized under each plan are 12 million shares and 5 million shares, respectively.
Although instruments are still outstanding under the 2002 Plan, the plan has expired and no new grants may be made from it.
Under both plans, the exercise price of each option is greater than or equal to the closing market price of our common stock on
the date of the grant.

Stock options granted under the 2002 Plan and the 2014 Plan generally vest on an annual basis over one to four years. Outstanding
stock options under the plans, if not exercised, generally expire ten years from their date of grant or up to 90 days following the
date of an optionee’s separation from employment with the Company. We issue new shares of our common stock upon exercise
of stock options.

In September 2016, the Board of Directors approved a new Stock Incentive Plan (the “New Plan”), authorizing a total of 10
million shares. The New Plan has not yet been approved by Navidea’s stockholders. In connection with Dr. Goldberg’s
appointment as Chief Executive Officer of the Company in September 2016, the Board of Directors awarded options to purchase
5,000,000 shares of our common stock to Dr. Goldberg, subject to stockholder approval of the New Plan. If approved, these stock
options will vest 100% when the average closing price of the Company’s common stock over a period of five consecutive trading
days equals or exceeds $2.50 per share, and expire on the tenth anniversary of the date of grant.

Stock-based payments to employees and directors, including grants of stock options, are recognized in the consolidated statement
of operations based on their estimated fair values. The fair value of each stock option award is estimated on the date of grant
using the Black-Scholes option pricing model. Expected volatilities are based on the Company’s historical volatility, which
management believes represents the most accurate basis for estimating expected future volatility under the current circumstances.
Navidea uses historical data to estimate forfeiture rates. The expected term of stock options granted is based on the vesting period
and the contractual life of the options. The risk-free rate is based on the U.S. Treasury yield in effect at the time of the grant. The
assumptions used to calculate the fair value of stock option awards granted during the years ended December 31, 2017, 2016 and
2015 are noted in the following table:

Expected volatility
Weighted-average volatility
Expected dividends
Expected term (in years)
Risk-free rate

2017

2016
66% - 79% 59% - 75% 61% - 64%
60%
—
- 6.0

75%
—
5.0 - 6.0

62%
—
5.1 - 6.3

5.0

2015

1.8% - 2.1% 1.2% - 1.8% 1.5% - 1.9%

The portion of the fair value of stock-based awards that is ultimately expected to vest is recognized as compensation expense
over either (1) the requisite service period or (2) the estimated performance period. Restricted stock awards are valued based on
the closing stock price on the date of grant and amortized ratably over the estimated life of the award. Restricted stock may vest
based on the passage of time, or upon occurrence of a specific event or achievement of goals as defined in the grant agreements.
In such cases, we record compensation expense related to grants of restricted stock based on management’s estimates of the
probable dates of the vesting events. Stock-based awards that do not vest because the requisite service period is not met prior to
termination result in reversal of previously recognized compensation cost. See Note 5.

f. Cash and Cash Equivalents: Cash equivalents are highly liquid instruments such as U.S. Treasury bills, bank certificates of
deposit, corporate commercial paper and money market funds which have maturities of less than 3 months from the date of
purchase.

F-12

g. Accounts and Other Receivables: Accounts and other receivables are recorded net of an allowance for doubtful accounts. We
estimate an allowance for doubtful accounts based on a review and assessment of specific accounts and other receivables and
write off accounts when deemed uncollectible. See Note 7.

Inventory: All components of inventory are valued at the lower of cost (first-in, first-out) or net realizable value. We adjust
inventory to net realizable value when the net realizable value is lower than the carrying cost of the inventory. Net realizable
value is determined based on estimated sales activity and margins. We estimate a reserve for obsolete inventory based on
management’s judgment of probable future commercial use, which is based on an analysis of current inventory levels, estimated
future sales and production rates, and estimated shelf lives. See Note 8.

Property and Equipment: Property and equipment are stated at cost, less accumulated depreciation and amortization.
Depreciation is generally computed using the straight-line method over the estimated useful lives of the depreciable assets.
Depreciation and amortization related to equipment under capital leases and leasehold improvements is recognized over the
shorter of the estimated useful life of the leased asset or the term of the lease. Maintenance and repairs are charged to expense as
incurred, while renewals and improvements are capitalized. See Note 9.

Intangible Assets: Intangible assets consist primarily of patents and trademarks. Intangible assets are stated at cost, less
accumulated amortization. Patent costs are amortized using the straight-line method over the estimated useful lives of the
patents of approximately 5 to 15 years. Patent application costs are deferred pending the outcome of patent applications. Costs
associated with unsuccessful patent applications and abandoned intellectual property are expensed when determined to have no
recoverable value. We evaluate the potential alternative uses of all intangible assets, as well as the recoverability of the carrying
values of intangible assets, on a recurring basis.

Impairment or Disposal of Long-Lived Assets: Long-lived assets and certain identifiable intangibles are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future
undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment
recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. No
impairment was recognized during the years ended December 31, 2017, 2016 or 2015. Assets to be disposed of are reported at
the lower of the carrying amount or fair value less costs to sell.

l. Leases: Leases are categorized as either operating or capital leases at inception. Operating lease costs are recognized on a
straight-line basis over the term of the lease. An asset and a corresponding liability for the capital lease obligation are
established for the cost of capital leases. The capital lease obligation is amortized over the life of the lease. For build-to-suit
leases, the Company establishes an asset and liability for the estimated construction costs incurred to the extent that it is
involved in the construction of structural improvements or takes construction risk prior to the commencement of the lease. Upon
occupancy of facilities under build-to-suit leases, the Company assesses whether these arrangements qualify for sales
recognition under the sale-leaseback accounting guidance. If a lease does not meet the criteria to qualify for a sale-leaseback
transaction, the established asset and liability remain on the Company's balance sheet. See Note 15.

m. Derivative Instruments: Derivative instruments embedded in contracts, to the extent not already a free-standing contract, are

bifurcated from the debt instrument and accounted for separately. All derivatives are recorded on the consolidated balance sheet
at fair value in accordance with current accounting guidelines for such complex financial instruments. Derivative liabilities with
expiration dates within one year are classified as current, while those with expiration dates in more than one year are classified
as long term. We do not use derivative instruments for hedging of market risks or for trading or speculative purposes.

n. Revenue Recognition: Prior to the Asset Sale to Cardinal Health 414 in March 2017, we generated revenue primarily from sales
of Lymphoseek. Our standard shipping terms are free on board (FOB) shipping point, and title and risk of loss passes to the
customer upon delivery to a carrier for shipment. We generally recognize sales revenue related to sales of our products when the
products are shipped. Our customers have no right to return products purchased in the ordinary course of business, however, we
may allow returns in certain circumstances based on specific agreements.

We earned additional revenues based on a percentage of the actual net revenues achieved by Cardinal Health 414 on sales to end
customers made during each fiscal year. The amount we charged Cardinal Health 414 related to end customer sales of
Lymphoseek was subject to a retroactive annual adjustment. To the extent that we could reasonably estimate the end-customer
prices received by Cardinal Health 414, we recorded sales based upon these estimates at the time of sale. If we were unable to
reasonably estimate end customer sales prices related to products sold, we recorded revenue related to these product sales at the
minimum (i.e., floor) price provided for under our distribution agreement with Cardinal Health 414. During the years ended
December 31, 2016 and 2015, approximately 99% of Lymphoseek sales were made to Cardinal Health 414.

F-13

We currently generate revenue primarily from grants to support various product development initiatives. We generally recognize
grant revenue when expenses reimbursable under the grants have been paid and payments under the grants become contractually
due.

We also earn revenues related to our licensing and distribution agreements. The terms of these agreements may include payment
to us of non-refundable upfront license fees, funding or reimbursement of research and development efforts, milestone payments
if specified objectives are achieved, and/or royalties on product sales. We evaluate all deliverables within an arrangement to
determine whether or not they provide value on a stand-alone basis. We recognize a contingent milestone payment as revenue in
its entirety upon our achievement of a substantive milestone if the consideration earned from the achievement of the milestone (i)
is consistent with performance required to achieve the milestone or the increase in value to the delivered item, (ii) relates solely to
past performance and (iii) is reasonable relative to all of the other deliverables and payments within the arrangement. We
received a non-refundable upfront cash payment of $2.0 million from SpePharm AG upon execution of the SpePharm License
Agreement in March 2015. We determined that the license and other non-contingent deliverables did not have stand-alone value
because the license could not be deemed to be fully delivered for its intended purpose unless we performed our other obligations,
including specified development work. Accordingly, they did not meet the separation criteria, resulting in these deliverables being
considered a single unit of account. As a result, revenue relating to the upfront cash payment was deferred and was being
recognized on a straight-line basis over the estimated obligation period of two years. However, the remaining deferred revenue of
$417,000 was recognized upon obtaining European approval of a reduced-mass vial in September 2016, several months earlier
than originally anticipated.

Lastly, we recognized revenues from the provision of services to R-NAV and its subsidiaries through the termination of the R-
NAV joint venture on May 31, 2016. See Note 11.

o. Research and Development Costs: Research and development (“R&D”) expenses include both internal R&D activities and

external contracted services. Internal R&D activity expenses include salaries, benefits, and stock-based compensation, as well as
travel, supplies, and other costs to support our R&D staff. External contracted services include clinical trial activities,
manufacturing and control-related activities, and regulatory costs. R&D expenses are charged to operations as incurred. We
review and accrue R&D expenses based on services performed and rely upon estimates of those costs applicable to the stage of
completion of each project.

Income Taxes: Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date. Due to the uncertainty surrounding the realization of the
deferred tax assets in future tax returns, all of the deferred tax assets have been fully offset by a valuation allowance at
December 31, 2017 and 2016.

Current accounting standards include guidance on the accounting for uncertainty in income taxes recognized in the financial
statements. Such standards also prescribe a recognition threshold and measurement model for the financial statement recognition
of a tax position taken, or expected to be taken, and provides guidance on derecognition, classification, interest and penalties,
accounting in interim periods, disclosure and transition. The Company believes that the ultimate deductibility of all tax positions
is highly certain, although there is uncertainty about the timing of such deductibility. As a result, no liability for uncertain tax
positions was recorded as of December 31, 2017 or 2016 and we do not expect any significant changes in the next twelve months.
Should we need to accrue interest or penalties on uncertain tax positions, we would recognize the interest as interest expense and
the penalties as a selling, general and administrative expense. As of December 31, 2017, tax years 2014-2017 remained subject to
examination by federal and state tax authorities. See Note 20.

q. Recent Accounting Standards: In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting

Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes existing
revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is that a company should recognize
revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the
company expects to be entitled in exchange for those goods or services. ASU 2014-09 defines a five-step process that requires
companies to exercise more judgment and make more estimates than under the current guidance. These may include identifying
performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price, and
allocating the transaction price to each separate performance obligation. Since the issuance of ASU 2014-09, several additional
ASUs have been issued and incorporated within Topic 606 to clarify various elements of the guidance. ASU 2014-09 allows a
choice of transition methods: (a) a full retrospective adoption in which the standard is applied to all of the periods presented, or
(b) a modified retrospective adoption in which the standard is applied only to the most current period presented in the financial
statements with a cumulative-effect adjustment reflected in retained earnings. ASU 2014-09 also requires significantly expanded
disclosures regarding the qualitative and quantitative information of an entity’s nature, amount, timing and uncertainty of
revenue and cash flows arising from contracts with customers. ASU 2014-09 is effective for annual reporting periods beginning
after December 15, 2017, including interim periods within those periods.

F-14

In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers – Principal versus Agent
Considerations (Reporting Revenue Gross versus Net). ASU 2016-08 does not change the core principle of the guidance, rather
it clarifies the implementation guidance on principal versus agent considerations. ASU 2016-08 clarifies the guidance in ASU
No. 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition
requirements for ASU 2016-08 are the same as for ASU 2014-09, which was deferred by one year by ASU No. 2015-14,
Revenue from Contracts with Customers – Deferral of the Effective Date. Public business entities should adopt the new revenue
recognition standard for annual reporting periods beginning after December 15, 2017, including interim periods within that year.
Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods
within that year.

In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers – Identifying Performance
Obligations and Licensing. ASU 2016-10 does not change the core principle of the guidance, rather it clarifies the identification
of performance obligations and the licensing implementation guidance, while retaining the related principles for those areas.
ASU 2016-10 clarifies the guidance in ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet
effective. The effective date and transition requirements for ASU 2016-10 are the same as for ASU 2014-09, which was deferred
by one year by ASU No. 2015-14, Revenue from Contracts with Customers – Deferral of the Effective Date. Public business
entities should adopt the new revenue recognition standard for annual reporting periods beginning after December 15, 2017,
including interim periods within that year. Early adoption is permitted only as of annual reporting periods beginning after
December 15, 2016, including interim periods within that year.

In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers – Narrow-Scope Improvements and
Practical Expedients. ASU 2016-12 does not change the core principle of the guidance, rather it affects only certain narrow
aspects of Topic 606, including assessing collectability, presentation of sales taxes, noncash consideration, and completed
contracts and contract modifications at transition. ASU 2016-12 affects the guidance in ASU No. 2014-09, Revenue from
Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for ASU 2016-12
are the same as for ASU 2014-09, which was deferred by one year by ASU No. 2015-14, Revenue from Contracts with
Customers – Deferral of the Effective Date. Public business entities should adopt the new revenue recognition standard for annual
reporting periods beginning after December 15, 2017, including interim periods within that year. Early adoption is permitted only
as of annual reporting periods beginning after December 15, 2016, including interim periods within that year.

In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from
Contracts with Customers. ASU 2016-20 does not change the core principle of the guidance, rather it affects only certain narrow
aspects of Topic 606, including loan guarantee fees, contract cost impairment testing, provisions for losses on construction- and
production-type contracts, clarification of the scope of Topic 606, disclosure of remaining and prior-period performance
obligations, contract modification, contract asset presentation, refund liability, advertising costs, fixed-odds wagering contracts in
the casino industry, and cost capitalization for advisors to private and public funds. ASU 2016-20 affects the guidance in ASU
No. 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition
requirements for ASU 2016-12 are the same as for ASU 2014-09, which was deferred by one year by ASU No. 2015-14,
Revenue from Contracts with Customers – Deferral of the Effective Date. Public business entities should adopt the new revenue
recognition standard for annual reporting periods beginning after December 15, 2017, including interim periods within that year.
Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods
within that year.

Following the sale of the Business to Cardinal Health 414 in March 2017, we generate revenue primarily from grants to support
certain of our product development programs. Such grant revenues are recognized only after expenses reimbursable under the
grants have been paid. We also earn revenues related to our licensing and distribution agreements. The consideration we are
eligible to receive under our licensing and distribution agreements typically includes upfront payments, reimbursement for
research and development costs, milestone payments, and royalties. Each licensing and distribution agreement is unique and will
require separate assessment using the five-step process under ASU 2014-09. We adopted ASU 2014-09 along with additional
related ASUs 2016-08, 2016-10, 2016-12 and 2016-20 effective January 1, 2018 using the modified retrospective method of
adoption. The Company expects the adoption of ASU 2014-09 and related ASUs to result in increases in deferred revenue and
accumulated deficit of approximately $100,000.

F-15

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). ASU 2016-02 requires the recognition of lease assets
and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. The core principle of Topic
842 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of
financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the
underlying asset for the lease term. ASU 2016-02 is effective for public business entities for fiscal years beginning after
December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. We expect the adoption of
ASU 2016-02 to result in an increase in right-of-use assets and lease liabilities on our consolidated statement of financial position
related to our leases that are currently classified as operating leases, primarily for office space. Management is currently
evaluating the impact that the adoption of ASU 2016-02 will have on our consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and
Cash Payments. ASU 2016-15 addresses certain specific cash flow issues with the objective of reducing the existing diversity in
practice in how certain cash receipts and cash payments are presented and classified in the statement cash flows. ASU 2016-15 is
effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal
years. Early adoption is permitted in any interim or annual period. If an entity early adopts ASU 2016-15 in an interim period, any
adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. ASU 2016-15 should be
applied using a retrospective transition method to each period presented, with certain exceptions. We adopted ASU 2016-15 upon
issuance, which resulted in debt prepayment costs being classified as financing costs rather than operating costs on the statement
of cash flows.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows – Restricted Cash. ASU 2016-18 requires that
the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash or
equivalents. Therefore, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when
reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is
effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal
years. Early adoption in permitted, including adoption in an interim period. If an entity early adopts ASU 2016-18 in an interim
period, any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. We adopted
ASU 2016-18 effective January 1, 2018. The Company expects the adoption of ASU 2016-18 to result in reclassification of $5.0
million of restricted cash in the consolidated statement of cash flows for the years ended December 31, 2017 and 2016.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a
Business. ASU 2017-01 provides a screen to determine when a set of assets and activities (collectively, a “set”) is not a business.
The screen requires that when substantially all of the fair market value of the gross assets acquired (or disposed of) is
concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. If the screen is not met,
ASU 2017-01 (1) requires that to be considered a business, a set must include, at a minimum, an input and a substantive process
that together significantly contribute to the ability to create output, and (2) removes the evaluation of whether a market participant
could replace missing elements. ASU 2017-01 is effective for public business entities for annual periods beginning after
December 15, 2017, including interim periods within those periods. ASU 2017-01 should be applied prospectively on or after the
effective date. No disclosures are required at transition. Early adoption is permitted for certain transactions as described in ASU
2017-01. The adoption of ASU 2017-01 effective January 1, 2018 will not have a material effect on our consolidated financial
statements.

In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718), Scope of Modification
Accounting. ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award
require an entity to apply modification accounting. An entity should account for the effects of a modification unless all of the
following criteria are met: (1) The fair value of the modified award is the same as the fair value of the original award
immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique
that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the
modification. (2) The vesting conditions of the modified award are the same as the vesting conditions of the original award
immediately before the original award is modified. (3) The classification of the modified award as an equity instrument or a
liability instrument is the same as the classification of the original award immediately before the original award is modified.
Disclosure requirements remain unchanged. ASU 2017-09 is effective for all entities for annual periods, and interim periods
within those annual periods, beginning after December 15, 2017. Early adoption is permitted as described in ASU 2017-09. The
adoption of ASU 2017-09 effective January 1, 2018 will not have a material effect on our consolidated financial statements.

In September 2017, the FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with
Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842). ASU 2017-13 adds SEC paragraphs pursuant to an SEC
Staff Announcement made in July 2017 and clarifies several issues related to transition and implementation of the covered topics,
including clarification of the definition of a public business entity, the effect of a change in tax law or rates on leveraged leases,
and related amendments to the eXtensible Business Reporting Language (“XBRL”) taxonomy. Management is currently
evaluating the impact that the adoption of ASU 2017-13 will have on our consolidated financial statements.

F-16

2. Liquidity

Prior to the Asset Sale to Cardinal Health 414 in March 2017, all of our material assets were pledged as collateral for our borrowings
under the CRG Loan Agreement. In addition to the security interest in our assets, the CRG Loan Agreement included covenants that
imposed significant requirements on us. An event of default would have entitled CRG to accelerate the maturity of our indebtedness,
increase the interest rate from 14% to the default rate of 18% per annum, and invoke other remedies available to it under the loan
agreement and the related security agreement. During the course of 2016, CRG alleged multiple claims of default on the CRG Loan
Agreement, and filed suit in the District Court of Harris County, Texas (the “Texas Court”). On June 22, 2016, CRG exercised control
over one of the Company’s primary bank accounts and took possession of $4.1 million that was on deposit. Multiple motions, actions
and hearings followed over the remainder of 2016 and into 2017.

On March 3, 2017, the Company entered into a Global Settlement Agreement with MT, CRG, and Cardinal Health 414 to effectuate
the terms of the settlement previously entered into by the parties on February 22, 2017. In accordance with the Global Settlement
Agreement, on March 3, 2017, the Company repaid the $59.0 million Deposit Amount of its alleged indebtedness and other
obligations outstanding under the CRG Term Loan. Concurrently with payment of the Deposit Amount, CRG released all liens and
security interests granted under the CRG Loan Documents and the CRG Loan Documents were terminated and are of no further force
or effect; provided, however, that, notwithstanding the foregoing, the Company and CRG agreed to continue with their proceeding
pending in the Texas Court to fully and finally determine the Final Payoff Amount. The Company and CRG further agreed that the
Final Payoff Amount would be no less than $47.0 million and no more than $66.0 million. In addition, concurrently with the payment
of the Deposit Amount and closing of the Asset Sale, (i) Cardinal Health 414 agreed to post a $7.0 million letter of credit in favor of
CRG (at the Company’s cost and expense to be deducted from the closing proceeds due to the Company, and subject to Cardinal
Health 414’s indemnification rights under the Purchase Agreement) as security for the amount by which the High Payoff Amount
exceeds the Deposit Amount in the event the Company is unable to pay all or a portion of such amount, and (ii) CRG agreed to post a
$12.0 million letter of credit in favor of the Company as security for the amount by which the Deposit Amount exceeds the Low
Payoff Amount. If, on the one hand, it is finally determined by the Texas Court that the amount the Company owes to CRG under the
Loan Documents exceeds the Deposit Amount, the Company will pay such excess amount, plus the costs incurred by CRG in
obtaining CRG’s letter of credit, to CRG and if, on the other hand, it is finally determined by the Texas Court that the amount the
Company owes to CRG under the Loan Documents is less than the Deposit Amount, CRG will pay such difference to the Company
and reimburse Cardinal Health 414 for the costs incurred by Cardinal Health 414 in obtaining its letter of credit. Any payments owing
to CRG arising from a final determination that the Final Payoff Amount is in excess of $59.0 million shall first be paid by the
Company without resort to the letter of credit posted by Cardinal Health 414, and such letter of credit shall only be a secondary
resource in the event of failure of the Company to make payment to CRG. The Company will indemnify Cardinal Health 414 for any
costs it incurs in payment to CRG under the settlement, and the Company and Cardinal Health 414 further agree that Cardinal Health
414 can pursue all possible remedies, including offset against earnout payments (guaranteed or otherwise) under the Purchase
Agreement, warrant exercise, or any other payments owed by Cardinal Health 414, or any of its affiliates, to the Company, or any of
its affiliates, if Cardinal Health 414 incurs any cost associated with payment to CRG under the settlement. The $2.0 million being held
in escrow pursuant to court order in the Ohio case and the $3.0 million being held in escrow pursuant to court order in the Texas case
were released to the Company at closing of the Asset Sale. On March 3, 2017, Cardinal Health 414 posted a $7.0 million letter of
credit, and on March 7, 2017, CRG posted a $12.0 million letter of credit, each as required by the Global Settlement Agreement.

The trial was held in Texas in December 2017. The Texas Court ruled that the Company’s total obligation to CRG is in excess of
$66.0 million, limited to $66.0 million under the Global Settlement Agreement. The Texas Court acknowledged only the $59.0
million payment made in March 2017, concluding that the Company owes CRG another $7.0 million, however the Texas Court did
not expressly take the Company’s June 2016 payment of $4.1 million into account. The Company believes that this $4.1 million
should be credited against the $7.0 million; CRG disagrees. On January 16, 2018, the Company filed an emergency motion to set
supersedeas bond and to modify judgment, describing the Texas Court’s oversight of not explaining how to apply the $4.1 million
payment, requesting that the judgment be modified to set the supersedeas amount at $2.9 million so that the Company can stay
enforcement of the judgment pending appeal. The Texas Court refused to rule on this motion, and the court of appeals entered an
order compelling the Texas Court to set a supersedeas amount. The Texas Court has scheduled a hearing on the issue for March 26,
2018, however it has not yet set the amount, and enforcement of the judgment is stayed until seven days after the Texas Court does
so. We currently await further action by the Texas Court. If we are ultimately required to pay an additional $7.0 million to CRG,
such payment would have a significant adverse effect on our financial position and would likely force us to curtail our planned
development activities. See Note 13.

In addition, the Company previously was a party to a Loan Agreement with Platinum-Montaur Life Sciences LLC (“Platinum-
Montaur”), an affiliate of Platinum Management (NY) LLC, Platinum Partners Value Arbitrage Fund L.P., Platinum Partners Liquid
Opportunity Master Fund L.P., Platinum Liquid Opportunity Management (NY) LLC, and Montsant Partners LLC (collectively,
“Platinum”) (the “Platinum Loan Agreement”) and a Third Amended and Restated Promissory Note (“Platinum Note”) given by
Navidea in favor of Platinum-Montaur.

F-17

In connection with the closing of the Asset Sale to Cardinal Health 414, the Company repaid to PPCO an aggregate of approximately
$7.7 million in partial satisfaction of the Company’s liabilities, obligations and indebtedness under the Platinum Loan Agreement
between the Company and Platinum-Montaur, which were transferred by Platinum-Montaur to PPCO. The Company was informed
by PPVA that it was the owner of additional amounts owed on the Platinum-Montaur loan. PPVA claims a balance of approximately
$1.9 million was due upon closing of the Asset Sale. That amount is also subject to competing claims of ownership by Dr. Michael
Goldberg, the Company’s President and Chief Executive Officer. The Company has not yet paid the balance to anyone, as ownership
is subject to dispute.

On March 2, 2017, PPCO provided the Payoff Letter. In the Payoff Letter, PPCO defined “Indebtedness” to include all amounts due
under the Platinum Note, indicated that upon payment of the Payoff Amount, all “Indebtedness owed to Lender” shall have been
satisfied in full, and that the “Loan Documents,” which included the Platinum Loan Agreement and the Platinum Note, “shall
terminate and have no further force or effect.” The letter also confirmed that as of the date that payment was made by Navidea, the
Receiver was providing a release and indemnification in favor of Navidea based on any claims made by any affiliate of PPCO. The
Payoff Amount was paid pursuant to the Payoff Letter. The remaining balance of the Platinum Note would have matured under its
terms in September 2017, however the Company has not paid the balance as it is still subject to ongoing competing claims of
ownership. The Company intends to pay the balance of the debt if it is determined to be due and owing to PPVA or Dr. Goldberg.

On November 2, 2017, Platinum-Montaur commenced an action against the Company in the Supreme Court of the State of New
York, County of New York, seeking damages in the amount of $1,914,827.22 purportedly due as of March 3, 2017, plus interest
accruing thereafter. The claims asserted are for breach of contract and unjust enrichment in connection with funds received by the
Company under the Platinum Loan Agreement. Said action was removed to the United States District of New York on December 6,
2017. An initial pretrial conference was held on January 26, 2018. At the conference the Court stayed the deadline for the Company
to answer or otherwise respond to the complaint. The Court also directed the parties to engage in informal jurisdictional discovery and
a follow up status conference was held on March 9, 2018, during which the Court set a briefing schedule and determined that
Navidea’s motion to dismiss is due on April 6, 2018. The Court also referred the case to a settlement conference, which has been
scheduled for April 30, 2018. Because the funds sought by Platinum-Montaur are subject to claims of competing ownership, the
Company intends to defend itself in the action and seek a determination as to whether any funds are due and owing to the plaintiff.

Following the completion of the Asset Sale to Cardinal Health 414 and the repayment of a majority of our indebtedness, we believe
that substantial doubt about the Company’s financial position and ability to continue as a going concern was alleviated. Based on our
current working capital and our projected cash burn, including our belief that the Company will be obligated to pay up to an additional
$2.9 million to CRG, management believes that the Company will be able to continue as a going concern for at least twelve months
following the issuance of this Annual Report on Form 10-K. Our projected cash burn also factors in certain cost cutting initiatives
that have been implemented and approved by the board of directors, including reductions in the workforce and a reduction in facilities
expenses. Additionally, we have considerable discretion over the extent of development project expenditures and have the ability to
curtail the related cash flows as needed. The Company also has funds remaining under outstanding grant awards, and continues
working to establish new sources of non-dilutive funding, including collaborations and additional grant funding that can augment the
balance sheet as the Company works to reduce spending to levels that can be supported by our revenues. We believe all of these
factors are sufficient to alleviate substantial doubt about the Company’s ability to continue as a going concern.

3. Discontinued Operations

In August 2011, the Company completed the sale of the GDS Business to Devicor. We recorded net income of $759,000 in 2015
related to royalty amounts earned based on 2015 GDS Business revenue. The royalty amount of $1.2 million was offset by $436,000
in estimated taxes which were allocated to discontinued operations.

On March 3, 2017, the Company completed the sale to Cardinal Health 414 of its assets used, held for use, or intended to be used in
operating its business of developing, manufacturing and commercializing a product used for lymphatic mapping, lymph node biopsy,
and the diagnosis of metastatic spread to lymph nodes for staging of cancer, including the Company’s radioactive diagnostic agent
marketed under the Lymphoseek® trademark for current approved indications by the FDA and similar indications approved by the
FDA in the future, in Canada, Mexico and the United States. In exchange for the Acquired Assets, Cardinal Health 414 (i) made a
cash payment to the Company at closing of approximately $80.6 million after adjustments based on inventory being transferred and an
advance of $3.0 million of guaranteed earnout payments as part of the CRG settlement, (ii) assumed certain liabilities of the Company
associated with the Product as specified in the Purchase Agreement, and (iii) agreed to make periodic earnout payments (to consist of
contingent payments and milestone payments which, if paid, will be treated as additional purchase price) to the Company based on net
sales derived from the purchased Product.

We recorded a net gain on the sale of the Business of $89.2 million for the year ended December 31, 2017, including $16.5 million in
guaranteed consideration, which was discounted to the present value of future cash flows. The proceeds were offset by $3.3 million in
estimated fair value of warrants issued to Cardinal Health 414, $2.0 million in legal and other fees related to the sale, $800,000 in net
balance sheet dispositions and write-offs, and $4.1 million in estimated taxes. The guaranteed consideration was recorded as a
receivable, the balance of which is reduced as quarterly payments are received.

F-18

As a result of the sale of the GDS Business to Devicor and the Asset Sale to Cardinal Health 414, we reclassified certain assets and
liabilities as assets and liabilities associated with discontinued operations. The following assets and liabilities have been segregated
and included in assets associated with discontinued operations or liabilities associated with discontinued operations, as appropriate, in
the consolidated balance sheets:

Accounts and other receivables
Inventory, net
Prepaid expenses

Assets associated with discontinued operations, current
Property and equipment, net of accumulated depreciation
Patents and trademarks, net of accumulated amortization

Assets associated with discontinued operations, noncurrent
Total assets associated with discontinued operations

Accounts payable
Accrued liabilities
Deferred revenue

Liabilities associated with discontinued operations, current

Other liabilities

Total liabilities associated with discontinued operations

December 31,
2017

December 31,
2016

— $
—
—
—
—
—
—
— $

— $
7,092
—
7,092
—
7,092 $

1,598,994
1,374,618
170,635
3,144,247
70,973
34,282
105,255
3,249,502

1,957,938
607,659
2,300,000
4,865,597
—
4,865,597

In addition, we reported certain revenues related to the sale of the GDS Business to Devicor, as well as certain revenues and expenses
related to the Asset Sale to Cardinal Health 414, to discontinued operations for all periods presented, including interest expense related
to the CRG and Platinum debt obligations as required by current accounting guidance. The following amounts have been segregated
from continuing operations and included in discontinued operations in the consolidated statements of operations:

Revenue:

Lymphoseek sales revenue
Royalties on GDS Business
Grant and other revenue

Total revenue
Cost of goods sold
Gross profit
Operating expenses:

Research and development
Selling, general and administrative

Total operating expenses

Income from discontinued operations
Interest expense
Income (loss) before income taxes
Benefit from (provision for) income taxes
Loss from discontinued operations

4. Fair Value

Years Ended December 31,
2016

2017

2015

2,917,213 $
—
—
2,917,213
364,192
2,553,021

383,446
961,873
1,345,319
1,207,702
(1,706,491)
(498,789)
8,031
(490,758) $

16,997,497 $
—
575
16,998,072
2,234,780
14,763,292

1,744,496
5,093,529
6,838,025
7,925,267
(14,856,404)
(6,931,137)
—
(6,931,137) $

10,235,277
1,194,660
669
11,430,606
1,751,537
9,679,069

2,225,004
6,369,183
8,594,187
1,084,882
(5,603,820)
(4,518,938)
—
(4,518,938)

The Company was informed by PPVA that it was the owner of additional amounts owed on the Platinum-Montaur loan. PPVA
claims a balance of approximately $1.9 million was due upon closing of the Asset Sale. That amount is also subject to competing
claims of ownership by Dr. Michael Goldberg, the Company’s President and Chief Executive Officer. The Company has not yet paid
the balance to anyone, as ownership is subject to dispute.

F-19

If determined to be the obligee under the Platinum Note, PPVA or Dr. Goldberg would have had the right to convert all or any portion
of the unpaid principal or unpaid interest accrued on all draws under the Platinum credit facility, under certain circumstances. The
Platinum embedded option to convert such debt into common stock is recorded at fair value on the consolidated balance sheets and
deemed to be a derivative instrument as the amount of shares to be issued upon conversion is indeterminable. The estimated fair value
of the conversion option of the Platinum Note payable is approximately $0 and $153,000 on December 31, 2017 and 2016,
respectively, and is included in notes payable on the accompanying consolidated balance sheets. Subsequent to its maturity in
September 2017, the Platinum Note no longer has an embedded conversion option.

MT issued warrants to purchase MT Common Stock with certain characteristics including a net settlement provision that require the
warrants to be accounted for as a derivative liability at fair value on the consolidated balance sheets. The estimated fair value of the
MT warrants is $63,000 at both December 31, 2017 and 2016, is included in other liabilities on the accompanying consolidated
balance sheets, and will continue to be measured on a recurring basis. See Notes 1(m) and 10.

The following tables set forth, by level, financial liabilities measured at fair value on a recurring basis:

Liabilities Measured at Fair Value on a Recurring Basis as of December 31, 2017

Description
Platinum conversion option
Liability related to MT warrants

Quoted Prices
in Active
Markets for
Identical
Assets and
Liabilities
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs (a)(b)

(Level 3)

Balance as of
December
31,
2017

— $
—

— $
63,000

—
63,000

Liabilities Measured at Fair Value on a Recurring Basis as of December 31, 2016

Description
Platinum conversion option
Liability related to MT warrants

Quoted Prices
in Active
Markets for
Identical
Assets and
Liabilities
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs (a)(b)

(Level 3)

Balance as
of
December
31,
2016

— $
—

153,357 $
63,000

153,357
63,000

a. Valuation Processes-Level 3 Measurements: The Company utilizes third-party valuation services that use complex models
such as Monte Carlo simulation to estimate the value of our financial liabilities. Each reporting period, the Company provides
significant unobservable inputs to the third-party valuation experts based on current internal estimates and forecasts.

The assumptions used in the Monte Carlo simulation as of December 31, 2016 are summarized in the following table:

Estimated volatility
Expected term (in years)
Debt rate
Beginning stock price

2016

76%

4.75
8.125%
0.64

In addition, as of December 31, 2016 the Company estimated a 95% chance that the majority of the Platinum debt would be
repaid in connection with the closing of the Asset Sale to Cardinal Health 414 during the first quarter of 2017.

b. Sensitivity Analysis-Level 3 Measurements: Changes in the Company’s current internal estimates and forecasts were likely to

cause material changes in the fair value of the Platinum conversion option. The significant unobservable inputs used in the fair
value measurement of the liability included the amount and timing of future draws expected to be taken under the Platinum Loan
Agreement based on then-current internal forecasts and management’s estimate of the likelihood of actually making those draws
as opposed to obtaining other sources of financing. Significant increases (decreases) in any of the significant unobservable
inputs would result in a higher (lower) fair value measurement. A change in one of the inputs would not necessarily result in a
directionally similar change in the others.

F-20

There were no Level 1 or Level 2 liabilities outstanding at any time during the years ended December 31, 2017 and 2016. There were
no transfers in or out of our Level 1 or Level 2 liabilities during the years ended December 31, 2017 and 2016. Changes in the
estimated fair value of our Level 3 liabilities relating to unrealized gains (losses) are recorded as changes in fair value of financial
instruments in the consolidated statements of operations. The change in the estimated fair value of our Level 3 liabilities during the
years ended December 31, 2017, 2016 and 2015 was an approximate decrease of $153,000, a decrease of $2.9 million, and an increase
of $615,000, respectively.

5. Stock-Based Compensation

For the years ended December 31, 2017, 2016 and 2015, our total stock-based compensation expense, which includes reversals of
expense for certain forfeited or cancelled awards, was approximately $394,000, $278,000 and $2.4 million, respectively. We have not
recorded any income tax benefit related to stock-based compensation for the years ended December 31, 2017, 2016 and 2015.

A summary of the status of our stock options as of December 31, 2017, and changes during the year then ended, is presented below:

Year Ended December 31, 2017

Weighted
Average
Remaining
Contractual
Life
(in years)

Weighted
Average
Exercise
Price

Aggregate
Intrinsic
Value

2.00
0.71
0.36
1.77
1.50
2.15

7.0
4.9

$
$

—
—

Number of
Options

3,380,615 $
1,720,000
(50,000)
(1,362,936)
3,687,679 $
1,946,445 $

Outstanding at beginning of year
Granted
Exercised
Canceled and forfeited
Outstanding at end of year
Exercisable at end of year

The weighted average grant-date fair value of options granted in 2017, 2016, and 2015 was $0.19, $0.53 and $1.67, respectively.
During 2017, 50,000 stock options with an aggregate intrinsic value of $4,400 were exercised in exchange for issuance of 50,000
shares of our common stock, resulting in gross proceeds of $18,100. During 2016, 50,000 stock options with an aggregate intrinsic
value of $23,000 were exercised in exchange for issuance of 50,000 shares of our common stock, resulting in gross proceeds of
$13,500. During 2015, 146,625 stock options with an aggregate intrinsic value of $144,000 were exercised in exchange for issuance of
124,238 shares of our common stock, resulting in gross proceeds of $66,000. In 2017, 2016, and 2015, the aggregate fair value of
stock options vested during the year was $0, $3,000 and $277,000, respectively.

A summary of the status of our unvested restricted stock as of December 31, 2017, and changes during the year then ended, is
presented below:

Unvested at beginning of year
Granted
Forfeited
Vested
Unvested at end of year

Year Ended
December 31, 2017

Number of
Shares

207,000 $
200,000
(50,000)
(207,000)
150,000 $

Weighted
Average
Grant-Date
Fair Value

1.17
0.51
0.51
1.17
0.51

During 2017, 2016 and 2015, 207,000, 66,000 and 333,250 shares, respectively, of restricted stock vested with aggregate vesting date
fair values of $99,000, $63,000 and $511,000, respectively.

F-21

In October 2017, 50,000 shares of restricted stock held by a non-employee director with an aggregate fair value of $22,000 were
forfeited as a result of his departure from the Board. During 2017, 140,000 shares of restricted stock held by non-employee directors
with an aggregate fair value of $65,000 vested as scheduled according to the terms of the restricted stock agreements. Also during
2017, 17,000 shares of restricted stock held by a non-employee director with an aggregate fair value of $9,000, and 50,000 shares of
restricted stock held by an executive officer with an aggregate fair value of $25,000, were vested by Board action after determination
that the vesting events would not occur due to changes in the Company’s development programs.

In February 2016, 100,000 shares of restricted stock held by an executive officer with an aggregate fair value of $96,000 were
forfeited in connection with his separation from employment. During 2016, 66,000 shares of restricted stock held by non-employee
directors with an aggregate fair value of $63,000 vested as scheduled according to the terms of the restricted stock agreements. Also
during 2016, 106,000 shares of restricted stock held by non-employee directors with an aggregate fair value of $118,000 were
forfeited as a result of their departures from the Board.

During 2015, 120,000 shares of restricted stock held by non-employee directors with an aggregate fair value of $193,000 vested as
scheduled according to the terms of the restricted stock agreements. Also during 2015, 193,250 shares of restricted stock held by
employees with an aggregate fair value of $286,000 vested as scheduled according to the terms of the restricted stock agreements.
During 2015, 27,000 shares of restricted stock held by employees with an aggregate fair value of $50,000 were forfeited in connection
with their separation from employment. In April 2015, 20,000 shares of restricted stock held by an executive officer with an aggregate
fair value of $32,000 vested upon reaching a milestone as defined by the terms of the restricted stock agreement. In May 2015, 20,000
shares of restricted stock held by an executive officer with an aggregate fair value of $25,000 were forfeited in connection with his
separation from employment. In July 2015, 61,000 shares of restricted stock held by non-employee directors with an aggregate fair
value of $107,000 were forfeited as a result of their departures from the Board.

During 2015, we paid minimum tax withholdings related to stock options exercised and restricted stock vested of $24,000. No such
tax withholdings were paid related to stock options exercised or restricted stock vested during 2017 or 2016. As of December 31,
2017, there was approximately $176,000 of total unrecognized compensation cost related to stock option and restricted stock awards,
which we expect to recognize over remaining weighted average vesting terms of 1.2 years. See Note 1(e).

6. Earnings Per Share

Basic earnings (loss) per share is calculated by dividing net income (loss) attributable to common stockholders by the weighted-
average number of common shares and, except for periods with a loss from operations, participating securities outstanding during the
period. Diluted earnings (loss) per share reflects additional common shares that would have been outstanding if dilutive potential
common shares had been issued. Potential common shares that may be issued by the Company include convertible debt, convertible
preferred stock, options and warrants.

The following table sets forth the reconciliation of the weighted average number of common shares outstanding used to compute basic
and diluted earnings (loss) per share for the years ended December 31, 2017, 2016 and 2015:

Weighted average shares outstanding, basic
Dilutive shares related to warrants
Unvested restricted stock
Weighted average shares outstanding, diluted

Years Ended December 31,
2016
155,422,384
—
—
155,422,384

2017
161,592,569
4,273,889
150,000
166,016,458

2015
151,180,222
—
—
151,180,222

Diluted earnings (loss) per common share for the years ended December 31, 2017, 2016 and 2015 excludes the effects of 14.5 million,
14.1 million and 14.6 million common share equivalents, respectively, since such inclusion would be anti-dilutive. The excluded
shares consist of common shares issuable upon exercise of outstanding stock options and warrants, and upon the conversion of
convertible debt and convertible preferred stock.

The Company’s unvested stock awards contain nonforfeitable rights to dividends or dividend equivalents, whether paid or unpaid
(referred to as “participating securities”). Therefore, the unvested stock awards are required to be included in the number of shares
outstanding for both basic and diluted earnings per share calculations. However, due to our loss from continuing operations, 150,000,
207,000 and 361,000 shares of unvested restricted stock for the years ended December 31, 2017, 2016 and 2015, respectively, were
excluded in determining basic and diluted loss per share because such inclusion would be anti-dilutive.

F-22

7. Accounts and Other Receivables and Concentrations of Credit Risk

Accounts and other receivables at December 31, 2017 and 2016 consist of the following:

Guaranteed earnout receivable, current
Trade
Other

Total accounts and other receivables

2017

2016

8,084,392 $
—
53,480
8,137,872 $

—
18,420
184,596
203,016

At December 31, 2017 and 2016, approximately 99% and 0%, respectively, of net accounts and other receivables were due from
Cardinal Health 414. As of December 31, 2017 and 2016, there was no allowance for doubtful accounts. We do not believe we are
exposed to significant credit risk related to Cardinal Health 414 based on the overall financial strength and credit worthiness of the
entity. We believe that we have adequately addressed credit risks in estimating the allowance for doubtful accounts. See Note 1(g).

Accounts and other receivables in the amount of $1,598,994 as of December 31, 2016 have been reclassified to current assets
associated with discontinued operations. See Note 3.

Inventory

The components of net inventory at December 31, 2017 and 2016, net of reserves of $748 and $0, respectively, are as follows:

Materials
Work-in-process
Finished goods
Reserves

Total inventory, net

2017

2016

— $
—
748
(748)
— $

94,500
1,708
—
—
96,208

During 2016, we utilized $131,000 of Tc99m tilmanocept inventory for clinical study and product development purposes. Also during
2016, we recorded obsolescence reserves of $43,000 of Tc99m tilmanocept inventory related to specific lots that expired or were
nearing product expiry and therefore were no longer expected to be sold. See Note 1(h).

Inventory in the amount of $1,374,618 as of December 31, 2016 has been reclassified to current assets associated with discontinued
operations. See Note 3.

9. Property and Equipment

The major classes of property and equipment are as follows:

Production machinery and equipment
Other machinery and equipment, primarily computers and

research equipment
Furniture and fixtures
Purchased software
Leasehold improvements*

Total property and equipment

Useful Life (in
years)
5

2017

2016

575,091 $

810,996

3 – 5
7
3
Term of Lease
$

293,757
4,327
320,435
12,448
1,206,058 $

407,201
645,922
470,669
897,584
3,232,372

* We amortize leasehold improvements over the term of the lease, which in all cases is shorter than the estimated useful life of the

asset.

No property or equipment was under capital lease at December 31, 2017 and 2016. During 2017, 2016 and 2015, we recorded
$232,000, $496,000 and $562,000, respectively, of depreciation and amortization related to property and equipment. See Note 1(i).

Property and equipment, net of accumulated amortization, in the amount of $70,973 as of December 31, 2016 has been reclassified to
noncurrent assets associated with discontinued operations. See Note 3.

F-23

10. Investment in Macrophage Therapeutics, Inc.

In March 2015, MT, our previously wholly-owned subsidiary, entered into a Securities Purchase Agreement to sell up to 50 shares of
its Series A Convertible Preferred Stock (“MT Preferred Stock”) and warrants to purchase up to 1,500 shares of MT Common Stock to
the MT Investors for a purchase price of $50,000 per unit. A unit consists of one share of MT Preferred Stock and 30 warrants to
purchase MT Common Stock. Under the agreement, 40% of the MT Preferred Stock and warrants are committed to be purchased by
Dr. Goldberg, and the balance by Platinum. The full 50 shares of MT Preferred Stock and warrants that may be sold under the
agreement are convertible into, and exercisable for, MT Common Stock representing an aggregate 1% interest on a fully converted
and exercised basis. Navidea owns the remainder of the MT Common Stock. On March 11, 2015, definitive agreements with the MT
Investors were signed for the sale of the first 10 tranche of shares of MT Preferred Stock and warrants to purchase 300 shares of MT
Common Stock to the MT Investors, with gross proceeds to MT of $500,000. The MT Common Stock held by parties other than
Navidea is reflected on the consolidated balance sheets as a noncontrolling interest.

The warrants have certain characteristics including a net settlement provision that require the warrants to be accounted for as a
derivative liability at fair value, with subsequent changes in fair value included in earnings. The fair value of the warrants was
estimated to be $63,000 at issuance and at December 31, 2017 and 2016. See Notes 1(m) and 4. In addition, the MT Preferred Stock
was immediately available for conversion upon issuance and includes a beneficial conversion feature, resulting in a deemed dividend
of $46,000 related to the beneficial conversion feature. Finally, certain provisions of the Securities Purchase Agreement obligate the
MT Investors to acquire the remaining MT Preferred Stock and related warrants for $2.0 million at the option of MT. The estimated
relative fair value of this put option was $113,000 at issuance based on the Black-Scholes option pricing model and is classified
within stockholders' equity.

In addition, we entered into a Securities Exchange Agreement with the MT Investors providing them an option to exchange their MT
Preferred Stock for our common stock in the event that MT has not completed a public offering with gross proceeds to MT of at least
$50 million by the second anniversary of the closing of the initial sale of MT Preferred Stock, at an exchange rate per share obtained
by dividing $50,000 by the greater of (i) 80% of the twenty-day volume weighted average price per share of our common stock on the
second anniversary of the initial closing or (ii) $3.00. To the extent that the MT Investors do not timely exercise their exchange right,
MT has the right to redeem their MT Preferred Stock for a price equal to $58,320 per share. We also granted MT an exclusive license
for certain therapeutic applications of the Manocept technology.

In December 2015 and May 2016, Platinum contributed a total of $200,000 to MT. MT was not obligated to provide anything in
return, although it was considered likely that the MT Board would ultimately authorize some form of compensation to Platinum.
During the year ended December 31, 2016, the Company recorded the entire $200,000 as a current liability pending determination of
the form of compensation.

In July 2016, MT’s Board of Directors authorized modification of the original investments of $300,000 by Platinum and $200,000 by
Dr. Goldberg to a convertible preferred stock with a 10% PIK coupon retroactive to the time the initial investments were made. The
conversion price of the preferred will remain at the $500 million initial market cap but a full ratchet was added to enable the
adjustment of conversion price, warrant number and exercise price based on the valuation of the first institutional investment round.
In addition, the MT Board authorized issuance of additional convertible preferred stock with the same terms to Platinum as
compensation for the additional $200,000 of investments made in December 2015 and May 2016. Based on the MT Board’s
authorization of additional equity, the Company reclassified the additional $200,000 from a current liability to equity during the year
ended December 31, 2017. As of the date of filing of this Form 10-K, final documents related to the above transactions authorized by
the MT Board have not been completed.

11. Investment in R-NAV, LLC

In July 2014, Navidea formed a joint enterprise with Essex Woodlands-backed Rheumco, LLC (“Rheumco”), to develop and
commercialize radiolabeled diagnostic and therapeutic products for rheumatologic and arthritic diseases. The joint enterprise, called R-
NAV, LLC, combined Navidea’s proprietary Manocept CD206 macrophage targeting platform and Rheumco’s proprietary Tin-117m
radioisotope technology to focus on leveraging the platforms across several indications with high unmet medical need, including the
detection and treatment of RA and veterinary osteoarthritis.

Both Rheumco and Navidea contributed licenses for intellectual property and technology to R-NAV in exchange for common units in
R-NAV. The contributions of these licenses were recorded using the carryover basis. R-NAV was initially capitalized through a $4.0
million investment from third-party private investors, and the technology contributions from Rheumco and Navidea. Navidea
committed an additional $1.0 million investment to be paid over three years, with $333,334 in cash contributed at inception and a
promissory note in the principal amount of $666,666, payable in two equal installments on the first and second anniversaries of the
transaction. A principal payment of $333,333 was made on the note payable to R-NAV in July 2015. See Note 13. In exchange for its
capital and in-kind investment, the Company received 3,500,000 Common Units and 1,000,000 Series A preferred units of R-NAV
(“Series A Units”). The Company was to receive an additional 500,000 Series A Units for management and technical services
associated with the programs described above performed by the Company for R-NAV pursuant to a services agreement.

F-24

Navidea initially owned approximately 33.7% of the combined entity. At December 31, 2015, Navidea owned approximately 27.3% of
R-NAV. Joint oversight over certain aspects of R-NAV was shared between Navidea and the other investors; Navidea did not control
the operations of R-NAV. Navidea had three-year call options to acquire, at its sole discretion, all of the equity of R-NAV’s TcRA
Imaging, Inc. subsidiary (“TcRA”) for $10.5 million prior to the launch of a Phase 3 clinical trial for its development program, and all
of the equity of R-NAV’s SnRA Theragnostics, Inc. subsidiary at fair value upon completion of radiochemistry and biodistribution
studies for its development program.

Effective May 31, 2016, Navidea terminated its joint venture with R-NAV. Under the terms of the agreement, Navidea (1) transferred
all of its shares of R-NAV, consisting of 1,500,000 Series A Preferred Units and 3,500,000 Common Units, to R-NAV; and (2) paid
$110,000 in cash to R-NAV. In exchange, R-NAV (1) transferred all of its shares of TcRA to Navidea, thereby returning the
technology licensed to TcRA to Navidea; and (2) forgave the $333,333 remaining on the promissory note. See Note 13. Neither
Navidea nor R-NAV has any further obligations of any kind to either party. As a result of this transaction, the Company recognized a
loss on disposal of the investment in R-NAV of $39,732 during 2016.

Navidea’s investment in R-NAV was accounted for using the equity method of accounting. In accordance with current accounting
guidance, the Company's initial contributions of cash and note payable totaling $1.0 million were allocated between the investment in
R-NAV and the call option on TcRA based on the relative fair values of the assets. As a result, we recorded an initial equity
investment in R-NAV of $727,000 and a call option asset of $273,000 as non-current assets at the time of the initial investment.
Navidea's equity in the loss of R-NAV was $15,159 and $305,253 for the years ended December 31, 2016 and 2015, respectively.
Navidea’s equity in the loss of R-NAV exceeded our initial investment in R-NAV. As such, the carrying value of the Company’s
investment in R-NAV was $0 as of May 31, 2016, immediately prior to termination of the joint venture.

The Company’s obligation to provide $500,000 of in-kind services to R-NAV was being recognized as those services were provided.
The Company provided $15,000 and $64,000 of in-kind services during the years ended December 31, 2016 and 2015, respectively.
As of May 31, 2016, the Company had $383,000 of in-kind services remaining to provide under this obligation. This obligation ceased
on May 31, 2016 under the terms of the agreement.

Navidea provided additional services to R-NAV in support of its development activities. Such services were immaterial to Navidea’s
overall operations.

12. Accounts Payable, Accrued Liabilities and Other

Accounts payable at December 31, 2017 and 2016 includes an aggregate of $0 and $116,000, respectively, due to related parties for
director fees and MT scientific advisory board fees.

Accrued liabilities and other, including an aggregate of $52,000 and $106,000 due to related parties for director fees and MT scientific
advisory board fees, at December 31, 2017 and 2016, respectively, consist of the following:

Contracted services
Compensation
Interest
Other

Total accrued liabilities and other

2017

2016

923,115 $
915,672
—
19,061
1,857,848 $

1,194,678
624,345
5,756,519
297,351
7,872,893

Accounts payable in the amount of $1,957,938 as of December 31, 2016 have been reclassified to current liabilities associated with
discontinued operations. Accrued liabilities in the amount of $7,092 and $607,659 as of December 31, 2017 and 2016, respectively,
have also been reclassified to current liabilities associated with discontinued operations. See Note 3.

13. Notes Payable

Platinum

In July 2012, we entered into an agreement with Platinum to provide us with a credit facility of up to $50.0 million. Following the
approval of Tc99m tilmanocept, Platinum was committed under the terms of the agreement to extend up to $35.0 million in debt
financing to the Company. The agreement also provided for Platinum to extend an additional $15.0 million on terms to be negotiated.
Through June 25, 2013, we drew a total of $8.0 million under the original facility.

F-25

In June 2013, in connection with entering into a Loan Agreement with General Electric Capital Corporation (“GECC”) and MidCap
Financial SBIC, LP (“MidCap”) (the “GECC/MidCap Loan Agreement”), the Company and Platinum entered into an Amendment to
the Platinum Loan Agreement (the “First Platinum Amendment”). Concurrent with the execution of the First Platinum Amendment,
the Company delivered an Amended and Restated Promissory Note (the “First Amended Platinum Note”) to Platinum, which
amended and restated the original promissory note issued to Platinum, in the principal amount of up to $35.0 million. The First
Amended Platinum Note also adjusted the interest rate to the greater of (a) the U.S. Prime Rate as reported in the Wall Street Journal
plus 6.75%; (b) 10%; or (c) the highest rate of interest then payable pursuant to the GECC/MidCap Loan Agreement plus 0.125%. In
addition, the First Platinum Amendment granted Platinum the right, at Platinum’s option subject to certain conditions, to convert all or
any portion of the unpaid principal or unpaid interest accrued on any future draw (the “Conversion Amount”), beginning on a date
two years from the date the draw is advanced, into the number of shares of Navidea’s common stock computed by dividing the
Conversion Amount by a conversion price equal to the lesser of (i) 90% of the lowest VWAP for the 10 trading days preceding the
date of such conversion request, or (ii) the average VWAP for the 10 trading days preceding the date of such conversion request. The
First Platinum Amendment also provided a conversion right on the same terms with respect to the amount of any mandatory
repayment due following the Company achieving $2.0 million in cumulative revenues from sales or licensing of Tc99m tilmanocept.
Platinum’s option to convert future draws into common stock was determined to meet the definition of a liability. The estimated fair
value of the embedded conversion option is included in the carrying value of the new debt.

Also in connection with the First Platinum Amendment, the Company and Platinum entered into a Warrant Exercise Agreement
(“Exercise Agreement”), pursuant to which Platinum exercised its Series X Warrant and Series AA Warrant. The warrants were
exercised on a cashless basis by canceling a portion of the indebtedness outstanding under the Platinum Loan Agreement equal to $4.8
million, the aggregate exercise price of the warrants. Pursuant to the Exercise Agreement, in lieu of common stock, Platinum received
on exercise of the warrants 2,364.9 shares of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”),
convertible into 7,733,223 shares of our common stock in the aggregate (3,270 shares of common stock per preferred share).

In March 2014, in connection with entering into the Oxford Loan Agreement (discussed below), we repaid all amounts outstanding
under the GECC/MidCap Loan Agreement and entered into a second amendment to the Platinum Loan Agreement (the “Second
Platinum Amendment”). Concurrent with the execution of the Second Platinum Amendment, the Company delivered an Amended and
Restated Promissory Note (the “Second Amended Platinum Note”) to Platinum, which amended and restated the First Amended
Platinum Note. The Second Amended Platinum Note adjusted the interest rate to the greater of (i) the U.S. prime rate as reported in
The Wall Street Journal plus 6.75%, (ii) 10.0%, and (iii) the highest rate of interest then payable by the Company pursuant to the
Oxford Loan Agreement plus 0.125%.

In May 2015, in connection with the execution of the CRG Loan Agreement (discussed below), the Company amended the existing
Platinum credit facility to allow this facility to remain in place in a subordinated role to the CRG Loan (the “Third Platinum
Amendment”). Among other things, the Third Platinum Amendment (i) extended the term of the Platinum Loan Agreement until a
date six months following the maturity date or earlier repayment of the CRG Term Loan; (ii) changes the interest rate to the greater of
(a) the U.S. prime rate as reported in The Wall Street Journal plus 6.75%, (b) 10.0% and (c) the highest rate of interest then payable
pursuant to the CRG Term Loan plus 0.125%; (iii) requires such interest to compound monthly; and (iv) changes the provisions of the
Platinum Loan Agreement governing Platinum’s right to convert advances into common stock of the Company. The Third Platinum
Amendment provides for the conversion of all principal and interest outstanding under the Platinum Loan Agreement, but not until
such time as the average daily volume weighted average price of the Company’s common stock for the ten preceding trading days
exceeds $2.53 per share. The Third Platinum Amendment became effective upon initial funding of the CRG Loan Agreement.

The Platinum Note is reflected on the consolidated balance sheets at its principal balance plus the estimated fair value of the
embedded conversion option of $0 and $153,000 at December 31, 2017 and 2016, respectively. During the years ended December 31,
2017, 2016 and 2015, changes in the estimated fair value of the Platinum conversion option were a decrease of $153,000, a decrease
of $2.9 million and an increase of $615,000, respectively, and were recorded as non-cash changes in the fair value of financial
instruments. The balance of the Platinum Note, including the fair value of the embedded conversion option, was $2.0 million and $9.6
million as of December 31, 2017 and 2016, respectively.

The Platinum Loan Agreement, as amended, provided us with a credit facility of up to $50 million. We drew a total of $4.5 million
and $4.0 million under the credit facility in each of the years ended December 31, 2015 and 2013. We did not make any draws under
the credit facility during the years ended December 31, 2016 and 2014. In addition, $265,000, $1.0 million and $761,000 of interest
was compounded and added to the balance of the Platinum Note during the years ended December 31, 2017, 2016 and 2015,
respectively. In accordance with the terms of a Section 16(b) Settlement Agreement, Platinum agreed to forgive interest owed on the
credit facility in an amount equal to 6%, effective July 1, 2016.

In connection with the closing of the Asset Sale to Cardinal Health 414, the Company repaid to PPCO an aggregate of approximately
$7.7 million in partial satisfaction of the Company’s liabilities, obligations and indebtedness under the Platinum Loan Agreement
between the Company and Platinum-Montaur, which were transferred by Platinum-Montaur to PPCO. The Company was informed
by PPVA that it was the owner of additional amounts owed on the Platinum-Montaur loan. PPVA claims a balance of approximately
$1.9 million was due upon closing of the Asset Sale. That amount is also subject to competing claims of ownership by Dr. Michael
Goldberg, the Company’s President and Chief Executive Officer. The Company has not yet paid the balance to anyone, as ownership
is subject to dispute.

F-26

On November 2, 2017, Platinum-Montaur commenced an action against the Company in the Supreme Court of the State of New
York, County of New York, seeking damages in the amount of $1,914,827.22 purportedly due as of March 3, 2017, plus interest
accruing thereafter. The claims asserted are for breach of contract and unjust enrichment in connection with funds received by the
Company under the Platinum Loan Agreement. Said action was removed to the United States District of New York on December 6,
2017. An initial pretrial conference was held on January 26, 2018. At the conference the Court stayed the deadline for the Company
to answer or otherwise respond to the complaint. The Court also directed the parties to engage in informal jurisdictional discovery and
a follow up status conference was held on March 9, 2018, during which the Court set a briefing schedule and determined that
Navidea’s motion to dismiss is due on April 6, 2018. The Court also referred the case to a settlement conference, which has been
scheduled for April 30, 2018. Because the funds sought by Platinum-Montaur are subject to claims of competing ownership, the
Company intends to defend itself in the action and seek a determination as to whether any funds are due and owing to the plaintiff.

Capital Royalty Partners II, L.P.

In May 2015, Navidea and MT, as guarantor, executed a Term Loan Agreement (the “CRG Loan Agreement”) with Capital Royalty
Partners II L.P. (“CRG”) in its capacity as a lender and as control agent for other affiliated lenders party to the CRG Loan Agreement
(collectively, the “Lenders”) in which the Lenders agreed to make a term loan to the Company in the aggregate principal amount of
$50.0 million (the “CRG Term Loan”), with an additional $10.0 million in loans to be made available upon the satisfaction of certain
conditions stated in the CRG Loan Agreement. Closing and funding of the CRG Term Loan occurred on May 15, 2015 (the “Effective
Date”). The principal balance of the CRG Term Loan bore interest from the Effective Date at a per annum rate of interest equal to
14.0%. Through March 31, 2019, the Company had the option of paying (i) 10.00% of the per annum interest in cash and (ii) 4.00% of
the per annum interest as compounded interest which is added to the aggregate principal amount of the CRG Term Loan. During 2016
and 2015, $553,000 and $1.3 million of interest was compounded and added to the balance of the CRG Term Loan. In addition, the
Company began paying the cash portion of the interest in arrears on June 30, 2015. Principal was due in eight equal quarterly
installments during the final two years of the term. All unpaid principal, and accrued and unpaid interest, was due and payable in full
on March 31, 2021.

Pursuant to a notice of default letter sent to Navidea by CRG in April 2016, the Company stopped compounding interest in the second
quarter of 2016 and began recording accrued interest. As of December 31, 2016 and 2015, $5.8 million and $0, respectively, of
accrued interest related to the CRG Term Loan is included in accrued liabilities and other on the consolidated balance sheets. As of
December 31, 2016 and 2015, the outstanding principal balance of the CRG Term Loan was $51.7 million and $51.3 million,
respectively.

In connection with the CRG Loan Agreement, the Company recorded a debt discount related to lender fees and other costs directly
attributable to the CRG Loan Agreement totaling $2.2 million, including a $1.0 million facility fee which is payable at the end of the
term or when the loan is repaid in full. A long-term liability was recorded for the $1.0 million facility fee. The debt discount was
being amortized as non-cash interest expense using the effective interest method over the term of the CRG Loan Agreement. As
further described below, the facility fee was fully paid off and the debt discount was accelerated and fully amortized in the second
quarter of 2016.

The CRG Term Loan was collateralized by a security interest in substantially all of the Company's assets. In addition, the CRG Loan
Agreement required that the Company adhere to certain affirmative and negative covenants, including financial reporting
requirements and a prohibition against the incurrence of indebtedness, or creation of additional liens, other than as specifically
permitted by the terms of the CRG Loan Agreement. The Lenders could accelerate the payment terms of the CRG Loan Agreement
upon the occurrence of certain events of default set forth therein, which include the failure of the Company to make timely payments
of amounts due under the CRG Loan Agreement, the failure of the Company to adhere to the covenants set forth in the CRG Loan
Agreement, and the insolvency of the Company. The covenants of the CRG Loan Agreement included a covenant that the Company
shall have EBITDA of no less than $5.0 million in each calendar year during the term or revenues from sales of Tc99m tilmanocept in
each calendar year during the term of at least $22.5 million in 2016, with the target minimum revenue increasing in each year
thereafter until reaching $45.0 million in 2020. However, if the Company were to fail to meet the applicable minimum EBITDA or
revenue target in any calendar year, the CRG Loan Agreement provided the Company a cure right if it raised 2.5 times the EBITDA
or revenue shortfall in equity or subordinated debt and deposited such funds in a separate blocked account. Additionally, the Company
was required to maintain liquidity, defined as the balance of unencumbered cash and permitted cash equivalent investments, of at least
$5.0 million during the term of the CRG Term Loan. The events of default under the CRG Loan Agreement also included a failure of
Platinum to perform its funding obligations under the Platinum Loan Agreement at any time as to which the Company had negative
EBITDA for the most recent fiscal quarter, as a result either of Platinum’s repudiation of its obligations under the Platinum Loan
Agreement, or the occurrence of an insolvency event with respect to Platinum. An event of default would entitle CRG to accelerate the
maturity of our indebtedness, increase the interest rate from 14% to the default rate of 18% per annum, and invoke other remedies
available to it under the loan agreement and the related security agreement.

F-27

During the course of 2016, CRG alleged multiple claims of default on the CRG Loan Agreement, and filed suit in the District Court of
Harris County, Texas on April 7, 2016. On June 22, 2016, CRG exercised control over one of the Company’s primary bank accounts
and took possession of $4.1 million that was on deposit, applying $3.9 million of the cash to various fees, including collection fees, a
prepayment premium and an end-of-term fee. The remaining $189,000 was applied to the principal balance of the debt. Multiple
motions, actions and hearings followed over the remainder of 2016 and into 2017.

On March 3, 2017, the Company entered into a Global Settlement Agreement with MT, CRG, and Cardinal Health 414 to effectuate
the terms of a settlement previously entered into by the parties on February 22, 2017. In accordance with the Global Settlement
Agreement, on March 3, 2017, the Company repaid the $59.0 million Deposit Amount of its alleged indebtedness and other
obligations outstanding under the CRG Term Loan. Concurrently with payment of the Deposit Amount, CRG released all liens and
security interests granted under the CRG Loan Documents and the CRG Loan Documents were terminated and are of no further force
or effect; provided, however, that, notwithstanding the foregoing, the Company and CRG agreed to continue with their proceeding
pending in the Texas Court to fully and finally determine the Final Payoff Amount. The Company and CRG further agreed that the
Final Payoff Amount would be no less than $47.0 million and no more than $66.0 million. In addition, concurrently with the payment
of the Deposit Amount and closing of the Asset Sale, (i) Cardinal Health 414 agreed to post a $7.0 million letter of credit in favor of
CRG (at the Company’s cost and expense to be deducted from the closing proceeds due to the Company, and subject to Cardinal
Health 414’s indemnification rights under the Purchase Agreement) as security for the amount by which the High Payoff Amount
exceeds the Deposit Amount in the event the Company is unable to pay all or a portion of such amount, and (ii) CRG agreed to post a
$12.0 million letter of credit in favor of the Company as security for the amount by which the Deposit Amount exceeds the Low
Payoff Amount. If, on the one hand, it is finally determined by the Texas Court that the amount the Company owes to CRG under the
Loan Documents exceeds the Deposit Amount, the Company will pay such excess amount, plus the costs incurred by CRG in
obtaining CRG’s letter of credit, to CRG and if, on the other hand, it is finally determined by the Texas Court that the amount the
Company owes to CRG under the Loan Documents is less than the Deposit Amount, CRG will pay such difference to the Company
and reimburse Cardinal Health 414 for the costs incurred by Cardinal Health 414 in obtaining its letter of credit. Any payments owing
to CRG arising from a final determination that the Final Payoff Amount is in excess of $59.0 million shall first be paid by the
Company without resort to the letter of credit posted by Cardinal Health 414, and such letter of credit shall only be a secondary
resource in the event of failure of the Company to make payment to CRG. The Company will indemnify Cardinal Health 414 for any
costs it incurs in payment to CRG under the settlement, and the Company and Cardinal Health 414 further agree that Cardinal Health
414 can pursue all possible remedies, including offset against earnout payments (guaranteed or otherwise) under the Purchase
Agreement, warrant exercise, or any other payments owed by Cardinal Health 414, or any of its affiliates, to the Company, or any of
its affiliates, if Cardinal Health 414 incurs any cost associated with payment to CRG under the settlement. The $2.0 million being held
in escrow pursuant to court order in the Ohio case and the $3.0 million being held in escrow pursuant to court order in the Texas case
were released to the Company at closing of the Asset Sale. On March 3, 2017, Cardinal Health 414 posted a $7.0 million letter of
credit, and on March 7, 2017, CRG posted a $12.0 million letter of credit, each as required by the Global Settlement Agreement.

The trial was held in Texas in December 2017. The Texas Court ruled that the Company’s total obligation to CRG is in excess of
$66.0 million, limited to $66.0 million under the Global Settlement Agreement. The Texas Court acknowledged only the $59.0
million payment made in March 2017, concluding that the Company owes CRG another $7.0 million, however the Texas Court did
not expressly take the Company’s June 2016 payment of $4.1 million into account. The Company believes that this $4.1 million
should be credited against the $7.0 million; CRG disagrees. On January 16, 2018, the Company filed an emergency motion to set
supersedeas bond and to modify judgment, describing the Texas Court’s oversight of not explaining how to apply the $4.1 million
payment, requesting that the judgment be modified to set the supersedeas amount at $2.9 million so that the Company can stay
enforcement of the judgment pending appeal. The Texas Court refused to rule on this motion, and the court of appeals entered an
order compelling the Texas Court to set a supersedeas amount. The Texas Court has scheduled a hearing on the issue for March 26,
2018, however it has not yet set the amount, and enforcement of the judgment is stayed until seven days after the Texas Court does
so. We currently await further action by the Texas Court. If we are ultimately required to pay an additional $7.0 million to CRG,
such payment would have a significant adverse effect on our financial position and would likely force us to curtail our planned
development activities. See Notes 2 and 16.

Oxford Finance, LLC

In March 2014, we executed a Loan and Security Agreement (the “Oxford Loan Agreement”) with Oxford Finance, LLC (“Oxford”),
providing for a loan to the Company of $30.0 million. Pursuant to the Oxford Loan Agreement, we issued Oxford: (1) Term Notes in
the aggregate principal amount of $30.0 million, bearing interest at 8.5% (the “Oxford Notes”), and (2) Series KK warrants to
purchase an aggregate of 391,032 shares of our common stock at an exercise price of $1.918 per share, expiring in March 2021 (the
“Series KK Warrants”). The Company recorded a debt discount related to the issuance of the Series KK Warrants and other fees to the
lenders totaling $3.0 million. Debt issuance costs directly attributable to the Oxford Loan Agreement, totaling $120,000, were
recorded as an additional debt discount on the consolidated balance sheet on the closing date. The debt discounts were being
amortized as non-cash interest expense using the effective interest method over the term of the Oxford Loan Agreement.

F-28

We began making monthly payments of interest only on April 1, 2014, and monthly payments of principal and interest beginning
April 1, 2015. In May 2015, in connection with the consummation of the CRG Loan Agreement, the Company repaid all amounts
outstanding under the Oxford Loan Agreement. The payoff amount of $31.7 million included payments of $289,000 as a pre-payment
fee and $2.4 million as an end-of-term final payment fee. The Series KK warrants remained outstanding as of December 31, 2017.

R-NAV, LLC

In July 2014, in connection with entering into the R-NAV joint enterprise, Navidea executed a promissory note in the principal
amount of $666,666, payable in two equal installments on July 15, 2015 and July 15, 2016, the first and second anniversaries of the R-
NAV transaction. The note bore interest at 0.31% per annum, compounded annually. A principal payment of $333,333 was made on
the note payable to R-NAV in July 2015.

Effective May 31, 2016, Navidea terminated its joint venture with R-NAV. Under the terms of the agreement, Navidea (1) transferred
all of its shares of R-NAV, consisting of 1,500,000 Series A Units and 3,500,000 Common Units, to R-NAV; and (2) paid $110,000 in
cash to R-NAV. In exchange, R-NAV (1) transferred all of its shares of TcRA to Navidea, thereby returning the technology licensed to
TcRA to Navidea; and (2) forgave the $333,333 remaining on the promissory note. Neither Navidea nor R-NAV has any further
obligations of any kind to either party. See Note 11.

IPFS Corporation

In December 2016, we prepaid $348,000 of insurance premiums through the issuance of a note payable to IPFS Corporation (“IPFS”)
with an interest rate of 8.99%. The note was payable in eight monthly installments of $45,000, with the final payment due in July
2017. The note was included in notes payable, current in the December 31, 2016 consolidated balance sheet.

In November 2017, we prepaid $396,000 of insurance premiums through the issuance of a note payable to IPFS with an interest rate of
4.0%. The note is payable in ten monthly installments of $40,000, with the final payment due in August 2018. The note is included in
notes payable, current in the December 31, 2017 consolidated balance sheet.

Summary

During the years ended December 31, 2017, 2016 and 2015, we recorded interest expense of $159,000, $5,000 and $1.3 million,
respectively, related to our notes payable. Of those amounts, $326,000 during the year ended December 31, 2015 was non-cash in
nature related to amortization of the debt discounts and deferred financing costs related to our notes payable. An additional $134,000
of this interest expense was compounded and added to the balance of our notes payable during the year ended December 31, 2017.

Interest expense in the amount of $1,706,491, $14,856,404 and $5,603,820 during the years ended December 31, 2017, 2016 and
2015, respectively, has been reclassified to discontinued operations. See Note 3.

Annual principal maturities of our notes payable are $2.4 million in 2018.

14. Terminated Lease Liability

Effective June 1, 2017, Navidea relocated its Dublin, Ohio headquarters from 5600 Blazer Parkway (“Blazer”) to a smaller space at
4995 Bradenton Avenue. The Company concurrently executed a sublease arrangement (“Sublease”) for the Blazer space because
there is no early termination provision in the Blazer lease. The Blazer lease and the Sublease end simultaneously in October 2022.

In accordance with current accounting guidance, the Company initially recorded a total liability of $1.0 million, which was equal to
the fair value of the remaining payments due under the Blazer Lease, net of the fair value of the payments to be received by the
Company under the Sublease, and including a finder’s fee. The Company also recorded a loss on contract termination of $399,000 and
a loss on disposal of assets, primarily leasehold improvements and furniture and fixtures, related to the Blazer space of $706,000. Both
losses are included in selling, general and administrative expenses for the year ended December 31, 2017.

F-29

A summary of the changes in our terminated lease liability during the year ended December 31, 2017 is presented below:

Total liability, June 1, 2017 (date of sublease)
Additional finder’s fees required by contract
Changes in estimated future payments
Payment of finder’s fees
Payments under Blazer lease
Receipts from subtenant
Accretion of liability
Total liability, December 31, 2017

15. Leases

Terminated
Lease
Liability

943,675
80,371
(29,917)
(188,187)
(329,880)
195,621
23,624
695,307

We currently lease approximately 5,000 square feet of office space at 4995 Bradenton Avenue, Dublin, Ohio, as our principal offices.
The current least term expires in June 2020, at a monthly base rent of approximately $3,000. We also lease approximately 2,000
square feet of office space at 560 Sylvan Avenue, Englewood Cliffs, New Jersey. The current lease term expires in March 2018, at a
monthly base rent of approximately $3,000.

In addition, we currently lease approximately 25,000 square feet of office space at 5600 Blazer Parkway, Dublin, Ohio, formerly our
principal offices. The current lease term expires in October 2022, at a monthly base rent of approximately $26,000 during 2018. In
June 2017, the Company executed a sublease arrangement for the Blazer space, providing for monthly sublease payments to Navidea
of approximately $39,000 through October 2022.

As of December 31, 2017, the future minimum lease payments for the years ending December 31 are as follows:

2018
2019
2020
2021
2022
Thereafter

Total future minimum lease payments

Operating
Leases

328,117
326,533
315,594
304,201
253,339
—
1,527,784

Total rental expense was $139,000, $187,000 and $217,000 for the years ended December 31, 2017, 2016 and 2015, respectively. See
Note 1(l).

16. Commitments and Contingencies

We are subject to legal proceedings and claims that arise in the ordinary course of business.

Sinotau Litigation – NAV4694

On August 31, 2015, Sinotau filed a suit for damages, specific performance, and injunctive relief against the Company in the U.S.
District Court for the District of Massachusetts alleging breach of a letter of intent for licensing to Sinotau of the Company’s
NAV4694 product candidate and technology. In September 2016, the Court denied the Company’s motion to dismiss. The Company
filed its answer to the complaint and the parties have filed multiple joint motions to stay the case pending settlement discussion, which
to date have been granted. On October 26, 2017, the Company executed a letter of intent with Sinotau and Cerveau, outlining a plan
to sublicense to Cerveau the worldwide rights to conduct research using NAV4694, as well as grant to Cerveau an exclusive license
for the development, marketing and commercialization of NAV4694 in Australia, Canada, China and Singapore. The letter of intent
includes a provision stating that Sinotau will release all claims in the Sinotau Litigation upon the parties’ execution of a definitive
agreement; the commercial rights agreement contemplated by the letter of intent would also include a release of such claims and a
covenant not to sue on such claims.

F-30

CRG Litigation

During the course of 2016, CRG alleged multiple claims of default on the CRG Loan Agreement, and filed suit in the District Court of
Harris County, Texas on April 7, 2016. On June 22, 2016, CRG exercised control over one of the Company’s primary bank accounts
and took possession of $4.1 million that was on deposit, applying $3.9 million of the cash to various fees, including collection fees, a
prepayment premium and an end-of-term fee. The remaining $189,000 was applied to the principal balance of the debt. Multiple
motions, actions and hearings followed over the remainder of 2016 and into 2017.

Concurrently with the payment of the Deposit Amount and closing of the Asset Sale, (i) Cardinal Health 414 posted a $7.0 million
letter of credit in favor of CRG (at the Company’s cost and expense to be deducted from the closing proceeds due to the Company,
and subject to Cardinal Health 414’s indemnification rights under the Purchase Agreement) as security for the amount by which the
High Payoff Amount exceeds the Deposit Amount in the event the Company is unable to pay all or a portion of such amount, and (ii)
CRG posted a $12.0 million letter of credit in favor of the Company as security for the amount by which the Deposit Amount exceeds
the Low Payoff Amount. If, on the one hand, it is finally determined by the Texas Court that the amount the Company owes to CRG
under the Loan Documents exceeds the Deposit Amount, the Company will pay such excess amount, plus the costs incurred by CRG
in obtaining CRG’s letter of credit, to CRG and if, on the other hand, it is finally determined by the Texas Court that the amount the
Company owes to CRG under the Loan Documents is less than the Deposit Amount, CRG will pay such difference to the Company
and reimburse Cardinal Health 414 for the costs incurred by Cardinal Health 414 in obtaining its letter of credit. Any payments owing
to CRG arising from a final determination that the Final Payoff Amount is in excess of $59.0 million shall first be paid by the
Company without resort to the letter of credit posted by Cardinal Health 414, and such letter of credit shall only be a secondary
resource in the event of failure of the Company to make payment to CRG. The Company will indemnify Cardinal Health 414 for any
costs it incurs in payment to CRG under the settlement, and the Company and Cardinal Health 414 further agree that Cardinal Health
414 can pursue all possible remedies, including offset against earnout payments (guaranteed or otherwise) under the Purchase
Agreement, warrant exercise, or any other payments owed by Cardinal Health 414, or any of its affiliates, to the Company, or any of
its affiliates, if Cardinal Health 414 incurs any cost associated with payment to CRG under the settlement. The $2.0 million being held
in escrow pursuant to court order in the Ohio case and the $3.0 million being held in escrow pursuant to court order in the Texas case
were released to the Company at closing of the Asset Sale.

The trial was held in Texas in December 2017. The Texas Court ruled that the Company’s total obligation to CRG is in excess of
$66.0 million, limited to $66.0 million under the Global Settlement Agreement. The Texas Court acknowledged only the $59.0
million payment made in March 2017, concluding that the Company owes CRG another $7.0 million, however the Texas Court did
not expressly take the Company’s June 2016 payment of $4.1 million into account. The Company believes that this $4.1 million
should be credited against the $7.0 million; CRG disagrees. On January 16, 2018, the Company filed an emergency motion to set
supersedeas bond and to modify judgment, describing the Texas Court’s oversight of not explaining how to apply the $4.1 million
payment, requesting that the judgment be modified to set the supersedeas amount at $2.9 million so that the Company can stay
enforcement of the judgment pending appeal. The Texas Court refused to rule on this motion, and the court of appeals entered an
order compelling the Texas Court to set a supersedeas amount. The Texas Court has scheduled a hearing on the issue for March 26,
2018, however it has not yet set the amount, and enforcement of the judgment is stayed until seven days after the Texas Court does
so. We currently await further action by the Texas Court.

Navidea’s management believes it is probable that the Company will be required to pay the $2.9 million modified judgment requested
in January 2018, and as such we accrued a loss contingency for that amount as a current liability on the December 31, 2017
consolidated balance sheet. The loss contingency of $2.9 million was recorded as an additional loss on extinguishment of the CRG
Term Loan on the consolidated statement of operations for the year ended December 31, 2017.

F-31

Former CEO Arbitration

On May 12, 2016 the Company received a demand for arbitration through the American Arbitration Association, Columbus, Ohio,
from Ricardo J. Gonzalez, the Company’s then Chief Executive Officer, claiming that he was terminated without cause and,
alternatively, that he resigned in accordance with Section 4G of his Employment Agreement pursuant to a notice received by the
Company on May 9, 2016. On May 13, 2016, the Company notified Mr. Gonzalez that his failure to undertake responsibilities
assigned to him by the Board of Directors and otherwise work after being ordered to do so on multiple occasions constituted an
effective resignation, and the Company accepted that resignation. The Company rejected the resignation of Mr. Gonzalez pursuant to
certain provisions in Section 4G of his Employment Agreement. Also, the Company notified Mr. Gonzalez that, alternatively, his
failure to return to work after the expiration of the cure period provided in his Employment Agreement constituted cause for his
termination under his Employment Agreement. Mr. Gonzalez was seeking severance and other amounts claimed to be owed to him
under his Employment Agreement. In response, the Company filed counterclaims against Mr. Gonzalez alleging malfeasance by Mr.
Gonzalez in his role as Chief Executive Officer. Mr. Gonzalez withdrew his claim for additional severance pursuant to his
Employment Agreement, and the Company withdrew its counterclaims. On May 12, 2017, the Company received a ruling in favor of
Mr. Gonzalez finding that he was terminated by the Company without cause on April 7, 2016. Mr. Gonzalez was awarded salary,
bonus, and benefits in the aggregate amount of $481,039 plus interest, attorneys’ fees, and other costs. The arbitration award is final
and binding on the parties. The Company paid an aggregate of $617,880 to Mr. Gonzalez on May 16, 2017.

FTI Consulting, Inc. Litigation

On October 11, 2016, FTI Consulting, Inc. (“FTI”) commenced an action against the Company in the Supreme Court of the State of
New York, County of New York, seeking damages in excess of $782,600 comprised of: (i) $730,264 for investigative and consulting
services FTI alleges to have provided to the Company pursuant to an Engagement Agreement between FTI and the Company, and (ii)
in excess of $52,337 for purported interest due on unpaid invoices, plus attorneys’ fees, costs and expenses. On November 14, 2016,
the Company filed an Answer and Counterclaim denying the allegations of the Complaint and seeking damages on its Counterclaim,
in an amount to be determined at trial, for intentional overbilling by FTI. On February 7, 2017, a preliminary conference was held by
the Court at which time a scheduling order governing discovery was issued. On June 26, 2017, the Company and FTI entered into a
settlement agreement. According to FTI, as of June 2017, FTI was owed $862,165 including interest charges and legal fees. Under the
terms of the settlement agreement, the Company paid an aggregate of $435,000 to FTI on June 30, 2017.

Sinotau Litigation – Tc99m Tilmanocept

On February 1, 2017, Navidea filed suit against Sinotau in the U.S. District Court for the Southern District of Ohio. The Company's
complaint included claims seeking a declaration of the rights and obligations of the parties to an agreement regarding rights for the
Tc99m tilmanocept product in China and other claims. The complaint sought a temporary restraining order (“TRO”) and preliminary
injunction to prevent Sinotau from interfering with the Company’s Asset Sale to Cardinal Health 414. On February 3, 2017, the Court
granted the TRO and extended it until March 6, 2017. The Asset Sale closed on March 3, 2017. On March 6, the Court dissolved the
TRO as moot. Sinotau also filed a suit against the Company and Cardinal Health 414 in the U.S. District Court for the District of
Delaware on February 2, 2017. On July 12, 2017, the District of Delaware case was transferred to the Southern District of Ohio. On
July 27, 2017 the Ohio Court determined that both cases in the Southern District of Ohio are related and the case was stayed for 60
days pending settlement discussions. On February 8, 2018, Navidea and Sinotau executed an amendment to the agreement, modifying
certain terms of the agreement and effectively resolving the legal dispute. On February 17, 2018, Navidea and Sinotau executed a
Settlement Agreement and Mutual Release, and on February 20, 2018, Navidea and Sinotau voluntarily dismissed their legal cases.

Platinum-Montaur Life Sciences LLC

On November 2, 2017, Platinum-Montaur commenced an action against the Company in the Supreme Court of the State of New
York, County of New York, seeking damages in the amount of $1,914,827.22 purportedly due as of March 3, 2017, plus interest
accruing thereafter. The claims asserted are for breach of contract and unjust enrichment in connection with funds received by the
Company under the Platinum Loan Agreement (discussed above). Said action was removed to the United States District of New York
on December 6, 2017. An initial pretrial conference was held on January 26, 2018. At the conference the Court stayed the deadline
for the Company to answer or otherwise respond to the complaint. The Court also directed the parties to engage in informal
jurisdictional discovery and a follow up status conference was held on March 9, 2018, during which the Court set a briefing schedule
and determined that Navidea’s motion to dismiss is due on April 6, 2018. The Court also referred the case to a settlement conference,
which has been scheduled for April 30, 2018. Because the funds sought by Platinum-Montaur are subject to claims of competing
ownership, the Company intends to defend itself in the action and seek a determination as to whether any funds are due and owing to
the plaintiff.

In accordance with ASC Topic 450, Contingencies, we make a provision for a liability when it is both probable that a liability has been
incurred and the amount of the loss can be reasonably estimated. Although the outcome of any litigation is uncertain, in our opinion,
the amount of ultimate liability, if any, with respect to these actions, other than the CRG litigation for which we have accrued a
contingent liability, will not materially affect our financial position.

F-32

17. Preferred Stock

In August 2015, we entered into a Securities Exchange Agreement with two investment funds managed by Platinum to exchange 4,519
shares of Series B Preferred Stock held by Platinum for twenty-year warrants to purchase 14,777,130 shares of common stock of the
Company at $0.01 per share (the “Series LL warrants”). The Series B Preferred Stock was convertible into common stock at a
conversion rate of 3,270 shares of common stock per share of Series B Preferred Stock resulting in an aggregate number of shares of
common stock into which the Series B Preferred Stock was convertible of 14,777,130 shares. There was no other consideration paid
or received for the exchange. No gain or loss was recognized in our consolidated financial statements as a result of the exchange. The
exchange transaction was entered into in connection with the filing of an application to list the Company’s common stock on the Tel
Aviv Stock Exchange (“TASE”) in order to comply with a listing requirement of the TASE that listed companies have only one class
of equity securities issued and outstanding. Following the exchange, the Company has no shares of preferred stock outstanding.

18. Equity Instruments

a. Stock Warrants: At December 31, 2017, there are 16.9 million warrants outstanding to purchase our common stock. The

warrants are exercisable at prices ranging from $0.01 to $3.04 per share with a weighted average exercise price per share of
$1.19.

The following table summarizes information about our outstanding warrants at December 31, 2017:

Series BB
Series HH
Series II
Series KK
Series LL
Series MM
Series MM
Series NN

Total warrants

Exercise
Price

Number of
Warrants

2.00
2.49
3.04
1.918
0.01
2.50
2.50
1.50
1.19 *

300,000
301,205
275,000
391,032
4,365,280
150,000
150,000
11,000,000
16,932,517

Expiration Date
July 2018
June 2023
June 2018
March 2021
August 2035
September 2019
October 2019
March 2022

* Weighted average exercise price.

In addition, at December 31, 2017, there are 300 warrants outstanding to purchase MT Common Stock. The warrants are
exercisable at $2,000 per share.

In July 2015, we extended the expiration date of our outstanding Series BB warrants by three years to July 2018. The
modification of the Series BB warrant expiry resulted in recording a non-cash selling, general and administrative expense of
approximately $150,000 during the third quarter of 2015.

In September 2015, we issued four-year Series MM warrants to purchase 150,000 shares of our common stock at an exercise price
of $2.50 per share pursuant to an advisory services agreement with Chardan Capital Markets, LLC (“Chardan”). In October 2015,
we issued additional four-year Series MM warrants to purchase 150,000 shares of our common stock at an exercise price of $2.50
per share pursuant to the advisory services agreement with Chardan. The fair value of the warrants issued to Chardan of $256,000
was recorded as a non-cash selling, general and administrative expense during the third quarter of 2015.

In October 2015, 5,000,000 Series LL warrants were exercised on a cashless basis in exchange for the issuance of 4,977,679
shares of our common stock. In January 2017, 5,411,850 Series LL warrants were exercised in exchange for the issuance of
5,411.850 shares of our common stock, resulting in gross proceeds to the Company of $54,119.

In March 2017, in connection with the Asset Sale, the Company granted to each of Cardinal Health 414 and UCSD, a five-year
Series NN warrant to purchase up to 10 million shares and 1 million shares, respectively, of the Company’s common stock at an
exercise price of $1.50 per share, each of which warrant is subject to anti-dilution and other customary terms and conditions.

c. Common Stock Reserved: As of December 31, 2017, we have reserved 20,620,196 shares of authorized common stock for the

exercise of all outstanding stock options and warrants.

F-33

19. Reductions in Force

In March 2015, the Company initiated a reduction in force that included seven staff members and three executives. The executives
continued as employees during transition periods of varying lengths, depending upon the nature and extent of responsibilities
transitioned or wound down. During the year ended December 31, 2015, the Company recognized approximately $1.3 million of net
expense as a result of the reduction in force, which included actual and estimated separation costs as well as the impact of accelerated
vesting or forfeiture of certain equity awards resulting from the separation of $273,000.

There are no accrued separation costs remaining as of December 31, 2017 or 2016.

20. Income Taxes

As of December 31, 2017 and 2016, our deferred tax assets (“DTAs”) were approximately $39.7 million and $79.1 million,
respectively. The components of our deferred tax assets are summarized as follows:

Deferred tax assets:

Net operating loss carryforwards
R&D credit carryforwards
AMT credit carryforward
Stock compensation
Intangibles
Gain/loss from discontinued operations
Temporary differences

Deferred tax assets before valuation allowance
Valuation allowance
Net deferred tax assets

As of December 31,

2017

2016

29,570,581 $
10,043,714
1,229,979
576,024
591,651
(2,510,699)
207,447
39,708,697
(38,478,718)
1,229,979 $

66,150,646
9,729,673
—
1,368,458
1,720,761
—
132,476
79,102,014
(79,102,014)
—

Current accounting standards require a valuation allowance against DTAs if, based on the weight of available evidence, it is more
likely than not that some or all of the DTAs may not be realized. Due to the uncertainty surrounding the realization of these DTAs in
future tax returns, all of the DTAs have been fully offset by a valuation allowance at December 31, 2017 and 2016 except the
alternative minimum tax (“AMT”) credit carryforward amount described below.

In assessing the realizability of DTAs, management considers whether it is more likely than not that some portion or all of the DTAs
will not be realized. The ultimate realization of DTAs is dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities
(including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in
making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods
in which the DTAs are deductible, management believes it is more likely than not that the Company will not realize the benefits of
these deductible differences or tax carryforwards as of December 31, 2017 except for the AMT credit carryforward.

The Tax Cuts and Jobs Act (the “Tax Act”) was signed into law on December 22, 2017. The Tax Act reduces the U.S. federal
corporate tax rate from 35% to 21%, effective January 1, 2018. Consequently, we have recorded a decrease related to DTAs of $26.4
million with a corresponding net adjustment to a valuation allowance of $26.4 million for the year ended December 31, 2017. The
impact of many provisions of the Tax Act lack clarity and is subject to interpretation until additional IRS guidance is issued. The
ultimate impact of the Tax Act may differ from the Company’s estimates due to changes in the interpretations and assumptions made
as well as any forthcoming regulatory guidance.

The Tax Act repeals the AMT for corporations, and permits any existing AMT credit carryforwards to be used to reduce the regular
tax obligation in 2018, 2019 and 2020. Companies may continue using AMT credits to offset any regular income tax liability in years
2018 through 2020, with 50 percent of remaining AMT credits refunded in each of the 2018, 2019 and 2020 tax years, and all
remaining credits refunded in tax year 2021. This results in full realization of an existing AMT credit carryforward irrespective of
future taxable income. Accordingly, the Company recorded AMT credit carryforwards of $1.2 million in other noncurrent assets in
the consolidated balance sheet as of December 31, 2017.

As of December 31, 2017 and 2016, we had U.S. net operating loss carryforwards of approximately $131.8 million and $193.3
million, respectively. Of those amounts, $15.3 million relates to stock-based compensation tax deductions in excess of book
compensation expense (“APIC NOLs”) as of December 31, 2016, that will be credited to additional paid-in capital when such
deductions reduce taxes payable as determined on a "with-and-without" basis. Accordingly, these APIC NOLs will reduce federal
taxes payable if realized in future periods, but NOLs related to such benefits are not included in the table above. As of December 31,
2017, we adopted ASU 2016-09 and as such eliminated all APIC NOLs with a full offset to a valuation allowance.

F-34

As of December 31, 2017 and 2016, we also had state net operating loss carryforwards of approximately $20.4 million and $28.2
million, respectively. The state net operating loss carryforwards will begin expiring in 2032.

At December 31, 2017 and 2016, we had U.S. R&D credit carryforwards of approximately $9.7 million and $9.4 million, respectively.

There were no expirations of U.S. net operating loss carryforwards or R&D credit carryforwards during 2017 or 2016. The details of
our U.S. net operating loss and federal R&D credit carryforward amounts and expiration dates are summarized as follows:

Generated
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Total carryforwards

Expiration
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037

As of December 31, 2017
U.S. Net
Operating
Loss
Carryforwards

U.S. R&D
Credit
Carryforwards
1,173,387
130,359
71,713
39,128
5,350
2,905
22,861
218,332
365,541
342,898
531,539
596,843
1,094,449
1,950,744
468,008
681,772
816,116
492,732
262,257
387,892
9,654,826

— $
—
—
—
—
—
—
—
—
—
—
—
—
—
19,577,479
37,450,522
34,088,874
25,073,846
15,581,209
—
131,771,930 $

During the years ended December 31, 2017, 2016 and 2015, Cardiosonix recorded losses for financial reporting purposes of $5,000,
$13,000 and $11,000, respectively. As of December 31, 2016, Cardiosonix had tax loss carryforwards in Israel of approximately $7.7
million. Under Israeli tax law, net operating loss carryforwards do not expire. Due to the uncertainty surrounding the realization of the
related deferred tax assets in future tax returns and the Company’s intent to dissolve Cardiosonix in the near term, all of the deferred
tax assets were fully offset by a valuation allowance at December 31, 2016. Cardiosonix was legally dissolved in September 2017 and
as such we eliminated all tax loss carryforwards with a full offset to a valuation allowance.

Under Sections 382 and 383 of the IRC of 1986, as amended, the utilization of U.S. net operating loss and R&D tax credit
carryforwards may be limited under the change in stock ownership rules of the IRC. The Company completed a Section 382 analysis
in 2017 and does not believe a Section 382 ownership change has occurred since then that would impact utilization of the Company’s
net operating loss and R&D tax credit carryforwards.

F-35

Reconciliations between the statutory federal income tax rate and our effective tax rate for continuing operations are as follows:

2017

Years Ended December 31,
2016

2015

Amount
$ (6,048,423)

Amount
(34.0)% $ (2,508,264)

Amount
(34.0)% $ (7,835,163)

(34.0)%

(26,080,051)

(146.6)%

2,354,656

31.9%

8,212,163

35.7%

(291,745)
—
28,731,045

(1.6)%
0.0%
161.5%

(239,049)
188,060
—

(3.2)%
2.5%
0.0%

(612,087)
438,007
—

(373,315)

(2.2)%

204,597

2.8%

(202,920)

$ (4,062,489)

—

(2.7)%
1.9%
0.0%

(0.9)%

Benefit at statutory rate
Adjustments to valuation
allowance
Adjustments to R&D
credit carryforwards
Disqualified debt interest
Tax law changes
Permanent items and
other
Provision per financial
statements

See Note 1(p).

21. Segments

We report information about our operating segments using the “management approach” in accordance with current accounting
standards. This information is based on the way management organizes and reports the segments within the enterprise for making
operating decisions and assessing performance. Our reportable segments are identified based on differences in products, services and
markets served. There were no inter-segment sales. We manage our business based on two primary types of drug products: (i)
diagnostic substances, including Tc99m tilmanocept and other diagnostic applications of our Manocept platform, our R-NAV joint
venture (terminated on May 31, 2016), NAV4694 and NAV5001 (license terminated in April 2015), and (ii) therapeutic development
programs, including therapeutic applications of our Manocept platform and all development programs undertaken by Macrophage
Therapeutics, Inc.

The information in the following tables is derived directly from each reportable segment ’s financial reporting. Certain revenue and
expense amounts in the years ended December 31, 2017, 2016 and 2015 have been reclassified to discontinued operations. See Note 3.

Year Ended December 31, 2017
Tc99m tilmanocept sales revenue:

United States
International

Tc99m tilmanocept license revenue
Tc99m tilmanocept royalty revenue
Grant and other revenue
Total revenue
Cost of goods sold
Research and development expenses, excluding depreciation

and amortization

Selling, general and administrative expenses, excluding

depreciation and amortization (a)
Depreciation and amortization (b)

Loss from operations (c)
Other income (expense) (d)
Benefit from income taxes
Loss from continuing operations
Income from discontinued operations, net of tax effect
Net income (loss)
Total assets, net of depreciation and amortization:

Diagnostics Therapeutics Corporate

Total

— $
—
100,000
9,126
1,506,232
1,615,358
3,651

— $
—
—
—
195,079
195,079
—

— $
—
—
—
—
—
—

—
—
100,000
9,126
1,701,311
1,810,437
3,651

3,784,255

729,587

—

4,513,842

—

34,484 10,895,301 10,929,785

—
(2,172,548)
—
496,127
(1,676,421)
88,673,053
86,996,632

—

240,166

(568,992) (11,135,467) (13,877,007)
(3,912,679)
(3,912,679)
—
129,936
4,062,489
3,436,426
(439,056) (11,611,720) (13,727,197)
— 88,673,053
(439,056) (11,611,720) 74,945,856

—

United States
International
Capital expenditures

$ 13,065,871 $
30,476
—

49,001 $
—
—

7,634,237 $ 20,749,109
32,327
33,690

1,851
33,690

F-36

Year Ended December 31, 2016
Tc99m tilmanocept sales revenue:

United States
International

Tc99m tilmanocept license revenue
Grant and other revenue
Total revenue
Cost of goods sold, excluding depreciation and amortization
Research and development expenses, excluding depreciation

Diagnostics Therapeutics Corporate

Total

— $
39,601
1,795,625
3,011,642
4,846,868
62,260

— $
—
—
124,766
124,766
—

— $
—
—
—
—
—

—
39,601
1,795,625
3,136,408
4,971,634
62,260

and amortization

6,375,929

762,151

—

7,138,080

Selling, general and administrative expenses, excluding

depreciation and amortization (a)
Depreciation and amortization (b)
Loss from operations (c)
Other income (expense), excluding equity in the loss of R-

NAV, LLC (d)

Equity in the loss of R-NAV, LLC
Loss from continuing operations
Loss from discontinued operations, net of tax effect
Net loss
Total assets, net of depreciation and amortization:

United States
International
Capital expenditures

Year Ended December 31, 2015
Tc99m tilmanocept sales revenue:

United States
International

Tc99m tilmanocept license revenue
Grant and other revenue
Total revenue
Cost of goods sold, excluding depreciation and amortization
Research and development expenses, excluding depreciation

—
56,317
(1,647,638)

63,158
—
(700,543)

7,403,329
397,232

7,466,487
453,549
(7,800,561) (10,148,742)

—
—
(1,647,638)
(6,931,137)
(8,578,775)

—
—
(700,543)
—
(700,543)

2,786,007
(15,159)
(5,029,713)
—

2,786,007
(15,159)
(7,377,894)
(6,931,137)
(5,029,713) (14,309,031)

3,815,271 $
131,752
—

15,075 $
—
—

8,498,797 $ 12,329,143
132,533
1,847

781
1,847

Diagnostics Therapeutics Corporate

Total

— $
19,075
1,133,333
1,860,953
3,013,361
3,226

— $
—
—
—
—
—

—
19,075
1,133,333
1,860,953
3,013,361
3,226

and amortization

9,831,834

730,895

— 10,562,729

Selling, general and administrative expenses, excluding

depreciation and amortization (a)

Depreciation and amortization (b)
Loss from operations (c)
Other income (expense), excluding equity in the loss of R-

NAV, LLC (d)

Equity in the loss of R-NAV, LLC
Loss from continuing operations
Income (loss) from discontinued operations, net of tax effect

(e)
Net loss
Total assets, net of depreciation and amortization:

United States
International
Capital expenditures

—
232,091
(7,053,790)

123,884 10,242,066 10,365,950
522,196
290,105

—

(854,779) (10,532,171) (18,440,740)

—
—
(7,053,790)

—
—

(4,298,604)
(4,298,604)
(305,253)
(305,253)
(854,779) (15,136,028) (23,044,597)

(5,713,598)
(12,767,388)

—

(4,518,938)
1,194,660
(854,779) (13,941,368) (27,563,535)

4,161,029 $
410,666
26,589

— $ 10,391,805 $ 14,552,834
411,679
1,013
—
39,001
12,412
—

F-37

(a) General and administrative expenses, excluding depreciation and amortization, represent costs that relate to the general

administration of the Company and as such are not currently allocated to our individual reportable segments. Marketing and
selling expenses are allocated to our individual reportable segments.

(b) Depreciation and amortization is reflected in research and development ($0, $0 and $10,617 for the years ended December 31,
2017, 2016 and 2015, respectively), and selling, general and administrative expenses ($240,166, $397,232 and $460,839 for the
years ended December 31, 2017, 2016 and 2015, respectively).

(c) Loss from operations does not reflect the allocation of certain selling, general and administrative expenses, excluding

depreciation and amortization, to our individual reportable segments.

(d) Amounts consist primarily of interest income, interest expense, changes in fair value of financial instruments, and losses on debt

extinguishment, which are not currently allocated to our individual reportable segments.

(e) Amount not allocated to a reportable segment represents contingent consideration recognized related to 2015 GDS Business

revenue royalties pursuant to the 2011 sale of the GDS Business to Devicor, net of tax effect. See Note 1(a).

22. Agreements

a. Supply Agreements: In November 2009, we entered into a manufacture and supply agreement with Reliable Biopharmaceutical

Corporation (“Reliable”) for the manufacture and supply of the Tc99m tilmanocept drug substance. The initial ten-year term of
the agreement expires in November 2019, with options to extend the agreement for successive three-year terms. Either party had
the right to terminate the agreement upon mutual written agreement, or upon material breach by the other party if not cured
within 60 days from the date of written notice of the breach. Total purchases under the manufacture and supply agreement were
$0, $1.1 million and $225,000 for the years ended December 31, 2017, 2016 and 2015, respectively. Upon closing of the Asset
Sale to Cardinal Health 414, our contract and open purchase order with Reliable were transferred to Cardinal Health 414.

In May 2013, we entered into a clinical supply agreement with Nordion (Canada), Inc. (“Nordion”) for the manufacture and
supply of NAV5001 clinical trial material. The initial three-year term expired in May 2016. In August 2014, in connection with
the Company’s decision to refocus its resources, the Nordion agreement was amended to provide for a suspension period during
which the Company was to pay a monthly fee to maintain production space at Nordion’s facility until such time as manufacture
resumed. The Nordion agreement was terminated in March 2016. Total purchases under the clinical supply agreement were $0,
$43,000 and $244,000 for the years ended December 31, 2017, 2016 and 2015, respectively.

In August 2013, we entered into a manufacturing services agreement with PETNET Solutions, Inc. (“PETNET”) for the
manufacture and distribution of NAV4694. The initial three-year term of the agreement expired in August 2016 and the
agreement was not renewed. Total purchases under the manufacturing agreement were $0, $826,000 and $855,000 for the years
ended December 31, 2017, 2016 and 2015, respectively.

In September 2013, we entered into a manufacturing services agreement with OSO BioPharmaceuticals Manufacturing, LLC
(“OsoBio”) for contract pharmaceutical development, manufacturing, packaging and analytical services for Tc99m tilmanocept.
Either party had the right to terminate the agreement upon mutual written agreement, or upon material breach by the other party if
not cured within 60 days from the date of written notice of the breach. During the term of agreement, OsoBio was the primary
supplier of manufacturing services for Tc99m tilmanocept. In consideration for these services, the Company paid a unit pricing
fee. In addition, the Company also paid OsoBio a fee for regulatory and other support services. Total purchases under the
manufacturing services agreement were $250,000, $1.2 million and $472,000 for the years ended December 31, 2017, 2016 and
2015, respectively. Upon closing of the Asset Sale to Cardinal Health 414, our contract and open purchase orders with OsoBio
were transferred to Cardinal Health 414.

Also in September 2013, we completed a service and supply master agreement with Gipharma S.r.l. (“Gipharma”) for process
development, manufacturing and packaging of reduced-mass vials to be sold in the EU. The agreement had an initial term of three
years and automatically renewed for an additional one-year periods. In consideration for these services, the Company paid fees as
defined in the agreement. Total purchases under the service and supply master agreement were $14,000, $149,000 and $677,000
for the years ended December 31, 2017, 2016 and 2015, respectively. Following the transfer of the Tc99m tilmanocept Marketing
Authorization to SpePharm, our contract with Gipharma was transferred to SpePharm.

b. Research and Development Agreements In January 2002, we completed a license agreement with UCSD for the exclusive
world-wide rights to Tc99m tilmanocept. The license agreement was effective until the later of the expiration date of the
longest-lived underlying patent. In July 2014, we amended the license agreement to extend the agreement until the third
anniversary of the expiration date of the longest-lived underlying patent. Under the terms of the license agreement, UCSD
granted us the exclusive rights to make, use, sell, offer for sale and import licensed products as defined in the agreement and to
practice the defined licensed methods during the term of the agreement. We could also sublicense the patent rights, subject to
certain sublicense terms as defined in the agreement. In consideration for the license rights, we agreed to pay UCSD a license
issue fee of $25,000 and license maintenance fees of $25,000 per year. We also agreed to make payments to UCSD upon
successfully reaching certain clinical, regulatory and cumulative sales milestones, and a royalty on net sales of licensed products
subject to a $25,000 minimum annual royalty. In addition, we agreed to reimburse UCSD for all patent-related costs and to meet
certain diligence targets. Total costs related to the UCSD license agreement for net sales and royalties of Tc99m tilmanocept
outside the Territory were $4,000, $2,000 and $1,000 in 2017, 2016 and 2015, respectively. Royalties on net sales of Tc99m
tilmanocept outside the Territory were recorded in cost of goods sold.

F-38

In connection with the March 2017 closing of the Asset Sale to Cardinal Health 414, the Company amended and restated its
Tc99m tilmanocept license agreement with UCSD pursuant to which UCSD granted a license to the Company to exploit certain
intellectual property rights owned by UCSD and, separately, Cardinal Health 414 entered into a license agreement with UCSD
pursuant to which UCSD granted a license to Cardinal Health 414 to exploit certain intellectual property rights owned by UCSD
for Cardinal Health 414 to sell the Product in the Territory. Pursuant to the Purchase Agreement, the Company granted to UCSD a
five (5)-year warrant to purchase up to 1 million shares of the Company’s common stock, par value $.001 per share, at an exercise
price of $1.50 per share.

In July 2014, the Company executed an expanded license agreement for the exclusive world-wide rights to all diagnostic and
therapeutic uses of tilmanocept (other than Tc99m tilmanocept). The license agreement is effective until the third anniversary of
the expiration date of the longest-lived underlying patent. Under the terms of the license agreement, UCSD has granted us the
exclusive rights to make, use, sell, offer for sale and import licensed products as defined in the agreement and to practice the
defined licensed methods during the term of the agreement. We may also sublicense the patent rights, subject to certain
sublicense terms as defined in the agreement. As consideration for the license rights, we agreed to pay UCSD a license issue fee
of $25,000 and license maintenance fees of $25,000 per year. We also agreed to make payments to UCSD upon successfully
reaching certain clinical, regulatory and cumulative sales milestones, and a royalty on net sales of licensed products subject to a
$25,000 minimum annual royalty. In addition, we agreed to reimburse UCSD for all patent-related costs and to meet certain
diligence targets. Total costs related to the UCSD license agreement for tilmanocept were $253,000, $199,000 and $152,000 in
2017, 2016 and 2015, respectively, and were recorded in research and development expenses.

In December 2011, we executed a license agreement with AstraZeneca AB for NAV4694, a proprietary compound that is
primarily intended for use in diagnosing Alzheimer’s disease and other CNS disorders. The license agreement is effective until
the later of the tenth anniversary of the first commercial sale of NAV4694 or the expiration of the underlying patents. Under the
terms of the license agreement, AstraZeneca granted us an exclusive worldwide royalty-bearing license for NAV4694 with the
right to grant sublicenses. In consideration for the license rights, we paid AstraZeneca a license issue fee of $5.0 million upon
execution of the agreement. We also agreed to pay AstraZeneca up to $6.5 million in contingent milestone payments based on the
achievement of certain clinical development and regulatory filing milestones, and up to $11.0 million in contingent milestone
payments due following receipt of certain regulatory approvals and the initiation of commercial sales of the licensed product. In
addition, we agreed to pay AstraZeneca a royalty on net sales of licensed and sublicensed products. Total costs (adjustments)
related to the AstraZeneca license agreement were $(70,000), $116,000 and $80,000 in 2017, 2016 and 2015, respectively, and
were recorded in research and development expenses.

In July 2012, we entered into an agreement with Alseres to sublicense NAV5001, an Iodine-123 radiolabeled imaging agent being
developed as an aid in the diagnosis of Parkinson’s disease and other movement disorders, with a potential use as a diagnostic aid
in dementia. Under the terms of the sublicense agreement, Alseres granted Navidea an exclusive, worldwide sublicense to
research, develop and commercialize NAV5001. The terms of the agreement required Navidea to make a one-time sublicense
execution payment to Alseres equal to (i) $175,000 in cash and (ii) 300,000 shares of our common stock. The sublicense
agreement also provided for contingent milestone payments of up to $2.9 million, $2.5 million of which would have principally
occurred at the time of product registration or upon commercial sales, and the issuance of up to an additional 1.15 million shares
of Navidea common stock, 950,000 shares of which would have been issuable at the time of product registration or upon
commercial sales. In addition, the sublicense terms anticipated royalties on annual net sales of the approved product which were
consistent with industry-standard terms and certain sublicense extension fees, payable in cash and shares of common stock, in the
event certain diligence milestones were not met. In April 2015, the Company entered into an agreement with Alseres to terminate
the Alseres sublicense agreement. Under the terms of this agreement, Navidea transferred all regulatory, clinical and
manufacturing-related data related to NAV5001 to Alseres. Alseres agreed to reimburse Navidea for any incurred maintenance
costs of the contract manufacturer retroactive to March 1, 2015. In addition, Navidea has supplied clinical support services for
NAV5001 on a cost-plus reimbursement basis. However, to this point, Alseres has been unsuccessful in raising the funds
necessary to restart the program and reimburse Navidea. As a result, we have taken steps to end our obligations under the
agreement and notified Alseres that we consider them in breach of the agreement. To date, we have not been successful in our
efforts to recover the funds we expended complying with our obligations under the termination agreement. Total costs related to
the Alseres sublicense agreement were $0, $0 and $5,000 in 2017, 2016 and 2015, respectively, and were recorded in research and
development expenses.

F-39

c. Employment Agreements: As of December 31, 2017, we had an employment agreement with one of our senior officers. In

addition, although certain other employment agreements expired on or before December 31, 2017, the terms of the agreements
provide for continuation of certain terms of the employment agreements as long as the senior officers continue to be employees
of the Company following expiration of the agreements. The employment agreements contain termination and/or change in
control provisions that would entitle each of the officers to 1.3 to 3.0 times their annual salaries, vest outstanding restricted stock
and options to purchase common stock, and continue certain benefits if there is a termination without cause or change in control
of the Company (as defined) and their employment terminates. As of December 31, 2017, our maximum contingent liability
under these agreements in such an event is approximately $2.5 million. The employment agreements generally also provide for
severance, disability and death benefits.

23. Employee Benefit Plan

We maintain an employee benefit plan under Section 401(k) of the IRC. The plan allows employees to make contributions and we
may, but are not obligated to, match a portion of the employee’s contribution with our common stock, up to a defined maximum. We
also pay certain expenses related to maintaining the plan. We recorded expenses related to our 401(k) plan of $12,000, $47,000 and
$73,000 during 2017, 2016 and 2015, respectively.

24. Supplemental Disclosure for Statements of Cash Flows

During 2017, 2016 and 2015, we paid interest aggregating $7.4 million, $5.5 million and $4.6 million, respectively. Interest paid
during 2016 included collection fees of $778,000 and a prepayment premium of $2.1 million, both of which were withdrawn by CRG
from a bank account under their control. During 2017, we issued 1 million Series NN warrants to UCSD with an estimated fair value
of $334,000. During 2017, 2016, and 2015, we issued 105,308, 67,002 and 68,157 shares of our common stock, respectively, as
matching contributions to our 401(k) Plan which were valued at $54,000, $121,000 and $117,000, respectively. In November 2017,
we prepaid $396,000 of insurance premiums through the issuance of a note payable to IPFS with an interest rate of 4.0%. In December
2016, we prepaid $348,000 of insurance premiums through the issuance of a note payable to IPFS with an interest rate of 8.99%.
During 2015, we recorded $1.0 million of end-of-term fees associated with our notes payable to CRG.

As discussed in Note 10, the liability for the additional $200,000 of investments made by Platinum was reclassified to additional paid-
in-capital in January 2017. In connection with their initial investment in March 2015, the investors in MT were issued warrants that
have been determined to be derivative liabilities with an estimated fair value of $63,000. A $46,000 deemed dividend related to the
beneficial conversion feature within the MT Preferred Stock was also recorded at the time of the initial investment in MT.

F-40

25. Selected Quarterly Financial Data (Unaudited)

Quarterly financial information for fiscal 2017 and 2016 are presented in the following table, in thousands, except per share data.
Certain revenue and expense amounts in the years ended December 31, 2017 and 2016 have been reclassified to discontinued
operations. See Note 3.

2017:
Tc99m tilmanocept sales revenue
Tc99m tilmanocept license revenue
Tc99m tilmanocept royalty revenue
Grant and other revenue
Gross profit
Operating expenses
Loss from operations
Loss before income taxes
Benefit from (provision for) income taxes
Loss from continuing operations
Gain (loss) from discontinued operations, net of tax
Net income (loss) attributable to common stockholders
Loss per common share (basic) (1):

Continuing operations
Discontinued operations
Attributable to common stockholders

Loss per common share (diluted) (1):

Continuing operations
Discontinued operations
Attributable to common stockholders

2016:
Tc99m tilmanocept sales revenue
Tc99m tilmanocept license revenue
Grant and other revenue
Gross profit
Operating expenses
Loss from operations
Loss from continuing operations
Gain (loss) from discontinued operations, net of tax
Net loss attributable to common stockholders
Loss per common share (basic and diluted) (1):

Continuing operations
Discontinued operations
Attributable to common stockholders

For the Quarter Ending

March 31

June 30

September
30

December 31

$
$
$

— $
—
—
580
580
3,728
(3,148)
(4,319)
1,454
(2,865)
88,446
85,581

(0.02) $
0.55 $
0.53 $

(0.02) $
0.54 $
0.52 $

9 $
254
686
947
4,705
(3,758)
(2,682)
(1,004)
(3,686)

(0.02) $
0.00 $
(0.02) $

— $
100
—
512
612
5,435
(4,823)
(4,783)
1,631
(3,152)
(2,036)
(5,188)

(0.02) $
(0.01) $
(0.03) $

4 $
246
917
1,166
3,407
(2,241)
(817)
(5,865)
(6,682)

(0.01) $
(0.03) $
(0.04) $

— $
—
—
224
224
2,609
(2,385)
(2,317)
776
(1,541)
151
(1,390)

(0.01) $
— $
(0.01) $

18 $
1,296
511
1,821
2,731
(910)
(1,761)
1,702
(59)

(0.01) $
0.01 $
(0.00) $

—
—
9
386
391
3,912
(3,521)
(6,371)
201
(6,170)
2,112
(4,058)

(0.04)
0.01
(0.03)

9
—
1,022
975
4,215
(3,240)
(2,118)
(1,764)
(3,882)

(0.01)
(0.02)
(0.03)

(1) Net loss per share is computed independently for each of the quarters presented. Therefore the sum of the quarterly per-share

calculations will not necessarily equal the annual per share calculation.

26. Subsequent Events:

a. CRG Litigation and Settlement: On January 16, 2018, the Company filed an emergency motion to set supersedeas bond and

to modify judgment, describing the Texas Court’s oversight of not explaining how to apply the $4.1 million payment, requesting
that the judgment be modified to set the supersedeas amount at $2.9 million so that the Company can stay enforcement of the
judgment pending appeal. The Texas Court refused to rule on this motion, and the court of appeals entered an order compelling
the Texas Court to set a supersedeas amount. The Texas Court has scheduled a hearing on the issue for March 26, 2018,
however it has not yet set the amount, and enforcement of the judgment is stayed until seven days after the Texas Court does so.
We currently await further action by the Texas Court. See Notes 13 and 16.

b. Platinum Litigation: An initial pretrial conference was held on January 26, 2018. At the conference the Court stayed the
deadline for the Company to answer or otherwise respond to the complaint. The Court also directed the parties to engage in
informal jurisdictional discovery and a follow up status conference was held on March 9, 2018, during which the Court set a
briefing schedule and determined that Navidea’s motion to dismiss is due on April 6, 2018. The Court also referred the case to a
settlement conference, which has been scheduled for April 30, 2018. See Notes 13 and 16.

F-41

Subsidiaries of Navidea Biopharmaceuticals, Inc.

Subsidiaries
Navidea Biopharmaceuticals Limited
Macrophage Therapeutics, Inc.

Jurisdiction of Incorporation
United Kingdom
Delaware, United States

Percentage Owned by Registrant
100%
99.9%

Exhibit 21.1

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENT

Exhibit 23.1

We consent to the incorporation by reference in the Registration Statement of Navidea Biopharmaceuticals, Inc. on Form S-3 (File Nos.
333-222092, 333-195806, 333-193330, 333-184173, 333-173752, 333-168485, 333-76151, and 333-15989) and Form S-8 (Nos. 33-81410,
333-119219, 333-130636, 333-130640, 333-153110, 333-158323, 333-183317, 333-05143, 333-21053, 333-05143, 333-198716, and 333-
217814) of our report dated March 14, 2018, with respect to our audit of the consolidated financial statements of Navidea
Biopharmaceuticals, Inc. as of December 31, 2017 and 2016 and for the years then ended and our report dated March 14, 2018 with respect
to our audit of the effectiveness of internal control over financial reporting of Navidea Biopharmaceuticals, Inc. as of December 31, 2017,
which reports are included in this Annual Report on Form 10-K of Navidea Biopharmaceuticals, Inc. for the year ended December 31,
2017.

/s/ Marcum LLP

New Haven, CT
March 15, 2018

Consent of Independent Registered Public Accounting Firm

Exhibit 23.2

Navidea Biopharmaceuticals, Inc.
Dublin, Ohio

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-222092) and Form S-8 (No.
333-119219, 333-130636, 333-130640, 333-153110, 333-158323, 333-183317, 333-198716 and 333-217814) of Navidea
Biopharmaceuticals, Inc. of our report dated March 23, 2016, relating to the consolidated financial statements of Navidea
Biopharmaceuticals, Inc., which appears in this Form 10-K.

/s/ BDO USA, LLP

Chicago, Illinois
March 15, 2018

POWER OF ATTORNEY

Exhibit 24.1

Each of the undersigned officers and directors of Navidea Biopharmaceuticals, Inc., a Delaware corporation (the “Company”), does hereby
constitute and appoint Michael M. Goldberg, M.D. and Jed A. Latkin as his or her agents and lawful attorneys-in-fact, or either one of
them individually with power to act without the other, as his or her agent and lawful attorney-in-fact, in his or her name and on his or her
behalf, and in any and all capacities stated below:

•

To sign and file with the United States Securities and Exchange Commission the Annual Report of the Company on Form 10-K (the
“Annual Report”) for the fiscal year ended December 31, 2017, and any amendments or supplements to such Annual Report; and

To execute and deliver any instruments, certificates or other documents which they shall deem necessary or proper in connection
with the filing of such Annual Report, and generally to act for and in the name of the undersigned with respect to such filing as fully
as could the undersigned if then personally present and acting.

Each agent named above is hereby empowered to determine in his discretion the times when, the purposes for, and the names in which,
any power conferred upon him herein shall be exercised and the terms and conditions of any instrument, certificate or document which
may be executed by him pursuant to this instrument.

This Power of Attorney shall not be affected by the disability of any of the undersigned or the lapse of time.

The validity, terms and enforcement of this Power of Attorney shall be governed by those laws of the State of Ohio that apply to
instruments negotiated, executed, delivered and performed solely within the State of Ohio.

This Power of Attorney may be executed in any number of counterparts, each of which shall have the same effect as if it were the original
instrument and all of which shall constitute one and the same instrument.

IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney effective as of March 15, 2018.

Signature

Title

President, Chief Executive Officer and Director

/s/ Michael M. Goldberg
Michael M. Goldberg, M.D.

(principal executive officer)

/s/ Jed A. Latkin
Jed A. Latkin

/s/ Eric K. Rowinsky
Eric K. Rowinsky, M.D.

Chief Operating Officer and Chief Financial Officer

(principal financial officer and principal accounting officer)

Chairman of the Board of Directors

Claudine Bruck, Ph.D.

Director

/s/ Mark I. Greene
Mark I. Greene, M.D., Ph.D., FRCP

/s/ Y. Michael Rice
Y. Michael Rice

Director

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael M. Goldberg, M.D. certify that:

1. I have reviewed this annual report on Form 10-K of Navidea Biopharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect
to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all

material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this
report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures

(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions

about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the

registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial

reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent
functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the

registrant’s internal control over financial reporting.

March 15, 2018

/s/ Michael M. Goldberg
Michael M. Goldberg, M.D.
President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jed A. Latkin, certify that: