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Item 2.04
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Triggering Events That Accelerate or Increase a Direct Financial Obligation
or an Obligation under an Off-Balance Sheet Arrangement
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As previously reported, on April 7, 2016,
Navidea Biopharmaceuticals, Inc. (the “Company”) received a notice from Capital Royalty Partners II L.P., as Secured
Party and as Control Agent, Capital Royalty Partners II – Parallel Fund “A” L.P., as Secured Party, and Parallel
Investment Opportunities Partners II L.P., as Secured Party (collectively, “CRG”), pursuant to the Term Loan Agreement,
dated May 8, 2015, as amended by Amendment 1 to Term Loan Agreement, dated as of December 23, 2015 (as amended, the “Loan
Agreement”), by and among the Company, the subsidiary guarantors from time to time party thereto and CRG. In the notice,
CRG claimed that certain Events of Default, unrelated to repayment terms, had occurred under the Loan Agreement and that CRG,
as a result, was entitled to certain remedies set forth in the Loan Agreement.
By letter dated May 31, 2016, CRG declared
all of the Company’s obligations under the Loan Agreement and all other loan documents to be immediately due and payable
in the amount of $56,157,240.69. The Company disputes the amounts claimed to be due and believes that CRG does not have the right
to accelerate the loan. On June 1, 2016, CRG filed a Verified Second Amended Petition and Application for Temporary Injunction
in The District Court of Harris County, Texas, seeking to restrain the Company and its subsidiary guarantors from operating or
using new accounts established by the Company without having first entered into the requisite blocked account control and pledge
collateral account control agreements with CRG. A hearing is scheduled on such matter on June 9, 2016.
The Company reiterates its firmly held
position that the alleged claims do not constitute Events of Default under the Loan Agreement and believes it has defenses against
such claims. The Company is working diligently on the preparation of counterclaims which it expects to assert.
The Company is also continuing to explore
alternative financing arrangements in order to refinance the CRG debt. The Company believes that the actions of CRG are a violation
of the Loan Agreement and, as a result, CRG is in breach of the Loan Agreement, not the Company. The Company believes that its
best course of action is to refinance the CRG debt and pursue its claims for damages. There can be no assurance that CRG will
not prevail in exercising control over any banking arrangements that the Company creates, that the Company will be able to refinance
the CRG debt or that the Company will be successful in its claims for damages.
Statements contained or incorporated by
reference in this Current Report on Form 8-K 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,
and markets for the Company’s products, are forward-looking statements. 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, the Company’s continuing operating losses, ability to repay debt, the outcome of the CRG litigation, uncertainty of
market acceptance, reliance on third party manufacturers, accumulated deficit, future capital needs, uncertainty of capital funding,
dependence on limited product line and distribution channels, competition, limited marketing and manufacturing experience, and
other risks detailed in the Company’s most recent Annual Report on Form 10-K and other filings with the United States Securities
and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements.