Note 1 - The Company and Basis of Presentation
|6 Months Ended|
Jun. 30, 2020
|Notes to Financial Statements|
|Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]||
Viveve Medical, Inc. (“Viveve Medical”, the “Company”, “we”, “our”, or “us”) designs, develops, manufactures and markets a platform medical technology, which we refer to as
Cryogen-cooled Monopolar RadioFrequency, or CMRF. Our proprietary CMRF technology is delivered through a radiofrequency generator, handpiece and treatment tip, which collectively, we refer to as the Viveve® System. Viveve Medical competes in the women's intimate health industry in some countries by marketing the Viveve System as a way to improve the overall well-being and quality of life of women suffering from vaginal introital laxity, for improved sexual function, or stress urinary incontinence, depending on the relevant country-specific clearance or approval. In the United States, the Viveve System is currently indicated for use in general surgical procedures for electrocoagulation and hemostasis.
Purchase Agreement with Lincoln Park Capital, LLC
June 8, 2020,the Company entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“LPC”), pursuant to which the Company has the right to sell to LPC, and LPC has committed to purchase from us, from time to time, up to
$10,000,000of our common stock, subject to certain limitations, during the
30months term of the Purchase Agreement.
June 9, 2020,LPC purchased
525,000shares of common stock at a price per share of
$0.65(the “Initial Purchase Shares”) under the Purchase Agreement. Thereafter, under the Purchase Agreement, on any business day selected by us, the Company
maydirect LPC to purchase up to
250,000shares (and in certain circumstances up to
500,000shares) of our common stock. (See Note
11– Common Stock.) LPC has
noright to require the Company to sell any shares of common stock to LPC, but LPC is obligated to make purchases as the Company directs, subject to certain conditions. The purchase price per share for each such Regular Purchase will be based off of prevailing market prices of our common stock immediately preceding the time of sale without any fixed discount.
Other than as described above and Note
11– Common Stock, there are
notrading volume requirements or restrictions under the Purchase Agreement, and the Company will control the timing and amount of any sales of our common stock to LPC.
April 15, 2020,the Company reduced the exercise price of the outstanding Series A warrants and Series B warrants from
$1.55per share to
$0.61per share. On
April 16, 2020,the Company entered into inducement letter agreements with certain institutional and accredited holders of Series A warrants and Series B warrants pursuant to which such holders agreed to exercise Series A warrants to purchase
4,820,584shares of common stock and Series B warrants to purchase
242,790shares of common stock for aggregate exercise proceeds to the Company of approximately
$3,089,000.In conjunction, the Company also agreed to issue new Series A-
2warrants to purchase up to
4,820,584shares of common stock as an inducement for the exercise of Series A warrants, and new Series B-
2warrants to purchase up to
242,790shares of common stock as an inducement for the exercise of Series B warrants, in each case at an exercise price of
$0.6371per share and for a term of
fiveyears. The transaction closed on
April 20, 2020.Transaction costs in connection with the
2020Warrant Offering were approximately
11- Common Stock for the calculation of the modification expense for the Series A and B warrants and the issuance of Series A-
2019Public Offering and CRG Debt Conversion
November 2019,the Company closed an underwritten public offering of units (the
“November 2019Offering”) for gross proceeds of approximately
$11,500,000,which included the full exercise of the underwriter's overallotment option to purchase additional shares and warrants. The net proceeds to the Company, after deducting underwriting discounts and commissions and other offering expenses and payable by the Company, were approximately
A total of
1,945,943shares of common stock,
5,473,410shares of Series A convertible preferred stock, Series A warrants to purchase up to
7,419,353shares of common stock, and Series B warrants to purchase up to
7,419,353shares of common stock were issued in the offering, including the full exercise of the over-allotment option. As of
June 30, 2020,all Series A convertible preferred stock had been converted into common stock and there are
noremaining shares of Series A preferred stock outstanding. As of
June 30, 2020,there are Series A warrants to purchase a total of
1,540,829shares of common stock and Series B warrants to purchase a total of
7,080,390shares of common stock still remaining and outstanding. (See Note
10– Preferred Stock; and Note
11– Common Stock.)
In connection with the closing of the
November 2019Offering, the Company's secured lender, affiliates of CRG LP (“CRG”), converted approximately
$28,981,000of the outstanding principal amount under its term loan with CRG (plus accrued interest, the prepayment premium and the back-end facility fee applicable thereto), for an aggregate amount of converted debt obligations of approximately
31,300shares of the newly authorized Series B convertible preferred stock and issued warrants to purchase up to
9,893,776shares of common stock (see Note
6– Note Payable).
Interim Unaudited Financial Information
The accompanying unaudited condensed consolidated financial statements of Viveve Medical have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form
10-Q and Article
03of Regulation S-
X.Accordingly, they do
notinclude all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the condensed consolidated financial statements have been included.
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Annual Report on Form
10-K for the year ended
December 31, 2019,which was filed with the Securities and Exchange Commission on
March 19, 2020.
June 30, 2020are
notnecessarily indicative of the results for the year ending
2020or any future interim period.
Liquidity and Management Plans
The Company has adopted the Financial Accounting Standards Board's (“FASB”) Accounting Standard Codification (“ASC”) Topic
40,Presentation of Financial Statements – Going Concern, which requires that management evaluate whether there are relevant conditions and events that, in the aggregate, raise substantial doubt about the entity's ability to continue as a going concern and to meet its obligations as they become due within
oneyear after the date that the financial statements are issued.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. However, since inception, the Company has sustained significant operating losses and such losses are expected to continue for the foreseeable future. As of
June 30, 2020,the Company had an accumulated deficit of
$211,336,000,cash and cash equivalents of
$8,500,000and working capital of
$11,704,000.Additionally, the Company used
$10,189,000in cash for operations in the
June 30, 2020.The Company will require additional cash funding to fund operations through
August 2021.Accordingly, management has concluded that the Company does
nothave sufficient funds to support operations within
oneyear after the date the financial statements are issued and, therefore, the Company concluded there was substantial doubt about the Company's ability to continue as a going concern.
To fund further operations, the Company will need to raise additional capital. The Company
mayobtain additional financing in the future through the issuance of its common stock, or through other equity or debt financings. The Company's ability to continue as a going concern or meet the minimum liquidity requirements in the future is dependent on its ability to raise significant additional capital, of which there can be
noassurance. If the necessary financing is
notobtained or achieved, the Company will likely be required to reduce its planned expenditures, which could have an adverse impact on the results of operations, financial condition and the Company's ability to achieve its strategic objective. There can be
noassurance that financing will be available on acceptable terms, or at all. The financial statements contain
noadjustments for the outcome of these uncertainties. These factors raise substantial doubt about the Company's ability to continue as a going concern and have a material adverse effect on the Company's future financial results, financial position and cash flows.
The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef