Annual report pursuant to Section 13 and 15(d)

Note 8 - Paycheck Protection Program Loan

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Note 8 - Paycheck Protection Program Loan
12 Months Ended
Dec. 31, 2020
Notes to Financial Statements  
Long-term Debt [Text Block]
8.
Paycheck Protection Program Loan
 
The Paycheck Protection Program (“PPP”) was established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and is administered by the U.S. Small Business Administration (“SBA”). On
April 24, 2020,
Viveve, Inc. (“Viveve”), a wholly-owned subsidiary of the Company, entered into a promissory note evidencing an unsecured loan in the aggregate amount of approximately
$1,343,000
made to Viveve under the PPP (the “PPP Loan”). The PPP Loan to Viveve is being made through Western Alliance Bank. The interest rate on the PPP Loan is
1.00%
and the term is
two
years. In accordance with the updated Small Business guidance, the PPP Loan was modified so that, beginning
ten
months from the date of the PPP Loan, Viveve is required to make monthly payments of principal and interest. The promissory note evidencing the PPP Loan contains customary events of default relating to, among other things, payment defaults or breaching the terms of the PPP Loan documents. The occurrence of an event of default
may
result in the repayment of all amounts outstanding, collection of all amounts owing from Viveve, or filing suit and obtaining judgment against Viveve. Under the terms of the CARES Act, PPP Loan recipients can apply for and be granted forgiveness for all or a portion of the loan granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities.
No
assurance is provided that Viveve will obtain forgiveness of the PPP Loan in whole or in part.
 
In
October 2020,
the Company was notified that the terms of its PPP Loan with Western Alliance Bank were modified. The amount of time that the Company had to spend the proceeds of the PPP Loan (the “covered period”) was extended from
8
weeks to
24
weeks. The date to begin repaying unforgiven portions of the PPP Loan was also extended from
six
months after the funding date to up to
10
months after the end of the covered period (approximately
16
months from the funding date) depending on when the Company applies for forgiveness. The SBA will also cover interest on the forgiveness portion of the loan during this period. There was
no
change to the maturity date of the loan. All PPP Loans must be repaid or forgiven within
two
years after the funding date. The Company submitted its PPP Loan forgiveness application to the SBA in
October 2020.
However,
no
assurance can be given that the PPP Loan will be forgiven.
 
As of
December 31, 2020,
future minimum payments under the PPP Loan are as follows (in thousands):
 
Year Ending December 31,
 
 
 
 
2021
  $
938
 
2022
   
426
 
Total payments
   
1,364
 
Less: Amount representing interest
   
(20
)
Present value of obligations
   
1,344
 
Paycheck Protection Program loan,current portion
   
918
 
Paycheck Protection Program loan, noncurrent portion
  $
425