Quarterly report pursuant to Section 13 or 15(d)

Note 11 - Common Stock

v3.21.1
Note 11 - Common Stock
3 Months Ended
Mar. 31, 2021
Notes to Financial Statements  
Stockholders' Equity Note Disclosure [Text Block]
11.
Common Stock
 
Purchase Agreement with Lincoln Park Capital, LLC
 
On
June 8, 2020,
the Company entered into the Purchase Agreement with LPC, which provided that the Company had the right, in its sole discretion, to sell to LPC, and LPC has committed to purchase from us, up to
$10,000,000
of our common stock, subject to certain limitations, from time to time over a
30
-month period pursuant to the terms of the Purchase Agreement. The Purchase Agreement limited the Company's sale of shares of common stock to LPC to
301,762
shares of common stock (after giving effect to the Company's reverse stock split in
December 2020),
representing
19.99%
of the shares of the common stock outstanding on the date of the Purchase Agreement unless (i) shareholder approval was obtained to issue more than such amount or (ii) the average price of all applicable sales of common stock to LPC under the Purchase Agreement equaled or exceeded
$6.46
per share (after giving effect to the Company's reverse stock split), which represented the lower of (a) the closing price of our common stock on the Nasdaq Capital Market immediately preceding the date of the Purchase Agreement or (b) the average of the closing price of the common stock on the Nasdaq Capital Market for the
five
business days immediately preceding the date of the Purchase Agreement, as calculated in accordance with Nasdaq Rules.
 
On
March 31, 2021,
the Company and LPC entered into the
first
amendment to the Purchase Agreement. The amendment limited the Company's sale shares of common stock to LPC from the date thereof to
2,068,342
shares of shares of Common Stock, representing
19.99%
of the shares of the common stock outstanding on the date of amendment unless (i) shareholder approval is obtained to issue more than such amount or (ii) the average price of all applicable sales of common stock to LPC under the Purchase Agreement, as amended equals or exceeds
$2.99
per share, which represents the lower of (a) the closing price of the common stock on the Nasdaq Capital Market immediately preceding the date of the Amendment or (b) the average of the closing prices of our common stock on the Nasdaq Capital Market for the
five
business days immediately preceding the date of the Amendment, as calculated in accordance with Nasdaq Rules.
 
2021
Public Offering
 
On
January 19, 2021,
the Company closed an upsized underwritten public offering of units (the
“January 2021
Offering”) for gross proceeds of approximately
$27,600,000,
which included the exercise of the underwriter's over-allotment option to purchase additional shares and warrants, prior to deducting underwriting discounts and commissions and offering expenses payable by Viveve.
 
The offering comprised of: (
1
)
4,607,940
Class A Units, priced at a public offering price of
$3.40
per Class A Unit, with each unit consisting of
one
share of common stock and
one
warrant to purchase
one
share of common stock, at an exercise price of
$3.40
per share that expires on the
fifth
anniversary of the date of issuance; and (
2
2,450,880
Class B Units, priced at a public offering price of
$3.40
per Class B Unit, with each unit consisting of
one
share of Series C convertible preferred stock and
one
warrant to purchase
one
share of common stock, at an exercise price of
$3.40
per share that expires on the
fifth
anniversary of the date of issuance. The underwriter exercised an over-allotment option to purchase an additional
1,058,820
shares of common stock and warrants to purchase
1,058,820
shares of common stock in the offering. The net proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses payable by the Company, were approximately
$25,122,000.
 
A total of
2,450,880
shares of Series C convertible preferred stock were issued in the
January 2021
Offering. In
January 2021,
all Series C convertible preferred stock were converted into common stock and there are
no
remaining shares of Series C convertible preferred stock outstanding.
 
Warrants to purchase a total of
8,117,640
shares of common stock were issued in the
January 2021
Offering. In
February
and
March 2021,
holders exercised
January 2021
warrants to purchase
12,760
shares of common stock for aggregate exercise proceeds to the Company of approximately
$43,000.
As of
March 31, 2021,
there were
January 2021
warrants to purchase a total of
8,104,880
shares of common stock still remaining and outstanding.
 
Restricted Common Shares
 
There were
no
restricted common shares issued during the
three
months ended
March 31, 2021.
 
The activity of restricted common shares during the
three
months ended
March 31, 2020
is described as follows:
 
 
In
March 2020,
the Company issued
28,313
restricted shares of its common stock at an aggregate value of approximately
$24,000.
 
Warrants for Common Stock
 
As of
March
31,2021,
outstanding warrants to purchase shares of common stock were as follows: 
 
           
 
 
 
 
Number of
 
           
 
 
 
 
Shares
 
           
 
 
 
 
Outstanding
 
   
Exercisable
 
Expiration
 
Exercise
   
Under
 
Issuance Date
 
for
 
Date
 
Price
   
Warrants
 
                         
February 2015
 
Common Shares
 
February 17, 2025
  $
4,000.00
     
79
 
March 2015
 
Common Shares
 
March 26, 2025
  $
2,720.00
     
2
 
May 2015
 
Common Shares
 
May 12, 2025
  $
4,240.00
     
37
 
December 2015
 
Common Shares
 
December 16, 2025
  $
5,600.00
     
31
 
April 2016
 
Common Shares
 
April 1, 2026
  $
6,080.00
     
25
 
May 2016
 
Common Shares
 
May 11, 2021
  $
7,740.00
     
6
 
June 2016
 
Common Shares
 
June 20, 2026
  $
4,980.00
     
101
 
May 2017
 
Common Shares
 
May 25, 2027
  $
9,500.00
     
223
 
November 2019
 
Common Shares
 
November 26, 2024
  $
3.40
     
285,632
 
November 2019
 
Common Shares
 
November 26, 2024
  $
18.36
     
989,379
 
April 2020
 
Common Shares
 
April 21, 2025
  $
3.40
     
413,210
 
January 2021
 
Common Shares
 
January 19, 2026
  $
3.40
     
8,104,880
 
   
 
 
 
   
 
     
9,793,605
 
 
In connection with the
2017
Loan Agreement, the Company issued warrants to purchase a total of
223,
shares of common stock at an exercise price of
$9,500.00
per share. The warrants have a contractual life of
ten
years and are exercisable immediately in whole or in part. The fair value of the warrants, along with financing and legal fees, are recorded as debt issuance costs and presented in the condensed consolidated balance sheets as a deduction from the carrying amount of the note payable. The debt issuance costs are amortized to interest expense over the loan term. During the
three
months ended
March 31, 2021
and
2020,
the Company recorded
$1,000
and
$1,000,
respectively, of interest expense relating to the debt issuance costs using the effective interest method. As of
March 31, 2021,
the unamortized debt discount was
$8,000.
 
In
February 2020,
a total of
102,626
shares of common stock were issued in connection with the exercise of Series A warrants for gross proceeds of approximately
$1,591,000,
and a total of
4,548
shares of common stock were issued in connection with the exercise of Series B warrants for gross proceeds of approximately
$70,000.
 
 
In connection with the
January 2021
Offering, warrants to purchase up to
8,117,640
shares of common stock were issued in the offering. The warrants to purchase
one
share of common stock have an exercise price of
$3.40
per share and expires on the
fifth
anniversary of the date of issuance.
 
On
January 19, 2021,
the Company closed a public offering at an effective price of
$3.40
per share of its common stock. As a result, the pricing terms of the Series B, A-
2
and B-
2
Common Stock Purchase Warrants were modified so that each warrant entitles the holder to purchase
one
share of common stock for an adjusted exercise price of
$3.40.
The exercise price for Series B warrants was modified from
$6.10
per share to
$3.40
per share. The exercise price for Series A-
2
and B-
2
warrants was modified from
$6.371
per share to
$3.40
per share. There was
no
change to the quantity of warrant shares. The Company determined the incremental fair value on Series B, A-
2
and B-
2
warrants due to the modification of exercise price on the date of adjustment to be approximately
$287,000
using the Black-Scholes option pricing model. Assumptions used were as follows:
 
   
Immediately
 
Immediately
 
Series B Warrants
 
before Modification
 
After Modification
         
Exercise price        
Common stock price  
$6.10
 
$3.40
Common stock price
 
$3.19
 
$3.19
Expected term (in years)
 
3.9
 
3.9
Average volatility
 
90%
 
90%
Risk-free interest rate
 
0.33%
 
0.33%
Dividend yield  
0%
 
0%
 
   
Immediately
 
Immediately
 
Series A-2 and B-2 Warrants
 
before Modification
 
After Modification
         
Exercise price  
$6.37
 
$3.40
Common stock price
 
$3.19
 
$3.19
Expected term (in years)
 
4.3
 
4.3
Average volatility
 
90%
 
90%
Risk-free interest rate
 
0.33%
 
0.33%
Dividend yield  
0%
 
0%
 
The incremental fair value of the Series B, A-
2
and B-
2
warrants is recorded as other expense and as additional paid-in capital.
 
In
February 2021,
a total of
40,000
shares of common stock were issued in connection with the exercise of Series B warrants for gross proceeds of approximately
$136,000
and a total of
8,760
shares of common stock were issued in connection with the exercise of
January 2021
warrants for gross proceeds of approximately
$30,000.
 
In
March 2021,
a total of
4,000
shares of common stock were issued in connection with the exercise of
January 2021
warrants for gross proceeds of approximately
$13,000.
 
As of
March 31, 2021,
there were
no
Series A warrants remaining to purchase shares of common stock and Series B warrants to purchase a total of
285,632
shares of common stock still remaining and outstanding.
 
As of
March 31, 2021,
there were Series A-
2
warrants to purchase a total of
392,830
shares of common stock and Series B-
2
warrants to purchase a total of
20,380
shares of common stock still remaining and outstanding.
 
As of
March 31, 2021,
there were
January 2021
warrants to purchase a total of
8,104,880
shares of common stock still remaining and outstanding.
 
No
shares issuable pursuant to warrants have been cancelled during the
three
months ended
March 31, 2021
and
2020.
 
No
shares issuable pursuant to warrants have expired during the
three
months ended
March 31, 2021
and
2020.