Quarterly report pursuant to Section 13 or 15(d)

Note 12 - Summary of Stock Options

v3.21.1
Note 12 - Summary of Stock Options
3 Months Ended
Mar. 31, 2021
Notes to Financial Statements  
Share-based Payment Arrangement [Text Block]
12.
Summary of Stock Options
 
Stock Option Plans
 
The Company has issued equity awards in the form of stock options (both incentive stock options and non-qualified stock options) and deferred restricted stock awards or units, from
two
employee benefit plans. The plans include the Viveve Amended and Restated
2006
Stock Plan (the
“2006
Plan”) and the Company's Amended and Restated
2013
Stock Option and Incentive Plan (the
“2013
Plan”).
 
As of
March 31, 2021,
there were outstanding stock option awards issued from the
2006
Plan covering a total of
12
shares of the Company's common stock and
no
shares are available for future awards. The weighted average exercise price of the outstanding stock options is
$9,920.00
per share and the weighted average remaining contractual term is
1.8
years.
 
In
January 2021,
the total common stock reserved for issuance under the
2013
Plan was increased by
307,705
shares from
1,451,246
shares to a total of
1,758,951
shares under the evergreen provision of the
2013
Plan.
 
As of
March 31, 2021,
there were outstanding stock option awards issued from the
2013
Plan covering a total of
981,539
shares of the Company's common stock and there remain reserved for future awards
91,755
shares of the Company's common stock. The weighted average exercise price of the outstanding stock options is
$18.29
per share, and the remaining contractual term is
8.8
years. 
 
Activity under the
2006
Plan and the
2013
Plan is as follows: 
 
   
Three Months Ended March 31, 2021
 
   
 
 
 
 
 
 
 
 
Weighted
   
 
 
 
   
 
 
 
 
Weighted
   
Average
   
 
 
 
   
Number
   
Average
   
Remaining
   
Aggregate
 
   
of
   
Exercise
   
Contractual
   
Intrinsic
 
   
Shares
   
Price
   
Term (years)
   
Value
 
Options outstanding, beginning of period
   
986,399
    $
19.10
     
8.9
    $
675
 
Options granted
   
7,000
    $
3.25
     
 
     
 
 
Options exercised
   
-
     
 
     
 
     
 
 
Options canceled
   
(11,848
)   $
66.81
     
 
     
 
 
Options outstanding, end of period
   
981,551
    $
18.42
     
8.8
    $
-
 
                                 
Vested and exercisable and expected to vest, end of period
   
928,262
    $
18.96
     
8.8
    $
-
 
                                 
Vested and exercisable, end of period
   
294,253
    $
38.04
     
8.6
    $
-
 
 
The aggregate intrinsic value reflects the difference between the exercise price of the underlying stock options and the Company's closing share price as of
March 31, 2021.  
 
The options outstanding and exercisable as of
March 31, 2021
were as follows:
 
       
 
 
 
 
 
 
 
 
Weighted
   
 
 
 
 
 
 
 
 
 
 
 
Number
   
Weighted
   
Average
   
Number
   
Weighted
 
 
 
 
 
Outstanding
   
Average
   
Remaining
   
Exercisable
   
Average
 
Range of
 
as of
   
Exercise
   
Contractual
   
as of
   
Exercise
 
Exercise Prices
 
March 31, 2021
   
Price
   
Term (Years)
   
March 31, 2021
   
Price
 
                                             
$3.06
-
$8.91
   
962,600
    $
8.28
     
8.8
     
284,952
    $
8.67
 
$10.90
-
$13.60
   
15,500
    $
12.64
     
8.9
     
6,490
    $
12.98
 
$380.00
-
$580.00
   
125
    $
552.00
     
8.2
     
116
    $
563.62
 
$1,000.00
-
$1,970.00
   
1,888
    $
1,432.98
     
7.6
     
1,395
    $
1,438.84
 
$2,020.00
-
$2,830.00
   
71
    $
2,521.55
     
6.2
     
55
    $
2,528.73
 
$3,110.00
-
$3,580.00
   
189
    $
3,439.26
     
7.4
     
157
    $
3,453.69
 
$4,360.00
-
$4,970.00
   
595
    $
4,552.59
     
6.2
     
517
    $
4,555.78
 
$5,010.00
-
$5,670.00
   
294
    $
5,373.27
     
6.1
     
284
    $
5,365.88
 
$6,000.00
-
$6,000.00
   
138
    $
6,000.00
     
4.7
     
138
    $
6,000.00
 
$7,140.00
-
$7,920.00
   
139
    $
7,722.73
     
5.6
     
137
    $
7,720.15
 
$9,920.00
-
$9,920.00
   
12
    $
9,920.00
     
1.8
     
12
    $
9,920.00
 
Total:
 
 
   
981,551
    $
18.42
     
8.8
     
294,253
    $
38.04
 
 
Deferred Restricted Stock Units
 
As of
March 31, 2021,
there are
687,000
shares of unvested restricted stock outstanding that have been granted by the Company pursuant to deferred restricted stock units (“RSUs”) under the
2013
Plan.
 
In
January 2021,
the Company granted annual equity awards to employees and board members for
690,000
shares of common stock issuable upon vesting of RSUs under the
2013
Plan. The RSUs vest in full on the
second
anniversary of the grant date.
 
During the
three
months ended
March 31, 2021,
RSUs for
3,000
shares of common stock under the
2013
Plan were cancelled.
 
During the
three
months ended
March 31, 2020,
no
RSUs for shares of common stock under the
2013
Plan were granted by the Company.
 
Deferred Restricted Stock Awards
 
As of
March 31, 2021,
there are
232
shares of unvested restricted stock outstanding that have been granted by the Company pursuant to deferred restricted stock awards (“RSAs”) under the
2013
Plan.
 
During the
three
months ended
March 31, 2021
and
2020,
no
RSAs for shares of common stock under the
2013
Plan were granted by the Company.
 
2017
Employee Stock Purchase Plan
 
In
September 2020,
the board of directors approved the suspension of the Company's
2017
Employee Stock Purchase Plan (the
“2017
ESPP”) following the
twelfth
offering period and the ESPP purchase on
September 30, 2020.
 
As of
March 31, 2021,
the remaining shares available for issuance under the
2017
ESPP were
22
shares.
 
Stock-Based Compensation
 
During the
three
months ended
March 31, 
2021,
the Company granted stock options to employees to purchase
7,000
shares of common stock with a weighted average grant date fair value of
$2.19
per share. During the
three
months ended
March 31, 2020,
the Company granted stock options to employees and nonemployees to purchase
46,800
shares of common stock with a weighted average grant date fair value of
$8.80
per share. There were
no
stock options exercised by employees and nonemployees during the
three
months ended
March 31, 2021
and
2020.
 
The Company estimated the fair value of stock options using the Black-Scholes option pricing model. The fair value of stock options is being amortized on a straight-line basis over the requisite service period of the awards. The fair value of stock options granted was estimated using the following weighted average assumptions:   
 
   
Three Months Ended
 
   
March 31,
 
   
2021
   
2020
 
                 
Expected term (in years)
   
5
     
5
 
Average volatility
   
87
%    
73
%
Risk-free interest rate
   
0.82
%    
0.45
%
Dividend yield
   
0
%    
0
%
 
Option-pricing models require the input of various subjective assumptions, including the option's expected life and the price volatility of the underlying stock. The expected stock price volatility is based on analysis of the Company's stock price history over a period commensurate with the expected term of the options, trading volume of comparable companies' stock, look-back volatilities and the Company specific events that affected volatility in a prior period. The expected term of stock options represents the weighted average period the stock options are expected to remain outstanding and is based on the history of exercises and cancellations on all past option grants made by the Company, the contractual term, the vesting period and the expected remaining term of the outstanding options. The risk-free interest rate is based on the U.S. Treasury interest rates whose term is consistent with the expected life of the stock options.
No
dividend yield is included as the Company has
not
issued any dividends and does
not
anticipate issuing any dividends in the future.  
 
The following table shows stock-based compensation expense included in the condensed consolidated statements of operations for the
three
months ended
March 31, 2021
and
2020
(in thousands):
 
   
Three Months Ended
 
   
March 31,
 
   
2021
   
2020
 
                 
Cost of revenue
  $
55
    $
60
 
Research and development
   
97
     
86
 
Selling, general and administrative
   
658
     
564
 
Total
  $
810
    $
710
 
 
As of
March 31, 2021,
the total unrecognized compensation cost in connection with unvested stock options was approximately
$4,186,000.
These costs are expected to be recognized over a period of approximately
2.3
years.   
 
As of
March 31, 2021,
the total unrecognized compensation cost in connection with unvested RSUs was approximately
$2,011,000.
These costs are expected to be recognized over a period of approximately
1.8
years.