vive20210930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to _______________

Commission File Number 1-11388

VIVEVE MEDICAL, INC.

(Exact name of registrant as specified in its charter)

Delaware	04-3153858
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

345 Inverness Drive South

Building B, Suite 250

Englewood, CO 80112

(Address of principal executive offices)

(Zip Code)

(720) 696-8100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock	VIVE	Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definition of “accelerated filer,” and “large accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐		Accelerated filer ☐

Non-accelerated filer ☒		Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 11, 2021, the issuer had 10,602,560 shares of common stock, par value $0.0001 per share, outstanding.

TABLE OF CONTENTS

Note About Forward-Looking Statements
		Page No.
PART I	FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements (unaudited)	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44

Item 4.	Controls and Procedures	44

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	44

Item 1A.	Risk Factors	44

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44

Item 3.	Defaults Upon Senior Securities	45

Item 4.	Mine Safety Disclosures	45

Item 5.	Other Information	45

Item 6.	Exhibits	45

SIGNATURES		47

This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains forward-looking statements that involve substantial risks and uncertainties. All statements contained in this Quarterly Report other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in Part II, Item 1A. "Risk Factors" in this Quarterly Report. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results, performance or achievements may be materially different from what we expect. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

Unless expressly indicated or the context requires otherwise, the terms "Viveve Medical," the "Company," "we," "us," and "our" in this document refer to Viveve Medical, Inc., a Delaware corporation, and, where appropriate, its wholly owned subsidiaries.

	September 30,			December 31,
	2021			2020
ASSETS				*(1)*
Current assets:
Cash and cash equivalents	$	22,665		$	6,523
Accounts receivable, net of allowance for doubtful accounts of $49 and $124 as of September 30, 2021 and December 31, 2020, respectively		514			770
Inventory		2,150			3,254
Prepaid expenses and other current assets		2,083			2,296
Total current assets		27,412			12,843
Property and equipment, net		1,678			2,759
Investment in limited liability company		645			833
Other assets		649			195
Total assets	$	30,384		$	16,630
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,292		$	881
Accrued liabilities		2,557			2,416
Paycheck Protection Program loan, current portion		-			918
Total current liabilities		3,849			4,215
Note payable, noncurrent portion		4,964			4,518
Paycheck Protection Program loan, noncurrent portion		-			425
Other noncurrent liabilities		1,206			498
Total liabilities		10,019			9,656
Commitments and contingences (Note 9)
Stockholders’ equity:
Convertible preferred stock; 10,000,000 shares authorized as of September 30, 2021 and December 31, 2020; Series B preferred stock, $0.0001 par value; 39,279 and 35,819 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		-			-
Series C preferred stock, $0.0001 par value; 0 shares issued and outstanding as of September 30, 2021 and outstanding as of September 30, 2021		-			-
Common stock, $0.0001 par value; 75,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 10,602,560 and 2,171,316 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		1			-
Additional paid-in capital		255,889			226,800
Accumulated deficit		(235,525	)		(219,826	)
Total stockholders’ equity		20,365			6,974
Total liabilities and stockholders’ equity	$	30,384		$	16,630

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2021			2020			2021			2020

Revenue	$	1,616		$	1,524		$	4,720		$	3,532
Cost of revenue		1,502			1,283			4,059			3,483
Gross profit		114			241			661			49

Operating expenses:
Research and development		2,695			884			6,804			3,745
Selling, general and administrative		2,911			2,761			9,423			10,476
Total operating expenses		5,606			3,645			16,227			14,221
Loss from operations		(5,492	)		(3,404	)		(15,566	)		(14,172	)
Gain on forgiveness of Paycheck Protection Program loan		-			-			1,358			-
Modification of warrants		-			-			(373	)		(1,838	)
Interest expense, net		(255	)		(235	)		(734	)		(668	)
Other expense, net		(78	)		(41	)		(196	)		(159	)
Net loss from consolidated companies		(5,825	)		(3,680	)		(15,511	)		(16,837	)
Loss from minority interest in limited liability company		(33	)		(55	)		(188	)		(323	)
Comprehensive and net loss		(5,858	)		(3,735	)		(15,699	)		(17,160	)
Series B convertible preferred stock dividends		(1,190	)		(1,053	)		(3,463	)		(3,064	)
Net loss attributable to common stockholders	$	(7,048	)	$	(4,788	)	$	(19,162	)	$	(20,224	)

Net loss per share of common stock:
Basic and diluted	$	(0.67	)	$	(2.65	)	$	(1.93	)	$	(14.71	)

Weighted average shares used in computing net loss per common share:
Basic and diluted		10,591,834			1,807,931			9,916,834			1,374,800

Note: All share and per share data has been adjusted to reflect the 1-for-10 reverse stock split which became effective after market close on December 1, 2020, as discussed in Note 2.

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Series A Convertible Preferred Stock, $0.0001 par value				Series B Convertible Preferred Stock, $0.0001 par value				Common Stock, $0.0001 par value				Additional Paid-In			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Equity

Balances as of January 1, 2021		-	$	-		35,819	$	-		2,171,316	$	-	$	226,800		$	(219,826	)	$	6,974
January 2021 Offering, net issuance costs		-		-		-		-		5,666,760		1		25,121			-			25,122
Conversion of Series C convertible preferred stock into common stock		-		-		-		-		2,450,880		-		-			-			-
Issuance of common shares in connection with common warrant exercises		-		-		-		-		52,760		-		179			-			179
Modification of exercise price of warrants in connection with January 2021 Offering		-		-		-		-		-		-		287			-			287
Transaction costs in connection with Purchase Agreement with LPC		-		-		-		-		-		-		(40	)		-			(40	)
Dividend on Series B convertible preferred stock		-		-		-		-		-		-		(1,119	)		-			(1,119	)
Dividend on Series B convertible preferred stock paid in PIK shares		-		-		1,118		-		-		-		1,118			-			1,118
Stock-based compensation expense		-		-		-		-		-		-		810			-			810
Net loss		-		-		-		-		-		-		-			(5,791	)		(5,791	)
Balances as of March 31, 2021		-		-		36,937		-		10,341,716		1		253,156			(225,617	)		27,540
Issuance of purchased common shares under the Purchase Agreement with LPC		-		-		-		-		250,000		-		704			-			704
Transaction costs in connection with First Amendment to Purchase Agreement with LPC		-		-		-		-		-		-		(31	)		-			(31	)
Modification of exercise price of warrants in connection with First Amendment to Purchase Agreement with LPC
Purchase Agreement with LPC		-		-		-		-		-		-		86			-			86
Dividend on Series B convertible preferred stock		-		-		-		-		-		-		(1,154	)		-			(1,154	)
Dividend on Series B convertible preferred stock paid in PIK shares		-		-		1,153		-		-		-		1,153			-			1,153
Stock-based compensation expense		-		-		-		-		-		-		867			-			867
Net loss		-		-		-		-		-		-		-			(4,050	)		(4,050	)
Balances as of June 30, 2021		-		-		38,090		-		10,591,716		1		254,781			(229,667	)		25,115
Dividend on Series B convertible preferred stock		-		-		-		-		-		-		(1,190	)		-			(1,190	)
Dividend on Series B convertible preferred stock paid in PIK shares		-		-		1,189		-		-		-		1,189			-			1,189
Stock-based compensation expense		-		-		-		-		-		-		1,088			-			1,088
Issuance of common shares from employee stock purchase plan		-		-		-		-		10,844		-		21			-			21
Net loss		-		-		-		-		-		-		-			(5,858	)		(5,858	)
Balances as of September 30, 2021		-	$	-		39,279	$	-		10,602,560	$	1	$	255,889		$	(235,525	)	$	20,365

	Series A Convertible Preferred Stock, $0.0001 par value					Series B Convertible Preferred Stock, $0.0001 par value				Common Stock, $0.0001 par value				Additional Paid-In			Accumulated			Total Stockholders’
	Shares			Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Equity

Balances as of January 1, 2020		185,218		$	-		31,678	$	-		707,571	$	-	$	214,431		$	(197,911	)	$	16,521
Issuance costs in connection with November 2019 Offering		-			-		-		-		-		-		(30	)		-			(30	)
Conversion of Series A convertible preferred stock into common stock		(185,218	)		-		-		-		185,218		-		-			-			-
Issuance of common shares in connection with common warrant exercises		-			-		-		-		107,172		-		1,661			-			1,661
Series B convertible preferred stock dividends		-			-		-		-		-		-		(990	)		-			(990	)
Series B convertible preferred stock dividends paid in PIK shares		-			-		989		-		-		-		989			-			989
Stock-based compensation expense		-			-		-		-		-		-		686			-			686
Issuance of common shares from employee stock purchase plan		-			-		-		-		32		-		-			-			-
Issuance of restricted common shares in connection with consulting agreement		-			-		-		-		2,832		-		24			-			24
Net loss		-			-		-		-		-		-		-			(6,310	)		(6,310	)
Balances as of March 31, 2020		-			-		32,667		-		1,002,825		-		216,771			(204,221	)		12,551
Issuance costs in connection with November 2019 Offering		-			-		-		-		-		-		(3	)		-			(3	)
Issuance of common shares in connection with Series A and B warrant exercises		-			-		-		-		514,578		-		3,139			-			3,139
Modification of exercise price of warrants in connection with 2020 Warrant Offering		-			-		-		-		-		-		1,838			-			1,838
Issuance of Series A-2 and B-2 warrants in connection with 2020 Warrant Offering		-			-		-		-		-		-		1,838			-			1,838
Issuance costs for Series A-2 and B-2 warrants in connection with 2020 Warrant Offering		-			-		-		-		-		-		(1,838	)		-			(1,838	)
Transaction costs in connection with 2020 Warrant Offering		-			-		-		-		-		-		(326	)		-			(326	)
Issuance of initial purchase common shares under the Purchase Agreement with LPC		-			-		-		-		52,500		-		341			-			341
Issuance costs in connection with Purchase Agreement with LPC		-			-		-		-		-		-		(452	)		-			(452	)
Series B convertible preferred stock dividends		-			-		-		-		-		-		(1,021	)		-			(1,021	)
Series B convertible preferred stock dividends paid in PIK shares		-			-		1,018		-		-		-		1,018			-			1,018
Stock-based compensation expense		-			-		-		-		-		-		632			-			632
Issuance of common shares from employee stock purchase plan		-			-		-		-		30		-		-			-			-
Issuance of common shares for vesting of restricted stock award granted to consultant		-			-		-		-		25		-		-			-			-
Issuance of restricted common shares in connection with consulting agreement		-			-		-		-		3,454		-		25			-			25
Net loss		-			-		-		-		-		-		-			(7,115	)		(7,115	)
Balances as of June 30, 2020		-			-		33,685		-		1,573,412		-		221,962			(211,336	)		10,627
Issuance of common shares in connection with Series A and B warrant exercises		-			-		-		-		494,113		-		3,014			-			3,014
Issuance costs for Series A-2 and B-2 warrants in connection with 2020 Warrant Offering		-			-		-		-		93,129		-		593			-			593
Transaction costs in connection with 2020 Warrant Offering		-			-		-		-		-		-		(7	)		-			(7	)
Transaction costs in connection with Purchase Agreement with LPC		-			-		-		-		-		-		(42	)		-			(42	)
Dividend on Series B convertible preferred stock		-			-		-		-		-		-		(1,053	)		-			(1,053	)
Dividend on Series B convertible preferred stock paid in PIK shares		-			-		1,050		-		-		-		1,050			-			1,050
Stock-based compensation expense		-			-		-		-		-		-		617			-			617
Issuance of common shares in connection with ESPP		-			-		-		-		22		-		-			-			-
Issuance of restricted common shares in connection with consulting agreement		-			-		-		-		4,709		-		25			-			25
Reverse stock split (December 2020) - rounding adjustment		-			-		-		-		5,931		-		-			-			-
Net loss		-			-		-		-		-		-		-			(3,735	)		(3,735	)
Balances as of September 30, 2020		-		$	-		34,735		-		2,171,316	$	-	$	226,159		$	(215,071	)	$	11,089

Note: All share and per share data has been adjusted to reflect the 1-for-10 reverse stock split which became effective after market close on December 1, 2020, as discussed in Note 2.

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Nine Months Ended
	September 30,
	2021			2020

Cash flows from operating activities:
Net loss	$	(15,699	)	$	(17,160	)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for doubtful accounts		104			335
Depreciation and amortization		884			965
Stock-based compensation		2,765			2,009
Non-cash interest expense		446			394
Amortization of operating lease right-of-use assets and accretion of operating lease liabilities		15			3
Loss from minority interest in limited liability company		188			323
Loss on disposal of property and equipment		40			14
Modification of warrants		373			1,838
Forgiveness of Paycheck Protection Program loan		(1,358	)		-
Changes in assets and liabilities:
Accounts receivable		152			549
Inventory		1,423			233
Prepaid expenses and other current assets		213			683
Other noncurrent assets		(3	)		444
Accounts payable		411			(913	)
Accrued and other liabilities		71			(2,918	)
Other noncurrent liabilities		324			265
Net cash used in operating activities		(9,651	)		(12,936	)

Cash flows from investing activities:
Purchase of property and equipment		(162	)		(403	)
Net cash used in investing activities		(162	)		(403	)

Cash flows from financing activities:
Proceeds from January 2021 Offering, net of issuance costs		25,122			-
Proceeds from exercise of common warrants		179			8,407
Transaction costs in connection with 2020 Warrant Offering		-			(333	)
Proceeds from purchase of common shares under Purchase Agreement with LPC		704			341
Transaction costs in connection with Purchase Agreement with LPC		(71	)		(494	)
Proceeds from Paycheck Protection Program loan		-			1,343
Transaction costs in connection with November 2019 Offering		-			(33	)
Proceeds from issuance of common shares from employee stock purchase plan		21			-
Net cash provided by financing activities		25,955			9,231
Net increase (decrease) in cash and cash equivalents		16,142			(4,108	)

Cash and cash equivalents - beginning of period		6,523			13,308
Cash and cash equivalents - end of period	$	22,665		$	9,200

Supplemental disclosure:
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-


Supplemental disclosure of cash flow information as of end of period:
Forgiveness of Paycheck Protection Program loan	$	1,358		$	-
Issuance of Series B convertible preferred stock in settlement of dividends	$	3,460		$	3,057
Issuance of note payable in settlement of accrued interest	$	443		$	392
Net transfer of equipment between inventory and property and equipment	$	(319	)	$	37
Supplemental cash flow information related to leases was as follows:
Operating cash outflows from operating leases	$	195		$	226

The accompanying notes are an integral part of these condensed consolidated financial statements.