S-1

As filed with the Securities and Exchange Commission on November 21, 2014

 Registration Statement No. 333-__________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1

REGISTRATION STATEMENT UNDER

THE SECURITIES ACT OF 1933

VIVEVE MEDICAL, INC.

(Exact name of Registrant as specified in its charter)

Yukon Territory, Canada	3841	04-3153858
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer  Identification No.)

150 Commercial Street

Sunnyvale, California 94086

Telephone: (408) 530-1900

Telecopier:

(Address and telephone number of principal executive offices)

Scott Durbin

150 Commercial Street

Sunnyvale, California 94086

Telephone: (408) 530-1900

Telecopier:

 (Name, address and telephone number of agent for service)

Copy to:

Kevin Friedmann, Esq.

Richardson & Patel LLP

1100 Glendon Avenue, Suite 850

Los Angeles, California 90024

Telephone: (310) 208-1182

Telecopier: (310) 208-1154

Approximate Date of Proposed Sale to the Public:  As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    ☑

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☑
(Do not check if a smaller reporting company )

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered (1)		Proposed Maximum Offering Price Per Share (2)		Proposed Maximum Aggregate Offering Price		Amount of Registration Fee
Shares of Common Stock, no par value		11,406,932	$	0.45	$	5,133,119	$	596.47
Shares of Common Stock, no par value,  underlying warrants		940,189	$	0.45	$	423,085	$	49.16
TOTAL		12,347,121		0.45	$	5,556,204	$	645.63

(1)	Pursuant to Rule 416 under the Securities Act of 1933, as amended, the shares being registered hereunder include such indeterminate number of shares of common stock, as may be issuable with respect to the shares being registered hereunder as a result of stock splits, stock dividends or similar transactions.
(2)	Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended, using the last sale price for the registrant’s common stock reported by the OTCQB of the OTC Markets Group Inc. on November 17, 2014.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the commission, acting pursuant to said Section 8(a), may determine. 

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED NOVEMBER 21, 2014

Prospectus

12,347,121 Shares of Common Stock

VIVEVE MEDICAL, INC.

This prospectus relates to the offer and sale of up to 12,347,121 shares of common stock, no par value, of Viveve Medical, Inc., a Yukon Territory corporation (the “ Company, ” “ Viveve, ” “ us ,” “ our ,” or “ we ”) by the selling stockholders identified on page 26 of this prospectus.

We are not selling any securities under this prospectus and will not receive any of the proceeds from the sale of shares by the selling stockholders.

The selling stockholders may sell the shares of common stock described in this prospectus in a number of different ways and at varying prices. See “Plan of Distribution” for more information about how the selling stockholders may sell the shares of common stock being registered pursuant to this prospectus.

We will pay the expenses incurred in registering the shares, including legal and accounting fees. See “Plan of Distribution”.

Our common stock is currently quoted on the OTCQB under the symbol “VIVMF”. On November 20, 2014, the last reported sale price of our common stock was $0.56.

An investment in our securities is speculative and involves a high degree of risk. See “Risk Factors” beginning on page 7 of this prospectus for a discussion of information that you should consider before investing in our securities.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this prospectus is ______, 2014.

ADDITIONAL INFORMATION

You should rely only on the information contained or incorporated by reference in this prospectus and in any accompanying prospectus supplement. No one has been authorized to provide you with different information. The shares are not being offered in any jurisdiction where the offer is not permitted. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of such documents.

Except where otherwise indicated, all share and per share data in this prospectus give retroactive effect to a one for 100 reverse stock split effected on September 23, 2014.

TABLE OF CONTENTS

	Page No.
PROSPECTUS SUMMARY	1
WHERE YOU CAN FIND MORE INFORMATION	8
RISK FACTORS	8
FORWARD-LOOKING STATEMENTS	26
USE OF PROCEEDS	27
SELLING STOCKHOLDERS	27
PLAN OF DISTRIBUTION	29
MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS	31
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	32
OUR BUSINESS	39
MANAGEMENT	57
EXECUTIVE COMPENSATION	60
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	62
CERTAIN RELATIONSHIPS, RELATED PARTY TRANSACTIONS AND DIRECTOR INDEPENDENCE	64
DESCRIPTION OF SECURITIES	66
LEGAL MATTERS	70
EXPERTS	70
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS	F-1

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission. Under the Commission’s rules, using this prospectus and, if required, one or more prospectus supplements, the selling stockholders named herein may distribute the shares of common stock covered by this prospectus. A prospectus supplement may add, update or change information contained in this prospectus.

FINANCIAL INFORMATION

On September 23, 2014, Viveve Medical, Inc. (formerly PLC Systems, Inc.), a Yukon Territory corporation (“Viveve Medical”) completed a reverse acquisition and recapitalization (the “Merger”) pursuant to the terms and conditions of an Agreement and Plan of Merger (“Merger Agreement”) with Viveve, Inc., a Delaware corporation. Viveve, Inc. will operate as a wholly-owned subsidiary of Viveve Medical. As a result of the reverse acquisition resulting from the Meregr, Viveve, Inc. is considered the accounting acquirer in the Merger and the assets and liabilities and the historical operations that are reflected in our financial statements are those of Viveve, Inc. Therefore, the historical financial data of Viveve, Inc. is deemed to be our historical financial data.

PROSPECTUS SUMMARY

The following summary highlights information contained elsewhere in this prospectus. This summary may not contain all of the information that may be important to you. You should read this entire prospectus carefully, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical financial statements and related notes included elsewhere in this prospectus. In this prospectus, unless otherwise noted, the terms “Viveve”, “the Company,” “we,” “us,” and “our” refer to Viveve Medical, Inc. and its wholly-owned subsidiary, Viveve, Inc.

The Company

Viveve designs, develops, manufactures and markets medical devices for the non-invasive treatment of vaginal introital laxity. Vaginal laxity occurs in many women as a result of natural childbirth, during which the vaginal opening, or introitus, is over-stretched and fails to return to its pre-childbirth state. Vaginal laxity can often cause decreased sexual function and satisfaction in women. The Viveve System uses patented, monopolar, radiofrequency, or RF, energy to generate low temperature heat. The vaginal mucosa is simultaneously cooled while this non-ablative heat is delivered into the submucosal layer. The RF energy stimulates the formation of collagen and causes the collagen fibers to remodel thereby tightening the submucosal tissue of the vaginal introitus. The RF stimulation causes subtle alterations in the collagen that can renew the tissue and further tighten the vaginal introitus over the next one to three months and lead to increased sexual function. The Viveve Treatment is a non-invasive solution for vaginal laxity that is performed in less than 30 minutes, in a physician’s office, and does not require the use of anesthesia. It provides patients suffering from vaginal laxity and decreased sexual function a non-invasive alternative to surgical procedures, which in contrast, can cost up to tens of thousands of dollars and involve weeks of recovery.

Our Technology

The Viveve System uses a patented method of delivering monopolar RF energy for heating collagen.

● Monopolar Radiofrequency Energy. Monopolar RF delivery uses two electrodes, with one active electrode being held in the device handpiece by the physician and the second, a passive return electrode, typically attached to the patient’s upper leg. Monopolar delivery allows for precise administration of energy because the electrical current is concentrated where the active electrode touches the body and disperses quickly as it travels towards the return electrode. The monopolar RF process is distinct from bipolar RF-based technology, which is superficial, relying on current passing through tissue located between two probes placed close together on the surface of the skin. We believe that our monopolar technology delivers energy more effectively and to a greater tissue depth than bipolar technology.

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● The Capacitive Coupling Mechanism of Action for Collagen Heating. Our single-use Viveve treatment tip contains patented technology that uses monopolar RF energy as a controlled tissue heating source through the use of a non-conducting material, known as a dielectric. Capacitive coupling is the use of the dielectric to create an electric field in the area where the treatment tip touches the body. The electric field induces a current within the surrounding tissue, resulting in volumetric heating of the tissue due to the tissue’s natural resistance to electrical current flow. Collagen is an efficient conductor of electricity and therefore acts as a pathway for the electric current. This process results in heating of the fibrous septae, the strands of collagen fibers that permeate tissues and connect the outer mucosal layer to the underlying muscle. Delivery of heat to the fibrous septae located in deeper layers of the tissue shrinks and shortens them, resulting in tightening of the mucosal tissue. Over time, new collagen strands may grow as part of the body’s natural response to the activation of fibroblasts that results from the application of low-energy hyperthermic RF energy. These new strands may add strength and produce additional tissue tightening over the next one to three months. This tightening of the tissue has the potential to reduce vaginal laxity and increase sexual function.

The Viveve System

The Viveve System includes three major components: an RF generator housed in a table-top console, a reusable handpiece and a single-use treatment tip, as well as several other consumable accessories. Physicians attach the single-use treatment tip to the handpiece, which is connected to the console. The generator authenticates the treatment tip and programs the system for the desired treatment without further physician intervention.

● Radiofrequency Generator. The generator produces a six-megahertz signal and is simple and efficient to operate. Controls are within easy reach, and important user information is clearly displayed on the console’s built-in display, including energy delivered, tissue impedance, duration and feedback on procedure technique. Cooling is achieved, in conjunction with the generator, though the delivery of a coolant that helps to cool and protect the mucosa during a procedure.

● Handpiece. The reusable handpiece holds the treatment tip in place and processes information about temperature, contact, cooling system function and other important data. A precision control valve within the handpiece meters the delivery of coolant, which protects the mucosal surface.

● Treatment Tip. The single-use treatment tip is available in one size and comes pre-sterilized. Each treatment tip contains a proprietary internal EPROM, or programmable memory chip, which stores treatment parameters and safety limits in order to optimize performance and safety. To enhance procedural safety, we have programmed the EPROM for single-use treatments. Using the same treatment tip to perform multiple procedures could result in injury, therefore, the EPROM disables the treatment tip after a pre-programmed number of pulses to ensure that the treatment tip is not reused.

The Viveve System also includes other consumable components. The console houses a canister of coolant that can be used for approximately five to six procedures. Each procedure requires a new return pad, which is typically adhered to the patient’s upper leg to allow a path of travel for the RF current through the body and back to the generator. We also sell proprietary single-use bottles of coupling fluid, a viscous liquid that helps ensure electrical and thermal contact with the treatment tip.

The Viveve Treatment

The Viveve Treatment is conducted on an outpatient basis in a physician’s office. The procedure typically takes less than 30 minutes and does not require any form of anesthesia. To perform the procedure, a physician attaches the single-use treatment tip to the handpiece. The return pad is then adhered to the patient’s upper leg to allow a path of travel for the RF current back to the generator. Prior to treatment, the treatment area is bathed in coupling fluid, which is used for conduction and lubrication. The area from the 1:00 o’clock position to the 11:00 o’clock position just inside the hymenal ring is treated using the Viveve Treatment Tip by delivering a three-phased pulse: Phase 1 – cooling, Phase 2 – 90 Joules/cm2 of RF energy, and Phase 3 – cooling. Each pulse lasts approximately eight seconds. The Viveve treatment tip is then repositioned in an overlapping fashion clockwise and the three-phased treatment pulse is repeated. The entire circumferential treatment area from the 1:00 o’clock position to the 11:00 o’clock position is treated five times with overlapping pulses. Treatment of the urethral area is avoided. During the treatment procedure patients are expected to feel a sensation of warmth when the RF phase is delivered and a cooling sensation when the cooling phases are delivered. Based on our current clinical results, the Viveve Treatment is only required once, with efficacy lasting for at least 12 months.

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Benefits of the Viveve Solution

Our solution for vaginal laxity provides a number of benefits for physicians and patients:

● Non-Invasive, Non-Ablative Alternative to Surgery with No Identified Safety Issues. The Viveve Treatment has been used to treat over 55 clinical patients and physician users have reported use of the Viveve Treatment on approximately 350 additional patients as of September 30, 2014. The procedure is non-invasive and offers an alternative to surgery at a much lower price with little or no downtime from the patient’s normal routine. It is also a non-ablative procedure that does not damage either the mucosal or sub-mucosal tissue or require any form of anesthesia.

● Single Treatment. The Viveve Treatment is normally performed in a medical office setting as a single treatment that takes less than 30 minutes to complete. Our studies have shown that the clinical effect from our procedure occurs within one to three months and patients continue to report improvements over a period of six months following treatment. In addition, our studies have shown that the Viveve Treatment maintains its effect for at least 12 months, based upon currently available data from our clinical studies.

● Compelling Physician Economics. We believe that in an era of declining government and insurance reimbursement, many physicians are seeking to add effective and safe, self-pay procedures to their practices. The Viveve System can be easily adapted into many physician practices and offers compelling per-procedure economics for the physician, despite requiring a small capital equipment purchase.

● Ease of Use. The Viveve System offers an easy-to-use, straightforward user interface that allows a trained physician to perform the treatment in less than 30 minutes. The Viveve System provides real-time feedback and can be monitored during the treatment. The handpiece and single-use treatment tip are designed with a small profile for accurate placement during treatment, comfort and ease of use.

Business Strategy

Our goal is to become the leading provider of non-invasive solutions to treat vaginal laxity by:

● Increasing the Installed Base of Viveve Systems. In our existing markets, we plan to expand the number of Viveve Systems from our initial base of early adopters by leveraging our current and future clinical study results and through innovative marketing programs directed at both physicians and patients. As a condition that has historically had no viable, non-invasive solutions, we intend to focus much of our marketing effort on physician and patient education. Further, we intend to expand the number of regulatory approvals both internationally and in the U.S., to further increase the areas in which we can market the Viveve System.

● Driving Increased Treatment Tip Usage. Unlike the capital equipment model of other businesses, we maintain an active, continuous relationship with our physician customer base because of the single-use, disposable nature of the treatment tips. We work collaboratively with our physician customer base to increase treatment tip usage by enhancing customer awareness and facilitating the marketing efforts of our physician customers to their patients. We believe that our customers’ interests are closely aligned with our interests, and we plan to monitor the market to foster continued procedure growth for our customers and treatment tip sales for us. We intend to launch innovative marketing programs with physician customers to develop a profitable Viveve Treatment practice.

● Broadening Our Physician Customer Base. While our initial focus is on marketing our procedure to the OBGYN specialty, we intend to selectively expand our sales efforts into other physician specialties, such as plastic surgery, dermatology and general surgery and family practice. Additionally, we intend to pursue sales from physician-directed medi-spas with track records of safe and successful aesthetic treatments.

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● Developing New Treatment Tips and System Enhancements. We intend to continue to expand our line of treatment tips to allow for even shorter procedure times to benefit both physicians and patients. We also plan to pursue potential system modifications and next generation enhancements that will further increase the ease-of-use of the Viveve System.

Investing in Intellectual Property and Patent Protection. We will continue to invest in expanding our intellectual property portfolio, and we intend to file for additional patents to strengthen our intellectual property rights. Areas in which we may pursue additional patent protection include, but are not limited to, redesign of certain system components, disposable components and software algorithms. We believe that our intellectual property rights protect our position as the exclusive provider of a vaginal laxity treatment using monopolar RF technology in the U.S. and in many other countries. (See the discussion under the heading “Patents and Proprietary Technology”.)

Corporate Information

The address of our corporate headquarters is 150 Commercial Street, Sunnyvale, California 94086 and our telephone number is (408) 530-1900. Our website can be accessed at www.viveve.com. The information contained on, or that may be obtained from, our website is not a part of this prospectus.

Reverse Stock Split

Except where otherwise indicated, all share and per share data in this prospectus reflect the one for 100 reverse stock split effected on September 23, 2014.

Defined Terms

The following capitalized terms used throughout this prospectus are defined as follows:

“Commission” refers to the Securities and Exchange Commission.

“Exchange Act” refers to the Securities Exchange Act of 1934, as amended.

“Merger” refers to the merger of PLC Systems Acquisition Corp., a wholly-owned subsidiary of PLC Systems Inc., with and into Viveve, Inc. which occurred on September 23, 2014. In conjunction with the Merger, we changed our name from PLC Systems Inc. to Viveve Medical, Inc. For a complete description of the Merger, please refer to the Current Report on Form 8-K we filed with the Commission on September 29, 2014.

“OBGYN” refers, depending on its use, to the field of obstetrics and gynecology or to physicians who practice obstetrics and gynecology.

“Private Offering” refers to the private offering of common stock and, pursuant to an agreement with 22 of the 31 investors who participated in the Private Offering, warrants for the purchase of common stock that we completed on September 23, 2014. We sold a total of 11,406,932 shares of common stock (of which 11,305,567 shares of our common stock were issued as a result of beneficial ownership limitations), together with warrants for the purchase of 940,189 shares of common stock, at a price of $0.53 per share, raising approximately $6 million in gross proceeds, which includes the conversion of up to $1.5 million in outstanding debt. For a complete description of the Private Offering, please refer to the Current Report on Form 8-K we filed with the Commission on September 29, 2014. We are filing the registration statement of which this prospectus is a part to register the common stock and the common stock underlying the warrants that we sold in the Private Offering.

“Securities Act” refers to the Securities Act of 1933, as amended.

“Viveve System” refers to the equipment we developed for the purpose of administering the Viveve Treatment. The Viveve System consists of an RF generator with cooling capability and a handpiece that, in conjunction with a single-use treatment tip, regulates the application of RF energy and monitors treatment data. Please refer to the discussion in this prospectus titled “Our Business” for further information relating to the Viveve System.

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“Viveve Treatment” refers to our painless non-invasive solution for the treatment of vaginal laxity. The Viveve Treatment can be performed in less than 30 minutes and does not require the use of anesthesia. In countries where the Viveve Treatment is approved, it can be performed in a medical office setting by, or under the supervision of, trained and qualified physicians, that may include obstetricians and gynecologists, plastic surgeons, dermatologists, general surgeons, urologists, urogynecologists or family practitioners. Please refer to the discussion in this prospectus titled “Our Business” for further information relating to the Viveve Treatment.

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The Offering

Securities Offered	12,347,121 shares of our common stock offered by the selling stockholders, including 940,189 shares of common stock underlying warrants.
Common Stock Outstanding	17,161,673 shares as of November 19, 2014(1)
Common Stock to be Outstanding Immediately after the Offering	17,161,673 shares(1)
Terms of the Offering	The selling stockholders will determine when and how they will sell the common stock offered in this prospectus.  The selling stockholders will sell at prevailing market prices through the OTCQB marketplace, or such other markets as may be offered by the OTC Markets Group or other national exchange that we may apply to following the effective date of the registration statement of which this prospectus is a part, or at privately negotiated prices in transactions that are not in the public market.
Termination of the Offering	The offering will conclude upon the earliest of (i) such time as all of the common stock has been sold pursuant to the registration statement or (ii) such time as all of the common stock becomes eligible for resale without volume limitations pursuant to Rule 144 under the Securities Act, or any other rule of similar effect.
Trading Market	Our common stock is traded on the OTCQB market under the symbol “VIVMF”.
Use of Proceeds	We are not selling any shares of the common stock covered by this prospectus.  We will not receive any of the offering proceeds from the registration of the shares of common stock covered by this prospectus. If any selling stockholder exercises a warrant, we will receive the exercise price.
Dividend Policy	We have never declared any cash dividends on our common stock. We currently intend to retain all available funds and any future earnings for use in financing the growth of our business and do not anticipate paying any cash dividends for the foreseeable future. See “Dividend Policy” in the section of this prospectus titled “Market for our Common Equity and Related Stockholder Matters”.
Risk Factors	The common stock offered hereby involves a high degree of risk, and investors should read and consider these risks before making an investment decision.  See “Risk Factors” beginning on page 7.

(1) Excludes 2,294,534 shares of common stock issuable upon exercise of outstanding options and 1,693,887 shares of common stock issuable upon exercise of outstanding warrants, and issuances of additional shares of common stock subsequent to November 19, 2014.

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Summary Financial Information

The table below includes historical selected financial data for each of the years ended December 31, 2013 and 2012, derived from our audited financial statements included elsewhere in this prospectus. The table below also includes historical financial data for the nine-month period ended September 30, 2014, derived from our unaudited financial statements included elsewhere in this prospectus. As a result of the Merger, Viveve, Inc. is considered the accounting acquirer in the Merger and the assets and liabilities and the historical operations that are reflected in our financial statements are those of Viveve, Inc. Therefore, the historical financial data of Viveve, Inc. is deemed to be our historical financial data.

You should read the historical selected financial information presented below in conjunction with the section of this prospectus titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the notes to those financial statements included elsewhere in this prospectus. Historical results are not necessarily indicative of the results that may be expected for any future period.

Statements of Operations Data            

	For the Nine Months Ended				For the Years Ended December 31,
	September 30, 2014			2013			2012
	(unaudited)
Revenue	$	64,475		$	152,270		$	249,408
Cost of revenue		40,075			182,329			118,272
Gross margin		24,400			(30,059	)		131,136
Operating expenses		4,026,534			3,900,929			4,473,054
Loss from operations		(4,002,134	)		(3,930,988	)		(4,341,918	)
Interest income		5			8			527
Interest expense		(486,582	)		(447,340	)		(743,359	)
Other income, net		51,312			61,541			124,731
Net loss	$	(4,437,399	)	$	(4,316,779	)	$	(4,960,019	)

Balance Sheet Data            

	For the Nine Months Ended September 30,			For the Years Ended December 31,
	2014			2013			2012
	(unaudited)
Cash and cash equivalents	$	1,976,980		$	430,107		$	448,754
Working capital (deficit)		(119,758	)		(6,855,258	)		(2,538,272	)
Total assets		3,149,346			1,137,760			1,060,679
Total liabilities		2,425,396			8,445,383			4,138,951
Total stockholders’ equity (deficit)	$	723,950		$	(7,307,623	)	$	(3,078,272	)

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WHERE YOU CAN FIND MORE INFORMATION

We are subject to the informational requirements of the Exchange Act and file annual, quarterly and current reports and other information with the Commission. You can read our filings, including the registration statement of which this prospectus is a part, over the internet at the Commission’s website at www.sec.gov. You may also read and copy any document we file with the Commission at its public reference facility at 100 F Street, N.E., Washington, D.C., 20549, on official business days during the hours of 10:00 a.m. to 3:00 p.m. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the Commission at 100 F Street, N.E., Washington, D.C., 20549. Please call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference facility. If you do not have internet access, requests for copies of such documents should be directed to Mr. Scott Durbin, our Chief Financial Officer, at Viveve Medical, Inc., 150 Commercial Street, Sunnyvale, California 94086; Tel: (408)-530-1900.

Statements contained in this prospectus concerning the provisions of any documents are summaries of those documents and are not necessarily complete. We refer you to the documents filed with the Commission for more information.

RISK FACTORS

Investing in our common stock involves a high degree of risk. Prospective investors should carefully consider the risks described below, together with all of the other information included or referred to in this prospectus, before purchasing shares of our common stock. There are numerous and varied risks that may prevent us from achieving our goals. If any of these risks actually occurs, our business, financial condition or results of operations may be materially adversely affected. In such case, the trading price of our common stock could decline and investors in our common stock could lose all or part of their investment.

Risks Related to Our Business

We are dependent upon the success of the Viveve System, which has a limited commercial history. If the Viveve System fails to gain or loses market acceptance, our business will suffer.

In 2012, we began marketing the Viveve System in Canada, Hong Kong and Japan, and we expect that sales of the Viveve System, including the single-use Viveve treatment tips, will account for substantially all of our revenue for the foreseeable future. The Viveve System may not significantly penetrate current or new markets, including the U.S. and elsewhere. If demand for the Viveve System does not increase as we anticipate, or if demand declines, our business, financial condition and results of operations will be harmed.

Performing clinical studies on, and collecting data from, the Viveve Treatment is inherently subjective, and we have limited data regarding the efficacy of the Viveve System. If future data is not positive or consistent with our prior experience, rates of physician adoption will likely be harmed.

We believe that in order to significantly grow our business, we will need to conduct future clinical studies of the effectiveness of the Viveve System. Clinical studies of vaginal laxity and sexual function are subject to a number of limitations. First, these studies do not involve objective standards for measuring the effectiveness of treatment. Subjective, patient reported outcomes are the most common method of evaluating effectiveness. As a result, clinical studies may conclude that a treatment is effective even in the absence of objective measures. Second, as with other non-invasive, energy-based devices, the effect of the Viveve Treatment varies from patient to patient and can be influenced by a number of factors, including the age, ethnicity and level of vaginal laxity and sexual function of the patient among other things.

Current published studies of the Viveve System conducted in the U.S. and Japan have investigated the tissue-tightening effect of Viveve’s monopolar RF technology using single-arm studies, which were not randomized, blinded or controlled. Clinical studies designed in a randomized, blinded and controlled fashion represent the gold-standard in clinical trial design, which most effectively assess the efficacy of a product or therapy versus a placebo group. Future clinical studies, which may be required to drive physician adoption or support regulatory clearance or approval, may require randomized, blinded and controlled trial designs. Since we have not tested the Viveve Treatment under these trial design conditions, we cannot be certain that the outcomes will be positive. Negative outcomes would have a material, adverse impact on our business.

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Additionally, we have not conducted any head-to-head clinical studies that compare results from treatment with the Viveve System to surgery or treatment with other therapies. Without head-to-head studies against competing alternative treatments, which we have no current plans to conduct, potential customers may not find clinical studies of our technology sufficiently compelling to purchase the Viveve System. If we decide to pursue additional studies in the future, such studies could be expensive and time consuming, and the data collected may not produce favorable or compelling results. If the results of such studies do not meet physicians’ expectations, the Viveve System may not become widely adopted, physicians may recommend alternative treatments for their patients, and our business may be harmed.

We currently do not have the ability to market the Viveve System in the U.S. If we want to sell the Viveve System and single-use treatment tips in the U.S., we will need to obtain FDA clearance or approval, which may not be granted.

Developing and promoting the Viveve System in additional areas, including the U.S., is a key element of our future growth strategy. We currently do not have U.S. Food and Drug Administration, or FDA, clearance or approval in the U.S. to market the Viveve System. We are in the process of seeking clearance or approval from the FDA to expand our marketing efforts. We cannot predict whether we will receive such clearances or approvals. The FDA will require us to conduct clinical trials to support regulatory clearance or approval, which trials may be time-consuming and expensive, and may produce results that do not result in clearance or approval of our FDA application. In the event that we do not obtain FDA clearance or approval, we will be unable to promote the Viveve System in the U.S. and the ability to grow our revenues may be adversely affected.

Our business is not currently profitable, and we may not be able to achieve profitability even if we are able to generate significant revenue.

Through September 30, 2014, we incurred losses since inception of approximately $34.3 million. In 2013, we incurred a loss of $4.3 million and in 2012 a loss of $5.0 million. Despite increasing revenue, we expect to incur significant additional losses while we grow and expand our business. We cannot predict if and when we will achieve profitability. Our failure to achieve and sustain profitability could negatively impact the market price of our common stock and may require us to seek additional financing for our business. There are no assurances that we will be able to obtain any additional financing or that any such financing will be on terms that are favorable to us.

It is difficult to forecast future performance, which may cause our financial results to fluctuate unpredictably.

Our limited operating history makes it difficult to predict future performance. Additionally, the demand for the Viveve System may vary from quarter to quarter. A number of factors, over which we have limited or no control, may contribute to fluctuations in our financial results, such as:

● delays in receipt of anticipated purchase orders;

● performance of our independent distributors;

● positive or negative media coverage of the Viveve System, the Viveve Treatment or products of our competitors;

● our ability to obtain further regulatory clearances or approvals;

● delays in, or failure of, product and component deliveries by our subcontractors and suppliers;

● customer response to the introduction of new product offerings; and

● fluctuations in foreign currency.

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Our limited operating history has limited our ability to determine an appropriate sales price for our products.

Our historical operating performance has limited our ability to determine the proper sales prices for the Viveve System and the single-use treatment tips. Establishing appropriate pricing for our capital equipment and components has been challenging because there have not existed directly comparable competitive products. We may experience similar pricing challenges in the future as we enter new markets or introduce new products, which could have an unanticipated negative impact on our financial performance.

If there is not sufficient patient demand for our treatments, practitioner demand for the Viveve System could drop, resulting in unfavorable operating results.

Most procedures performed using the Viveve System are elective procedures, the cost of which must be borne by the patient, and are not reimbursable through government or private health insurance. The decision to undergo the Viveve Treatment is thus driven by consumer demand, which may be influenced by a number of factors, such as:

● our sales and marketing efforts directed toward consumers, for which we have limited experience and resources;

● the extent to which physicians recommend the Viveve Treatment to their patients;

● the cost, safety and effectiveness of a Viveve Treatment versus alternative treatments;

● general consumer sentiment about the benefits and risks of such procedures; and

● consumer confidence, which may be impacted by economic and political conditions.

Our financial performance could be materially harmed in the event that any of the above factors discourage patients from seeking the Viveve Treatment.

The failure of the Viveve System to meet patient expectations or the occurrence of unpleasant side effects from the Viveve Treatment could impair our financial performance.

Our future success depends upon patients having a positive experience with the Viveve Treatment in order to increase physician demand for our products, as a result of positive feedback and word-of-mouth referrals. Patients may be dissatisfied if their expectations of the procedure, side effects and results, among other things, are not met. Despite the safety of the Viveve Treatment, patients may experience undesirable side-effects such as temporary swelling or reddening of the treated tissue. Experiencing any of these side effects could discourage a patient from completing a Viveve Treatment or discourage a patient from having future procedures or referring Viveve Treatments to others. In order to generate referral business, we believe that patients must be satisfied with the effectiveness of the Viveve Treatment. Results obtained from a Viveve Treatment are subjective and may be subtle. The Viveve Treatment may produce results that may not meet patients’ expectations. If patients are not satisfied with the procedure or feel that it is too expensive for the results obtained, our reputation and future sales will suffer.

Our success depends on growing physician adoption of the Viveve System and continued use of treatment tips.

Some of our target physician customers already own self-pay device products. Our ability to grow our business and convince physicians to purchase the Viveve System depends on the success of our sales and marketing efforts. Our business model involves both a capital equipment purchase of the Viveve System and continued purchases by our customers of single-use treatment tips and ancillary consumables. This may be a novel business model for many potential customers who may be used to competing products that are exclusively capital equipment, such as many laser-based systems. We must be able to demonstrate that the cost of the Viveve System and the revenue that the physician can derive from performing procedures using it are compelling when compared to the cost and revenue associated with alternative products or therapies. When marketing to plastic surgeons, we must also, in some cases, overcome a bias against non-invasive procedures. If we are unable to increase physician adoption of the Viveve System and use of the treatment tips, our financial performance will be adversely affected.

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To successfully market and sell the Viveve System internationally, we must address many issues with which we have limited experience.

Sales outside the U.S. accounted for 100% of our revenue during the nine months ended September 30, 2014 and during the years ended December 31, 2013 and 2012. We believe that a significant portion of our business will continue to come from sales outside the U.S. through increased penetration in countries where we currently sell the Viveve System, combined with expansion into new international markets. However, international sales are subject to a number of risks, including:

● difficulties in staffing and managing international operations;

● difficulties in penetrating markets in which our competitors’ products may be more established;

● reduced or no protection for intellectual property rights in some countries;

● export restrictions, trade regulations and foreign tax laws;

● fluctuating foreign currency exchange rates;

● foreign certification and regulatory clearance or approval requirements;

● difficulties in developing effective marketing campaigns for unfamiliar, foreign countries;

● customs clearance and shipping delays;

● political and economic instability; and

● preference for locally produced products.

If one or more of these risks were realized, it could require us to dedicate significant resources to remedy the situation, and even if we are able to find a solution, our revenues may still decline.

To market and sell the Viveve System internationally, we depend on distributors, and they may not be successful.

We currently depend exclusively on third-party distributors to sell and service the Viveve System internationally and to train our international customers, and if these distributors terminate their relationships with us or under-perform, we may be unable to maintain or increase our level of international revenue. We will also need to engage additional international distributors to grow our business and expand the territories in which we sell the Viveve System. Distributors may not commit the necessary resources to market, sell and service the Viveve System to the level of our expectations. If current or future distributors do not perform adequately, or if we are unable to engage distributors in particular geographic areas, our revenue from international operations will be adversely affected.

We currently have limited sales and marketing resources or experience and failure to build and manage a sales force or to market and distribute the Viveve System effectively could have a material adverse effect on our business.

We expect to rely on a direct sales force to sell the Viveve System in the U.S. In order to meet our future anticipated sales objectives, we expect to grow our domestic sales organization significantly over the next several years. There are significant risks involved in building and managing our sales organization, including risks related to our ability to:

● hire qualified individuals as needed;

● provide adequate training for the effective sale of the Viveve System; and

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● retain and motivate sales employees.

In addition, the Viveve System competes with products that are well-established in the market. Accordingly, it is difficult to predict how well our sales force will perform. Our failure to adequately address these risks could have a material adverse effect on our ability to sell the Viveve System, causing our revenue to be lower than expected and harming our results of operations.

We compete against companies that have more established products, longer operating histories and greater resources, which may prevent us from achieving significant market penetration or increased operating results.

The medical device and aesthetics markets are highly competitive and dynamic, and are marked by rapid and substantial technological development and product innovations. Demand for the Viveve System could be diminished by equivalent or superior products and technologies offered by competitors. Specifically, the Viveve System competes against other offerings in these markets, including laser and other light-based medical devices, pharmaceutical and consumer products, surgical procedures and exercise therapies.

Competing in these markets could result in price-cutting, reduced profit margins and loss of market share, any of which would harm our business, financial condition and results of operations. Our ability to compete effectively depends upon our ability to distinguish our company and the Viveve System from our competitors and their products, on such factors as:

● safety and effectiveness;

● product pricing;

● success of our marketing initiatives;

● compelling clinical data;

● intellectual property protection;

● quality of customer support; and

● development of successful distribution channels, both domestically and internationally.

Some of our competitors have more established products and customer relationships than we have, which could inhibit our market penetration efforts. For example, we may encounter situations where, due to pre-existing relationships, potential customers decide to purchase additional products from our competitors. Potential customers also may need to recoup the cost of expensive products that they have already purchased from our competitors and thus may decide not to purchase, or to delay the purchase of, the Viveve System. If we are unable to achieve continued market penetration, we will be unable to compete effectively and our business will be harmed.

In addition, some of our current and potential competitors have significantly greater financial, research and development, manufacturing, and sales and marketing resources than we have. Our competitors could utilize their greater financial resources to acquire other companies to gain enhanced name recognition and market share, as well as new technologies or products that could effectively compete with our existing product. Given the relatively few competitors currently in the market, any such action could exacerbate existing competitive pressures, which could harm our business.

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Competition among providers of devices for the medical device and aesthetics markets is characterized by rapid innovation, and we must continuously innovate the Viveve System and develop new products or our revenue may decline.

While we attempt to protect the Viveve System through patents and other intellectual property rights, there are few barriers to entry that would prevent new entrants or existing competitors from developing products that compete directly with our products. For example, while we believe our monopolar RF technology maintains a strong intellectual property position, there may be other companies employing competing technologies which claim to have a similar clinical effect to our technology. Additionally, there are others who may market monopolar RF technology for competing purposes in a direct challenge to our intellectual property position. As we continue to create market demand for a non-surgical, non-invasive way to treat vaginal laxity and sexual dysfunction, competitors may enter the market with other products making similar or superior claims. We expect that any competitive advantage we may enjoy from our current and future innovations may diminish over time, as companies successfully respond to our innovations, or create their own. Consequently, we believe that we will have to continuously innovate and improve the Viveve System and technology or develop new products to compete successfully. If we are unable to develop new products or innovate successfully, the Viveve System could become obsolete and our revenue will decline as our customers purchase competing products.

We outsource the manufacturing and repair of key elements of the Viveve System to a single manufacturing partner.

We outsource the manufacture and repair of the Viveve System to a single contract manufacturer, Stellartech Research Corporation. If Stellartech’s operations are interrupted or if Stellartech is unable to meet our delivery requirements due to capacity limitations or other constraints, we may be limited in our ability to fulfill new customer orders or to repair equipment at current customer sites. Stellartech has limited manufacturing capacity, is itself dependent upon third-party suppliers and is dependent on trained technical labor to effectively repair components making up the Viveve System. In addition, Stellartech is a medical device manufacturer and is required to demonstrate and maintain compliance with the FDA’s Quality System Regulation, or QSR. If Stellartech fails to comply with the FDA’s QSR, its manufacturing and repair operations could be halted. In addition, both the availability of our product to support the fulfillment of new customer orders as well as our ability to repair those products installed at current customer sites would be impaired. In addition, as of the date of this prospectus, the development and manufacturing agreement under which Viveve and Stellartech operate has expired without any subsequent extension or renewal by the parties and the minimum conditions to the licenses granted therein have not been satisfied by us. Although the parties continue to operate under the terms of this agreement, our manufacturing operations could be adversely impacted if we are unable to enforce Stellartech’s performance under this agreement, or enter into a new agreement with Stellartech upon favorable terms.

Our manufacturing operations and those of our key manufacturing subcontractors are dependent upon third-party suppliers, making us vulnerable to supply shortages and price fluctuations, which could harm our business.

The single source supply of the Viveve System from Stellartech could not be replaced without significant effort and delay in production. Also, several other components and materials that comprise the Viveve System are currently manufactured by a single supplier or a limited number of suppliers. In many of these cases, we have not yet qualified alternate suppliers and we rely upon purchase orders, rather than long-term supply agreements. A supply interruption or an increase in demand beyond our current suppliers’ capabilities could harm our ability to manufacture the Viveve System until new sources of supply are identified and qualified. Our reliance on these suppliers subjects us to a number of risks that could harm our business, including:

● interruption of supply resulting from modifications to or discontinuation of a supplier’s operations;

● delays in product shipments resulting from uncorrected defects, reliability issues or a supplier’s variation in a component;

● a lack of long-term supply arrangements for key components with our suppliers;

● inability to obtain adequate supply in a timely manner, or to obtain adequate supply on commercially reasonable terms;

● difficulty locating and qualifying alternative suppliers for our components in a timely manner;

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● production delays related to the evaluation and testing of products from alternative suppliers, and corresponding regulatory qualifications;

● delay in delivery due to suppliers prioritizing other customer orders over our orders;

● damage to our brand reputation caused by defective components produced by our suppliers;

● increased cost of our warranty program due to product repair or replacement based upon defects in components produced by our suppliers; and

● fluctuation in delivery by our suppliers due to changes in demand from us or from their other customers.

Any interruption in the supply of components or materials, or our inability to obtain substitute components or materials from alternate sources at acceptable prices in a timely manner, could impair our ability to meet the demand of our customers, which would have an adverse effect on our business.

If, in the future, we decide to perform additional manufacturing functions internally that we currently outsource, our business could be harmed by our limited manufacturing experience and related capabilities.

In the future, for financial or operational purposes, we may elect to perform component or system manufacturing functions internally. Our limited experience with manufacturing processes could lead to difficulties in producing sufficient quantities of manufactured items that meet our quality standards and that comply with applicable regulatory requirements in a timely and cost-effective manner. In addition, if we experience these types of manufacturing difficulties, it may be expensive and time consuming to engage a new or previous subcontractor or supplier to fulfill our replacement manufacturing needs. The occurrence of any of these events could harm our business.

If the Viveve System malfunctions or if we discover a manufacturing defect that could lead to a malfunction, we may have to initiate a product recall or replace components, which could adversely impact our business.

Problems in our manufacturing processes, or those of our manufacturing partners or subcontractors, which lead to an actual or possible malfunction in any of the components of the Viveve System, may require us to recall product from customers or replace components and could disrupt our operations. For example, in December 2012, we began replacing handpiece assemblies that were causing system malfunctions due to fiber optic damage that occurred during the manufacturing process. We subsequently worked with our manufacturing partner to redesign and test the reliability of the newly designed handpiece. The problem was resolved within several weeks and did not have a significant impact on our ability to supply products to our customers or, more generally, on our results of operations. However, our results of operations, reputation and market acceptance of our products could be harmed if we encounter difficulties in manufacturing that result in a more significant issue or significant patient injury, and delays our ability to fill customer orders.

We may not be able to develop an alternative cooling module that will be in compliance with changing environmental regulations in a timely or cost-effective manner.

Our cooling module relies upon a hydroflurocarbon, or HFC, called R134a, to protect the outer layer of the tissue from over-heating while the device delivers RF energy to the submucosal tissue. New environmental regulations phasing out HFCs over the next decade have been adopted or are under consideration in a number of countries, and since 2007, European Union directives require the phase-out of HFCs and prohibit the introduction of new products incorporating HFCs. If we are unable to develop an alternative cooling module for our device which is not dependent on HFCs in a timely or cost-effective manner, the Viveve System may not be in compliance with environmental regulations, which could result in fines, civil penalties and the inability to sell our products in certain major international markets.

In addition, the impending restrictions on HFCs have reduced their current availability, as suppliers have lower incentive to expand production capacity or maintain existing capacity. This change in supply could expose us to supply shortages or increased prices for R134a, which could impair our ability to manufacture the Viveve System and adversely affect our results or operations. HFCs may also be classified by some countries as a hazardous substance and subject to significant shipping surcharges that may negatively impact profit margins.

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We forecast sales to determine requirements for components and materials used in the Viveve System, and if our forecasts are incorrect, we may experience delays in shipments or increased inventory costs.

We keep limited materials, components and finished product on hand. To manage our manufacturing operations with our suppliers, we forecast anticipated product orders and material requirements to predict our inventory needs up to six months in advance and enter into purchase orders on the basis of these requirements. Our limited historical experience may not provide us with enough data to accurately predict future demand. If our business expands, our demand for components and materials would increase and our suppliers may be unable to meet our demand. If we overestimate our component and material requirements, we will have excess inventory, which would increase our expenses. If we underestimate our component and material requirements, we may have inadequate inventory, which could interrupt, delay or prevent delivery of the Viveve System to our customers. Any of these occurrences would negatively affect our financial performance and the level of satisfaction that our customers have with our business.

Even though we require training for users of the Viveve System and we do not sell the Viveve System to non-physicians, there exists a potential for misuse, which could harm our reputation and our business.

Outside of the U.S., our independent distributors sell in many jurisdictions that do not require specific qualifications or training for purchasers or operators of the Viveve System. We do not supervise the procedures performed with the Viveve System, nor can we be assured that direct physician supervision of our equipment occurs according to our recommendations. We and our distributors require purchasers of the Viveve System to undergo an initial training session as a condition of purchase, but do not require ongoing training. In addition, we prohibit the sale of the Viveve System to companies that rent the Viveve System to third parties, but we cannot prevent an otherwise qualified physician from contracting with a rental company in violation of his or her purchase agreement with us.

In the U.S., we intend to only sell the Viveve System to licensed physicians who have met certain training requirements. However, current Federal regulations will allow us to sell the Viveve System to “licensed practitioners.” The definition of “licensed practitioners” varies from state to state. As a result, the Viveve System may be operated by licensed practitioners with varying levels of training, and in many states by non-physicians, including physician assistants, registered nurses and nurse practitioners. Thus, in some states, the definition of “licensed practitioner” may result in the legal use of the Viveve System by non-physicians.

The use of the Viveve System by non-physicians, as well as noncompliance with the operating guidelines set forth in our training programs, may result in product misuse and adverse treatment outcomes, which could harm our reputation and expose us to costly product liability litigation.

Product liability suits could be brought against us due to defective design, labeling, material or workmanship, or misuse of the Viveve System, and could result in expensive and time-consuming litigation, payment of substantial damages and an increase in our insurance rates.

If the Viveve System is defectively designed, manufactured or labeled, contains defective components or is misused, we may become subject to substantial and costly litigation by our customers or their patients. Misusing the Viveve System or failing to adhere to operating guidelines could cause serious adverse events. In addition, if our operating guidelines are found to be inadequate, we may be subject to liability. We may, in the future, be involved in litigation related to the use of the Viveve System. Product liability claims could divert management’s attention from our business, be expensive to defend and result in sizable damage awards against us. We may not have sufficient insurance coverage for all future claims. We may not be able to obtain insurance in amounts or scope sufficient to provide us with adequate coverage against all potential liabilities. Any product liability claims brought against us, with or without merit, could increase our product liability insurance rates or prevent us from securing continuing coverage, could harm our reputation in the industry and reduce product sales. Product liability claims in excess of our insurance coverage would be paid out of cash reserves, harming our financial condition and adversely affecting our operating results.

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After-market modifications to treatment tips by third parties and the development of counterfeit products could reduce our sales, expose us to product liability litigation and dilute our brand quality.

Third parties may introduce adulterated after-market modifications to our treatment tips, which enable re-use of treatment tips in multiple procedures. Because the treatment tips are designed to withstand a finite number of pulses, modifications intended to increase the number of pulses could result in patient injuries caused by the use of worn-out or damaged treatment tips. In addition, third parties may seek to develop counterfeit products that are compatible with the Viveve System and available to practitioners at lower prices. If security features incorporated into the design of the Viveve System are unable to prevent after-market modifications to the treatment tips or the introduction of counterfeit products, we could be subject to reduced sales, product liability lawsuits resulting from the use of damaged or defective goods and damage to our reputation.

We depend on skilled and experienced personnel to operate our business effectively. If we are unable to recruit, hire and retain these employees, our ability to manage and expand our business will be harmed, which would impair our future revenue and profitability.

Our success largely depends on the skills, experience and efforts of our officers and other key employees. While we have employment contracts with our Chief Executive Officer and our Chief Financial Officer, these officers and other key employees may terminate their employment at any time. The loss of any senior management team members could weaken our management expertise and harm our business.

Our ability to retain our skilled labor force and our success in attracting and hiring new skilled employees will be a critical factor in determining whether we will be successful in the future. We may not be able to meet our future hiring needs or retain existing personnel. We will face particularly significant challenges and risks in hiring, training, managing and retaining engineering and sales and marketing employees, as well as independent distributors, most of whom are geographically dispersed and must be trained in the use and benefits of the Viveve System. Failure to attract and retain personnel, particularly technical and sales and marketing personnel, would materially harm our ability to compete effectively and grow our business.

Any acquisitions that we make could disrupt our business and harm our financial condition.

We expect to evaluate potential strategic acquisitions of complementary businesses, products or technologies. We may also consider joint ventures and other collaborative projects. We may not be able to identify appropriate acquisition candidates or strategic partners, or successfully negotiate, finance or integrate acquisitions of any businesses, products or technologies. Furthermore, the integration of any acquisition and management of any collaborative project may divert management’s time and resources from our business and disrupt our operations. We do not have any experience with acquiring companies or products. If we decide to expand our product offerings , we may spend time and money on projects that do not increase our revenues.

Risks Related to Regulatory Matters

We may be unable to obtain or maintain international regulatory qualifications or approvals for our current or future products, which could harm our business.

Sales of the Viveve System internationally are subject to foreign regulatory requirements that vary widely from country to country. In addition, the FDA regulates exports of medical devices from the U.S. Complying with international regulatory requirements can be an expensive and time-consuming process, and approval is not certain. The time required to obtain clearances or approvals, if required by other countries, may be longer than that required for FDA clearance or approvals, and requirements for such clearances or approvals may significantly differ from FDA requirements. We may rely on third-party distributors to obtain all regulatory clearances and approvals required in other countries, and these distributors may be unable to obtain or maintain such clearances or approvals. Our distributors may also incur significant costs in attempting to obtain and in maintaining foreign regulatory approvals or qualifications, which could increase the difficulty of attracting and retaining qualified distributors. If our distributors experience delays in receiving necessary qualifications, clearances or approvals to market our products outside the U.S., or if they fail to receive those qualifications, clearances or approvals, we may be unable to market our products or enhancements in international markets effectively, or at all.

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Foreign governmental authorities that regulate the manufacture and sale of medical devices have become increasingly stringent and, to the extent we market and sell our products outside of the U.S., we may be subject to rigorous international regulation in the future. In these circumstances, we would be required to rely on our foreign independent distributors to comply with the varying regulations, and any failures on their part could result in restrictions on the sale of our product in foreign countries.

If we fail to maintain regulatory approvals and clearances, or if we are unable to obtain, or experience significant delays in obtaining, FDA clearances or approvals for the Viveve System or any future products we may develop or acquire, including product enhancements, our business and results of operations could be adversely affected.

The Viveve System is, and any future products we may acquire or develop will be, subject to rigorous regulation by the FDA and numerous other federal, state and foreign governmental authorities. The process of obtaining regulatory clearances or approvals to market a medical device can be costly and time consuming, and we may not be able to obtain these clearances or approvals on a timely basis, if at all. In particular, the FDA permits commercial distribution of a new medical device only after the device has received clearance under Section 510(k) of the Federal Food, Drug and Cosmetic Act, approval of a de novo reclassification petition, or is the subject of an approved premarket approval application, or PMA, unless the device is specifically exempt from those requirements. The FDA will clear marketing of a lower risk medical device through the 510(k) process if the manufacturer demonstrates that the new product is substantially equivalent to other 510(k)-cleared products. High risk devices deemed to pose the greatest risk, such as life-sustaining, life-supporting, or implantable devices, or devices not deemed substantially equivalent to a previously cleared device, require the approval of a PMA. The PMA process is more costly, lengthy and uncertain than the 510(k) clearance process. A PMA application must be supported by extensive data, including, but not limited to, technical, preclinical, clinical trial, manufacturing and labeling data, to demonstrate to the FDA’s satisfaction the safety and efficacy of the device for its intended use.

If there is no known predicate for a device, a company can request a de novo reclassification of the product. De novo generally applies where there is no predicate device and the FDA believes the device is sufficiently safe so that no PMA should be required. FDA’s de novo process has just been streamlined to allow a company to request that a new product classification be developed based on information provided by the requesting company. Our plan is to utilize the Direct De Novo process for the Viveve System. However, we cannot predict when or if such approval will be obtained, or whether FDA will create a new product code. Failure to approve the de novo petition, or establishment of a new product code could require us to seek a PMA for the Viveve System. Delays in receipt or failure to receive clearances or approvals could reduce our sales, profitability and future growth prospects.

If we modify an FDA-cleared device, we may need to seek and obtain new clearances, which, if not granted, would prevent the sale of our modified product or require us to redesign the product.

Any modifications to an FDA-cleared device that could significantly affect its safety or effectiveness or that would constitute a major change in its intended use would require a new 510(k) clearance or possibly a premarket approval. Viveve may not be able to obtain additional 510(k) clearances or premarket approvals for new products or for modifications to, or additional indications for, our existing product in a timely fashion, or at all. Delays in obtaining future clearances would adversely affect our ability to introduce new or enhanced products in a timely manner, which in turn could harm our revenue and potential future profitability. We have made modifications to our device in the past and may make additional modifications in the future that we believe do not or will not require additional clearances or approvals. If the FDA disagrees, and requires new clearances or approvals for the modifications, we may be required to recall and to stop marketing the modified device, which could harm our operating results and require us to redesign the product.

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Clinical trials necessary to support a 510(k) or a PMA application will be expensive and will require the enrollment of large numbers of patients. Suitable patients may be difficult to identify and recruit. Delays or failures in our clinical trials will prevent us from commercializing any modified or new products and will adversely affect our business, operating results and prospects.

The FDA has asked us to conduct an investigational device exemption, or IDE, study to support a future product submission for the Viveve System. Initiating and completing clinical trials necessary to support a 510(k) or a PMA application for the Viveve System, as well as other possible future product candidates, will be time consuming and expensive and the outcome is uncertain. Moreover, the results of early clinical trials are not necessarily predictive of future results, and any product we advance into clinical trials may not have favorable results in later clinical trials.

Conducting successful clinical studies will require the enrollment of patients, and suitable patients may be difficult to identify and recruit. Patient enrollment in clinical trials and completion of patient participation and follow-up depends on many factors, including the size of the patient population, the nature of the trial protocol, the attractiveness of, or the discomforts and risks associated with, the treatments received by enrolled subjects, the availability of appropriate clinical trial investigators, support staff, and proximity of patients to clinical sites and ability to comply with the eligibility and exclusion criteria for participation in the clinical trial and patient compliance. For example, patients may be discouraged from enrolling in our clinical trials if the trial protocol requires them to undergo extensive post-treatment procedures or follow-up to assess the safety and effectiveness of our product or if they determine that the treatments received under the trial protocols are not attractive or involve unacceptable risk or discomfort.

Development of sufficient and appropriate clinical protocols to demonstrate safety and efficacy are required and we may not adequately develop such protocols to support clearance and approval. Further, the FDA may require us to submit data on a greater number of patients than we originally anticipated and/or for a longer follow-up period or change the data collection requirements or data analysis applicable to our clinical trials. Delays in patient enrollment or failure of patients to continue to participate in a clinical trial may cause an increase in costs and delays in the approval and attempted commercialization of our product or result in the failure of the clinical trial. In addition, despite considerable time and expense invested in clinical trials, the FDA may not consider our data adequate to demonstrate safety and efficacy. Such increased costs and delays or failures could adversely affect our business, operating results and prospects.

If the third parties on which we rely to conduct our clinical trials and to assist us with pre-clinical development do not perform as contractually required or expected, we may not be able to obtain the regulatory clearance or approval which would permit us to commercialize our products.

We do not have the ability to independently conduct the pre-clinical and clinical trials for our product, therefore we must rely on third parties, such as contract research organizations, medical institutions, clinical investigators and contract laboratories to conduct the trials. If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected deadlines, if these third parties need to be replaced, or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our pre-clinical development activities or clinical trials may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory approval for, or be able to successfully commercialize, our product on a timely basis, if at all. In that event, our business, operating results and prospects may be adversely affected.

The results of our clinical trials may not support our proposed product claims or may result in the discovery of adverse side effects.

Even if our clinical trials are completed as planned, it cannot be certain that the results of the clinical trials will support our proposed claims for the Viveve System or that the FDA or foreign authorities will agree with our conclusions regarding them. Success in pre-clinical studies and early clinical trials does not ensure that later clinical trials will be successful, and we cannot be sure that the later trials will replicate the results of prior trials and pre-clinical studies. The clinical trial process may fail to demonstrate that our product is safe and effective for the proposed indicated uses. Any delay of our clinical trials or failure to support our product claims will delay, or even prevent, our ability to commercialize our product and generate revenues.

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Even if our product is approved by regulatory authorities, if we or our suppliers fail to comply with ongoing FDA or other foreign regulatory authority requirements, or if we experience unanticipated problems with our product, the product could be subject to restrictions or withdrawal from the market.

Any product for which we obtain clearance or approval, and the manufacturing processes, reporting requirements, post-approval clinical data and promotional activities for such product, will be subject to continued regulatory review, oversight and periodic inspections by the FDA and other domestic and foreign regulatory bodies, such as the Food and Drug Branch of the California Department of Health Services, or CDHS. In particular, we and our suppliers are required to comply with the FDA’s QSR, and International Standards Organization, or ISO, regulations for the manufacture of our product and other regulations which cover the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging, storage and shipping of any product for which we obtain clearance or approval. Regulatory bodies, such as the FDA, enforce the QSR and other regulations through periodic inspections. In the past, our facility has been inspected by the FDA and CDHS, and observations were noted. The FDA and CDHS have accepted our responses to these observations, and we believe that we are in substantial compliance with the QSR. Any future failure by us or one of our suppliers to comply with applicable statutes and regulations administered by the FDA and other regulatory bodies, or the failure to timely and adequately respond to any adverse inspectional observations or product safety issues, could result in, among other things, any of the following enforcement actions:

● untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;

● unanticipated expenditures to address or defend such actions

● customer notifications for repair, replacement or refunds;

● recall, detention or seizure of our products;

● operating restrictions or partial suspension or total shutdown of production;

● refusing or delaying our requests for 510(k) clearance or premarket approval of new products or modified products;

● operating restrictions;

● withdrawing 510(k) clearances on PMA approvals that have already been granted;

● refusal to grant export approval for our product; or

● criminal prosecution.

If any of these actions were to occur it would harm our reputation and cause our product sales to suffer and may prevent us from generating revenue. Furthermore, our third party manufacturers may not currently be, or may not continue to be, in compliance with all applicable regulatory requirements which could result in a failure to produce our product on a timely basis and in the required quantities, if at all.

Even if regulatory clearance or approval of a product is granted for the Viveve System or future products, such clearance or approval may be subject to limitations on the intended uses for which the product may be marketed and reduce our potential to successfully commercialize the product and generate revenue from the product. If the FDA determines that our promotional materials, labeling, training or other marketing or educational activities constitute promotion of an unapproved use, it could request that we cease or modify our training or promotional materials or subject us to regulatory enforcement actions. It is also possible that other federal, state or foreign enforcement authorities might take action if they consider our training or other promotional materials to constitute promotion of an unapproved use, which could result in significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement.

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In addition, we may be required to conduct costly post-market testing and surveillance to monitor the safety or effectiveness of our products, and we must comply with medical device reporting requirements, including the reporting of adverse events and malfunctions related to our products. Later discovery of previously unknown problems with our products, including unanticipated adverse events or adverse events of unanticipated severity or frequency, manufacturing problems, or failure to comply with regulatory requirements such as QSR, may result in changes to labeling, restrictions on such products or manufacturing processes, withdrawal of the products from the market, voluntary or mandatory recalls, a requirement to repair, replace or refund the cost of any medical device we manufacture or distribute, fines, suspension of regulatory approvals, product seizures, injunctions or the imposition of civil or criminal penalties which would adversely affect our business, operating results and prospects.

The Viveve System may also be subject to state regulations which are, in many instances, in flux. Changes in state regulations may impede sales. For example, federal regulations may allow the Viveve System to be sold to, or on the order of, “licensed practitioners,” as determined on a state-by-state basis. As a result, in some states, non-physicians may legally purchase and operate the Viveve System. However, a state could change its regulations at any time, disallowing sales to particular types of end users. We cannot predict the impact or effect of future legislation or regulations at the federal or state levels.

If we or our third-party manufacturers fail to comply with the FDA’s Quality System Regulation, our business would suffer.

We and our third-party manufacturers are required to demonstrate and maintain compliance with the FDA’s QSR. The QSR is a complex regulatory scheme that covers the methods and documentation of the design, testing, control, manufacturing, labeling, quality assurance, packaging, storage and shipping of our product. The FDA enforces the QSR through periodic unannounced inspections. We anticipate that in the future we will be subject to such inspections. Our failure, or the failure of our third-party manufacturers, to take satisfactory corrective action in response to an adverse QSR inspection could result in enforcement actions, including a public warning letter, a shutdown of our manufacturing operations, a recall of our product, civil or criminal penalties or other sanctions, which would cause our reputation, sales and business to suffer.

If our product causes or contributes to a death or a serious injury, or malfunctions in certain ways, we will be subject to medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions.

Under the FDA medical device reporting regulations, medical device manufacturers are required to report to the FDA information that a device has or may have caused or contributed to a death or serious injury or has malfunctioned in a way that would likely cause or contribute to death or serious injury if the malfunction of the device were to recur. If we fail to report these events to the FDA within the required timeframes, or at all, the FDA could take enforcement action against us. Any such adverse event involving the Viveve System or future products could result in future voluntary corrective actions, such as recalls or customer notifications, or agency action, such as inspection or enforcement action. Any corrective action, whether voluntary or involuntary, as well as mounting a defense to a legal action, if one were to be brought, would require the dedication of our time and capital, distract management from operating our business, and may harm our reputation and financial results.

The Viveve System may, in the future, be subject to product recalls that could harm our reputation, business and financial results.

The FDA and similar foreign governmental authorities have the authority to require the recall of commercialized products in the event of material deficiencies or defects in design or manufacture. In the case of the FDA, the authority to require a recall must be based on an FDA finding that there is a reasonable probability that the device would cause serious injury or death. In addition, foreign governmental bodies have the authority to require the recall of our product in the event of material deficiencies or defects in design or manufacture. Manufacturers may, under their own initiative, recall a product if any material deficiency in a device is found. A government-mandated or voluntary recall by us or one of our distributors could occur as a result of component failures, manufacturing errors, design or labeling defects or other deficiencies and issues. A recall of our product would divert managerial and financial resources and have an adverse effect on our financial condition and results of operations. The FDA requires that certain classifications of recalls be reported to the FDA within 10 working days after the recall is initiated. Companies are required to maintain certain records of recalls, even if they are not reportable to the FDA. In the future, we may initiate one or more voluntary recalls involving our product that we determine do not require notification to the FDA. If the FDA disagrees with our determinations, they could require us to report those actions as recalls. A future recall announcement could harm our reputation with customers and negatively affect our sales. In addition, the FDA could take enforcement action for failing to report the recalls when they were conducted.

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Federal and state regulatory reforms may adversely affect our ability to sell our product profitably.

From time to time, legislation is drafted and introduced in Congress that could significantly change the statutory provisions governing the clearance or approval, manufacture and marketing of a medical device. In addition, FDA regulations and guidance are often revised or reinterpreted by the agency in ways that may significantly affect our business and our product. It is impossible to predict whether legislative changes will be enacted or FDA regulations, guidance or interpretations changed, and what the impact of such changes, if any, may be.

For example, in August 2010, the FDA issued its preliminary recommendations on reform of the 510(k) premarket notification process for medical devices. On January 19, 2011, the FDA announced its “Plan of Action” for implementing these recommendations. The Plan of Action included 25 action items, including revising existing guidance or developing guidance to clarify various aspects of the 510(k) process and to streamline the review process for innovative, lower risk products (the “de novo” process); improving training for the Center for Devices and Radiological Health staff; increasing reliance on external experts; and addressing and improving internal processes. The FDA has already begun implementing many of these reforms, and may implement other reforms in the future. Future reforms could have the effect of making it more difficult and expensive for us to obtain 510(k) clearance.

In addition, a state could change its regulations at any time, disallowing sales to particular types of end users. We cannot predict the impact or effect of future legislation or regulations at the federal or state levels.

Failure to comply with the U.S. Foreign Corrupt Practices Act and similar laws associated with our activities outside the U.S. could subject us to penalties and other adverse consequences.

A significant portion of our revenues is and will be from jurisdictions outside of the U.S. We are subject to the U.S. Foreign Corrupt Practices Act, or the FCPA, which generally prohibits U.S. companies and their intermediaries from making payments to foreign officials for the purpose of directing, obtaining or keeping business, and requires companies to maintain reasonable books and records and a system of internal accounting controls. The FCPA applies to companies and individuals alike, including company directors, officers, employees and agents. Under the FCPA, U.S. companies may be held liable for the corrupt actions taken by employees, strategic or local partners or other representatives. In addition, the government may seek to rely on a theory of successor liability and hold us responsible for FCPA violations committed by companies or associated with assets which we acquire.

In many foreign countries where we operate, particularly in countries with developing economies, it may be a local custom for businesses to engage in practices that are prohibited by the FCPA or other similar laws and regulations. In contrast, we have implemented a company policy requiring our employees and consultants to comply with the FCPA and similar laws. Although we have not conducted formal FCPA compliance training, we are in the process of devising a training schedule for certain of our employees, agents and partners. Nevertheless, there can be no assurance that our employees, partners and agents, as well as those companies to which we outsource certain of our business operations, will not take actions in violation of the FCPA or our policies for which we may be ultimately held responsible. As a result of our anticipated growth, our development of infrastructure designed to identify FCPA matters and monitor compliance is at an early stage. If we or our intermediaries fail to comply with the requirements of the FCPA or similar legislation, governmental authorities in the U.S. and elsewhere could seek to impose civil and/or criminal fines and penalties which could have a material adverse effect on our reputation, business, operating results and financial conditions. We may also face collateral consequences, such as debarment and the loss of our export privileges.

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Risks Related to Our Intellectual Property

Intellectual property rights may not provide adequate protection for the Viveve System, which may permit third parties to compete against us more effectively.

We rely on patent, copyright, trade secret and trademark laws and confidentiality agreements to protect our technology and the Viveve System. We have an exclusive license to 8 issued U.S. patents primarily covering the Viveve System and methods of use, the earliest of which expire in 2015; 3 pending U.S. patent applications, 12 issued foreign patents and 17 pending foreign patent applications, some of which foreign applications preserve an opportunity to pursue patent rights in multiple countries. Some of the Viveve System components are not, and in the future may not be, protected by patents. Additionally, our patent applications may not issue as patents or, if issued, may not issue in a form that will be advantageous to us. Any patents we obtain may be challenged, invalidated or legally circumvented by third parties. Consequently, competitors could market products and use manufacturing processes that are substantially similar to, or superior to, ours. We may not be able to prevent the unauthorized disclosure or use of our technical knowledge or other trade secrets by consultants, vendors, former employees or current employees, despite the existence generally of confidentiality agreements and other contractual restrictions. Monitoring unauthorized uses and disclosures of our intellectual property is difficult, and we do not know whether the steps we have taken to protect our intellectual property will be effective. Moreover, we do not have patent rights in all foreign countries in which a market may exist, and where we have applied for foreign patent rights, the laws of many foreign countries will not protect our intellectual property rights to the same extent as the laws of the U.S.

In addition, competitors could purchase the Viveve System and attempt to replicate some or all of the competitive advantages we derive from our development efforts, willfully infringe our intellectual property rights, design around our protected technology or develop their own competitive technologies that fall outside of our intellectual property rights. If our intellectual property is not adequately protected so as to defend our market against competitors’ products and methods, our competitive position and business could be adversely affected.

We may be involved in future costly intellectual property litigation, which could impact our future business and financial performance.

Our industry has been characterized by frequent intellectual property litigation. Our competitors or other patent holders may assert that the Viveve System and the methods we employ are covered by their patents. If the Viveve System or methods are found to infringe, we could be prevented from marketing the Viveve System. In addition, we do not know whether our competitors or potential competitors have applied for, or will apply for or obtain, patents that will prevent, limit or interfere with our ability to make, use, sell, import or export the Viveve System. We may also initiate litigation against third parties to protect our intellectual property that may be expensive, protracted or unsuccessful. In the future there may be companies that market products for competing purposes in direct challenge to our intellectual property position, and we may be required to initiate litigation in order to stop them. If we initiate litigation to protect our rights, we run the risk of having our patents invalidated, which would undermine our competitive position.

Litigation related to infringement and other intellectual property claims, with or without merit, is unpredictable, can be expensive and time-consuming and could divert management’s attention from our business. If we lose this kind of litigation, a court could require us to pay substantial damages, and prohibit us from using technologies essential to the Viveve System, any of which would have a material adverse effect on our business, results of operations and financial condition. In that event, we do not know whether necessary licenses would be available to us on satisfactory terms, or whether we could redesign the Viveve System or processes to avoid infringement.

Competing products may also appear in other countries in which our patent coverage might not exist or be as strong. If we lose a foreign patent lawsuit, we could be prevented from marketing the Viveve System in one or more countries.

In addition, we may hereafter become involved in litigation to protect our trademark rights associated with our name or the names used with the Viveve System. Names used with the Viveve System and procedures may be claimed to infringe names held by others or to be ineligible for proprietary protection. If we have to change the name of the company or the Viveve System, we may experience a loss in goodwill associated with our brand name, customer confusion and a loss of sales.

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Risks Related to our Securities

Public company compliance may make it more difficult to attract and retain officers and directors.

The Sarbanes-Oxley Act and rules implemented by the Commission have required changes in corporate governance practices of public companies. As a public company, these rules and regulations increase our compliance costs and make certain activities more time consuming and costly. As a public company, these rules and regulations may make it more difficult and expensive for us to maintain our director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers, and to maintain insurance at reasonable rates, or at all.

We may not be able to timely and effectively implement controls and procedures required by Section 404 of the Sarbanes-Oxley Act of 2002.

We are subject to Section 404 of the Sarbanes-Oxley Act of 2002. The standards required for a public company under Section 404 of the Sarbanes-Oxley Act of 2002 are significantly more stringent than those required of us prior to the Merger. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that are applicable to us as a result of the Merger. If we are not able to implement the requirements of Section 404 in a timely manner or with adequate compliance, we may not be able to assess whether our internal controls over financial reporting are effective, which may subject us to adverse regulatory consequences and could harm investor confidence and the market price of our common stock.

Concentration of ownership of our common stock may have the effect of delaying or preventing a change in control.

Since the Merger was consummated, 5AM Ventures II (in conjunction with 5AM Co-Investors II), and GBS Venture Partners Limited, both of whom were equity and convertible debenture holders of Viveve, Inc., together own approximately 58.4% of our outstanding common stock. As a result, these stockholders, acting together, have the ability to determine the outcome of corporate actions requiring stockholder approval. This concentration of ownership may have the effect of delaying or preventing a change in control and might adversely affect the market price of our common stock.

We are a holding company with no business operations of our own and we depend on cash flow from Viveve, Inc. to meet our obligations.

As a result of the Merger, we are a holding company with no business operations of our own or material assets other than the stock we own in Viveve, Inc. All of our operations are conducted by Viveve, Inc. As a holding company, we will require dividends and other payments from our subsidiary to meet cash requirements. The terms of any agreements governing indebtedness that we may enter into may restrict our subsidiary from paying dividends and otherwise transferring cash or other assets to us. If there is an insolvency, liquidation or other reorganization of our subsidiary, our stockholders likely will have no right to proceed against its assets. Creditors of our subsidiary will be entitled to payment in full from the sale or other disposal of the assets of our subsidiary before we, as an equity holder, would be entitled to receive any distribution from that sale or disposal. If Viveve, Inc. is unable to pay dividends or make other payments to us when needed, we will be unable to satisfy our obligations.

Because we are incorporated in Canada, you may not be able to enforce judgments against us and our Canadian directors.

Under Canadian law, you may not be able to enforce a judgment issued by courts in the U.S. against us or our Canadian directors. The status of the law in Canada is unclear as to whether a U.S. citizen can enforce a judgment from a U.S. court in Canada for violations of U.S. securities laws. A separate suit may need to be brought directly in Canada.

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Our stock price may be volatile.

The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following:

● actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

● changes in the market’s expectations about our operating results;

● success of competitors;

● our operating results failing to meet the expectation of securities analysts or investors in a particular period;

● changes in financial estimates and recommendations by securities analysts concerning our business, the market for our products, the health services industry, or the healthcare and health insurance industries in general;

● operating and stock price performance of other companies that investors deem comparable to us;

● our ability to market new and enhanced products on a timely basis;

● changes in laws and regulations affecting our business;

● commencement of, or involvement in, litigation involving us;

● changes in our capital structure, such as future issuances of securities or the incurrence of debt;

● the volume of shares of our common stock available for public sale;

● any major change in our board of directors or management;

● sales of substantial amounts of common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and

● general economic and political conditions such as recessions, fluctuations in interest rates and international currency fluctuations.

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.

Our shares of common stock are thinly traded, the price may not reflect our value, and there can be no assurance that there will be an active market for our shares of common stock either now or in the future.

Our shares of common stock are thinly traded, our common stock is available to be traded and is held by a small number of holders, and the price may not reflect our actual or perceived value. There can be no assurance that there will be an active market for our shares of common stock either now or in the future. The market liquidity will be dependent on the perception of our operating business, among other things. We will take certain steps including utilizing investor awareness campaigns, investor relations firms, press releases, road shows and conferences to increase awareness of our business. Any steps that we might take to bring us to the awareness of investors may require that we compensate consultants with cash and/or stock. There can be no assurance that there will be any awareness generated or the results of any efforts will result in any impact on our trading volume. Consequently, investors may not be able to liquidate their investment or liquidate it at a price that reflects the value of the business, and trading may be at an inflated price relative to the performance of the Company due to, among other things, the availability of sellers of our shares. If an active market should develop, the price may be highly volatile. Because there is currently a relatively low per-share price for our common stock, many brokerage firms or clearing firms are not willing to effect transactions in the securities or accept our shares for deposit in an account. Many lending institutions will not permit the use of low priced shares of common stock as collateral for any loans.

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Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.

If our stockholders sell substantial amounts of our common stock in the public market, including shares issuable upon the effectiveness of the registration statement relating to this prospectus, upon the expiration of any statutory holding period under Rule 144, or shares issued upon the exercise of outstanding options or warrants, it could create a circumstance commonly referred to as an “overhang” and, in anticipation of which, the market price of our common stock could fall. The existence of an overhang, whether or not sales have occurred or are occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.

In general, under Rule 144, a non-affiliated person who has held restricted shares of our common stock for a period of six months may sell into the market all of their shares, subject to the Company being current in our periodic reports filed with the Commission. As of November 19, 2014, approximately 1,706,286 shares of common stock of the 17,161,673 shares issued and outstanding were free trading.

Upon effectiveness of the registration statement relating to this prospectus, up to 12,347,121 shares of common stock held by the selling stockholders will become freely tradable without restriction under the Securities Act.

In addition, as of November 19, 2014, there were 1,693,887 shares subject to outstanding warrants, 2,294,534shares subject to outstanding options and an additional 839,148 shares reserved for future issuance under our 2013 Employee Stock Option and Incentive Plan, as amended, that will become eligible for sale in the public market to the extent permitted by any applicable vesting requirements and Rule 144 under the Securities Act.

We do not expect to declare or pay dividends in the foreseeable future.

We have never paid cash dividends on our common stock and have no plans to do so in the foreseeable future. We intend to retain any earnings to develop, carry on, and expand our business.

Penny stock rules may make buying or selling our common stock difficult, and severely limit its marketability and liquidity.

Because our securities are considered a penny stock, stockholders will be more limited in their ability to sell their shares. The Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. Because our securities constitute “penny stocks” within the meaning of the rules, the rules apply to us and to our securities. The rules may further affect the ability of owners of shares to sell our securities in any market that might develop for them. As long as the trading price of our common shares is less than $5.00 per share, the common shares will be subject to Rule 15g-9 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the Commission, that:

● contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

● contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws;

● contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;

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● contains a toll-free telephone number for inquiries on disciplinary actions;

● defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and

● contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation.

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such shares; and (d) a monthly account statement showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our shares.

Forward-Looking Statements

This prospectus contains forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “would,” “should,” “could,” “may” or other similar expressions in this prospectus. In particular, forward-looking statements include statements relating to future actions, prospective products and applications, customers, technologies, future performance or future financial results. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

● our limited cash and our history of losses;

● our ability to achieve profitability;

● our limited operating history;

● emerging competition and rapidly advancing technology;

● whether we are successful in having our medical device approved for sale by the FDA;

● whether demand develops for our medical device;

● the impact of competitive or alternative products, technologies and pricing;

● the adequacy of protections afforded to us by the patents that we own and the cost to us of maintaining, enforcing and defending those patents;

● our ability to obtain, expand and maintain patent protection in the future, and to protect our non-patented intellectual property;

● our exposure to and ability to defend third-party claims and challenges to our patents and other intellectual property rights;

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● our ability to obtain adequate financing in the future, as and when we need it;

● our ability to continue as a going concern;

● our success at managing the risks involved in the foregoing items; and

● other factors discussed in this prospectus.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The forward-looking statements are based upon management’s beliefs and assumptions and are made as of the date of this prospectus. We undertake no obligation to publicly update or revise any forward-looking statements included in this prospectus to conform such statements to actual results or changes in our expectations. You should not place undue reliance on these forward-looking statements.

USE OF PROCEEDS

This prospectus relates to 12,347,121 shares of our common stock that may be offered and sold from time to time by the selling stockholders. The proceeds from the sales will belong to the selling stockholders. This prospectus includes 940,189 shares of common stock underlying warrants held by the selling stockholders. The warrants exercise price is $0.53 per share. If any selling stockholder exercises his or her warrant, we will receive the proceeds of the warrant exercise, which will be used for general corporate purposes. Any proceeds received by a selling stockholder in the resale of the common stock underlying the warrant will belong to the selling stockholder. We will bear the costs of preparing and filing the registration statement, of which this prospectus is a part.

SELLING STOCKHOLDERS

This prospectus relates to the possible resale by the selling stockholders of 12,347,121 shares of our common stock, which includes 940,189 shares of common stock underlying warrants held by the selling stockholders. Each of the warrants has a term of five years and an exercise price of $0.53 per share. The selling stockholders, may, from time to time, offer and sell pursuant to this prospectus any or all of the shares that they hold. The selling stockholders may sell some, all or none of their shares. We do not know how long the selling stockholders will hold the shares before selling them. We have no agreements, arrangements or understandings with the selling stockholders regarding the sale of any of their shares.

The following table presents information regarding the selling stockholders and the shares that they may offer and sell from time to time under this prospectus. The table is prepared based on information supplied to us by the selling stockholders, and reflects their holdings as of November 19, 2014.

With the exception of Brigitte Smith, who is a director, and 5AM Ventures II, LLC, Alta Bioequities, L.P. and GBS Venture Partners Limited, each of which owns more than 10% of our common stock, none of the selling stockholders or any of their affiliates currently holds an executive office, or has any other material relationship, with us or any of our predecessors or affiliates.

As used in this prospectus, the term “selling stockholders” includes each of the selling stockholders and any donees, pledgees, transferees or other successors in interest selling shares received after the date of this prospectus from the selling stockholders as a gift, pledge or other non-sale related transfer. Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated by the Commission under the Exchange Act. The percentage of shares beneficially owned prior to the offering is based on 17,161,673 shares of our common stock outstanding as of November 19, 2014.

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Selling Stockholder	Shares Beneficially Owned Before this Offering	% of Outstanding Shares Beneficially Owned Before this Offering	Shares to be Sold in this Offering	% of Outstanding Shares Beneficially Owned After this Offering
5AM Ventures II, LLC(17)	6,660,205	38.81%	5,017,677	9.57%
Alta BioEquities, L.P.(18)	1,895,788	11.05%	1,895,788	-
GBS Venture Partners Limited as trustee for GBS BioVentures III(19)	3,598,807(37)	20.97%	947,872	15.45%
G-TEN Partners LLC(20)	566,038(38)	3.30%	566,038	-
5AM Co-Investors II(21)	262,798	1.53%	197,987	0.38%
Brigitte Smith	192,262(39)	1.12%	192,262	-
Michael Catalano	144,197	0.84%	144,197	-
Shahram Gholami	144,197	0.84%	144,197	-
BRIO Capital Master Fund Ltd.(22)	282,699(1)	1.64%	282,699(1)
Alpha Capital Anstalt(23)	923,046(2)	5.31%	714,713(2)	1.21%
GCP IV, LLC(24)	1,128,682(40)	6.58%	390,316	4.30%
Barry Honig	529,898(3)	3.06%	529,898(3)	0.46%
Sandor Capital Master Fund(25)	483,114(4)	2.79%	404,701(4)	-
Joseph I Kazarnovsky	193,125(5)	1.12%	123,681(5)	0.40%
Denville and Dover Fund LLC(26)	113,080(6)	0.66%	113,080(6)	-
Fortis Business Holdings LLC(27)	106,012(7)	0.62%	106,012(7)	-
Starcity Capital LLC(28)	106,012(7)	0.62%	84,810(8)	-
Robert S. Colman Trust(29)	84,810(8)	0.49%	84,810(8)	-
Chaim H. Rausman	104,008(9)	0.61%	70,675(9)	0.19%
BEB Holdings, LLC(30)	56,540(10)	0.33%	56,540(10)	-
American European Insurance Co.(31)	73,840(11)	0.43%	53,007(11)	0.12%
LRFI LLC(32)	28,270(12)	0.16%	28,270(12)	-
Gila Silber	28,270(12)	0.16%	28,270(12)	-
Leon Frenkel	37,937(12)	0.16%	28,270(12)	0.06%
Triage Capital Management L.P.(33)	36,603(12)	0.21%	28,270(12)	0.05%
Alexander Hasenfeld Profit Sharing Plan(34)	34,459(13)	0.20%	24,737(13)	0.06%
Richard Molinsky	21,202(14)	0.12%	21,202(14)	-
Gordon Holmes	21,202(14)	0.12%	21,202(14)	-
Nachum Stein	24,613(15)	0.14%	17,669(15)	0.04%
Cranshire Capital Master Fund Ltd.(35)	17,669(15)	0.10%	17,669(15)	-
HSI Partnership(36)	14,769(16)	0.09%	10,602(16)	0.02%
TOTAL	17,914,152		12,347,121

(1) The number of shares to be sold in this offering includes 94,019 shares of common stock underlying a warrant.

(2) The number of shares to be sold in this offering includes 235,047 shares of common stock underlying a warrant.

(3) The number of shares to be sold in this offering includes 173,934 shares of common stock underlying a warrant.

(4) The number of shares to be sold in this offering includes 131,626 shares of common stock underlying a warrant.

(5) The number of shares to be sold in this offering includes 41,133 shares of common stock underlying a warrant.

(6) The number of shares to be sold in this offering includes 37,608 shares of common stock underlying a warrant.

(7) The number of shares to be sold in this offering includes 35,257 shares of common stock underlying a warrant.

(8) The number of shares to be sold in this offering includes 28,206 shares of common stock underlying a warrant.

(9) The number of shares to be sold in this offering includes 23,505 shares of common stock underlying a warrant.

(10) The number of shares to be sold in this offering includes 18,804 shares of common stock underlying a warrant.

(11) The number of shares to be sold in this offering includes 17,629 shares of common stock underlying a warrant.

(12) The number of shares to be sold in this offering includes 9,402 shares of common stock underlying a warrant.

(13) The number of shares to be sold in this offering includes 8,227 shares of common stock underlying a warrant.

(14) The number of shares to be sold in this offering includes 7,051 shares of common stock underlying a warrant.

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(15) The number of shares to be sold in this offering includes 5,876 shares of common stock underlying a warrant.

(16) The number of shares to be sold in this offering includes 3,526 shares of common stock underlying a warrant.

(17) 5AM Partners II, LLC is the general partner of 5AM Ventures II, L.P. . Dr. John Diekman, Andrew Schwab and Dr. Scott Rocklage, the managing members of 5AM Partners II, LLC, and Mr. Colella, an assignee of 5AM Partners II, LLC, have shared voting and investment power over the shares beneficially owned by 5AM Ventures II, L.P.

(18) Alta BioEquities Management is the general partner of Alta BioEquities, L.P. Daniel Janney is Managing Director of Alta BioEquities Management and has voting and investment power over the shares beneficially owned by Alta BioEquities, L.P.

(19) Brigitte Smith is the Managing Partner of GBS Venture Partners and has voting and investment power over the shares beneficially owned by GBS BioVentures III.

(20) Voting and investment power over these securities is held by Ethan Benovitz and Jaime Hartman, as managing members of G-TEN Partners LLC.

(21) 5AM Partners II, LLC is the general partner of 5AM Co-Investors II, L.P. Dr. John Diekman, Andrew Schwab and Dr. Scott Rocklage, the managing members of 5AM Partners II, LLC, and Mr. Colella, an assignee of 5AM Partners II, LLC, have shared voting and investment power over the shares beneficially owned by 5AM Co-Investors II, L.P.

(22) Disclosure regarding voting and investment control will be provided by amendment

(23) Voting and investment power over these securities is held by Konrad Ackermann, Director of Alpha Capital Anstalt.

(24) Voting and investment power over these securities is held by Ethan Benovitz and Jaime Hartman, as managing members of GCP IV, LLC.

(25) Voting and investment power over these securities is held by John S. Lemak, Manager of Sandor Capital Master Fund.

(26) Voting and investment power over these securities is held by Harvey Kesner, member of Denville and Dover Fund, LLC.

(27) Voting and investment power over these securities is held by Sarah Rosenfeld and Joel Kestenbaum, member of Fortis Business Holdings LLC.

(28) Voting and investment power over these securities is held by Yoseph Levin, Managing Member of Starcity Capital LLC.

(29) Voting and investment power over these securities is held by Robert S. Colman, trustee of the Robert S. Colman Trust.

(30) Disclosure regarding voting and investment control will be provided by amendment.

(31) Voting and investment power over these securities is held by Nachum Stein, Chairman of American European Insurance Co.

(32) Voting and investment power over these securities is held by Leslie Rieder, Managing Member of LRFI LLC.

(33) Voting and investment power over these securities is held by Leon Frenkel, Senior Manager of Triage Capital Management, L.P.

(34) Voting and investment power over these securities is held by Nachum Stein, Chairman of Alexander Hasenfeld Profit Sharing Plan.

(35) Cranshire Capital Adivsors, LLC (“CCA”) is the investment manager of Cranshire Capital Master Fund, Ltd. (“Cranshire Master Fund”) and has voting control and investment discretion over securities held by Cranshire Master Fund. Mitchell P. Kopin (“Mr. Kopin”), the president, the sole member and the sole member of the Board of Managers of CCA, has voting control over CCA. As a result, each of Mr. Kopin and CCA may be deemed to have beneficial ownership of the securities held by Cranshire Master Fund.

(36) Voting and investment power over these securities is held by Nachum Stein, Chairman of HSI Partnership.

(37) The number of shares beneficially owned includes 943,596 shares of common stock underlying a warrant.

(38) Includes 566,038 shares of common stock the selling stockholder has the right to acquire pursuant to the terms and conditions of a Right to Shares Agreement by and between the Company and the selling stockholder, dated as of September 23, 2014. Voting and investment power over these securities is held by Ethan Benovitz and Jaime Hartman, as managing members of G-TEN Partners LLC.

(39) Excludes 3,598,807 shares of common stock owned of record by GBS Venture Partners Limited, which is a selling stockholder, and options to purchase an aggregate of 47,000 shares of common stock underlying options of which 3,917 are exercisable within 60 days of the date of the registration statement of which this prospectus is a part.

(40) Includes 1,128,682 shares of common stock the selling stockholder has the right to acquire pursuant to the terms and conditions of a Right to Shares Agreement by and between the Company and the selling stockholder. Voting and investment power over these securities is held by Ethan Benovitz and Jaime Hartman, as managing members of GCP IV, LLC.

PLAN OF DISTRIBUTION

Each selling stockholder of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on the OTCPink or the OTCQB platform of the OTC Markets Group, Inc. or any other stock exchange, market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A selling stockholder may use any one or more of the following methods when selling securities:

● ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

● block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;

● purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

● an exchange distribution in accordance with the rules of the applicable exchange;

● privately negotiated transactions;

● settlement of short sales;

● in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security;

● through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

● a combination of any such methods of sale; or

● any other method permitted pursuant to applicable law.

The selling stockholders may also sell securities under Rule 144 under the Securities Act, if available, rather than under this prospectus.

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Broker-dealers engaged by the selling stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.

In connection with the sale of the securities or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The selling stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The selling stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each selling stockholder has informed us that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities.

We are required to pay certain fees and expenses incurred by us incident to the registration of the securities and the selling stockholders will bear all brokerage or underwriting discounts or commissions paid to broker-dealers in connection with the sale of the shares. We have agreed to indemnify the selling stockholders and each selling stockholder has agreed, severally and not jointly, to indemnify us against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.

Because the selling stockholders may be deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. The selling stockholders have advised us that there is no underwriter or coordinating broker acting in connection with the proposed sale of the resale securities by the selling stockholders.

We agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the selling stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the common stock by the selling stockholders or any other person. We will make copies of this prospectus available to the selling stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

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MARKET FOR OUR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

As of November 20, 2014, our common stock is trading on the OTCQB market under the symbol “VIVMF”. Prior to October 22, 2014, our common stock traded under the symbol “PLCSF” and “PLCSD”. As of November 19, 2014 there were 653 holders of record of our common stock.

The following table sets forth the high and low bid prices for our common stock for the periods indicated as reported by the OTC Markets. The bid quotations reported by the OTC Markets reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions. The bid quotations reflect the reverse stock split we effected on September 23, 2014.

Period	High		Low
July 1, 2014 through September 30, 2014	$	2.70	$	0.50
April 1, 2014 through June 30, 2014	$	4.00	$	0.60
January 1, 2014 through March 31, 2014	$	4.90	$	3.52
Year Ended December 31, 2013
October 1, 2013 through December 31, 2013	$	5.90	$	3.62
July 1, 2013 through September 30, 2013	$	9.50	$	5.80
April 1, 2013 through June 30, 2013	$	21.50	$	9.00
January 1, 2013 through March 31, 2013	$	21.50	$	13.00
Year Ended December 31, 2012
October 1, 2012 through December 31, 2012	$	20.50	$	12.00
July 1, 2012 through September 30, 2012	$	26.01	$	15.00
April 1, 2012 through June 30, 2012	$	33.00	$	15.00
January 1, 2012 through March 31, 2012	$	33.00	$	10.50

The last reported closing price of our common stock on the OTCQB market on November 20, 2014 was $0.56 per share.

Dividend Policy

We have not declared or paid any cash dividends on our common stock, and we currently intend to retain future earnings, if any, to finance the expansion of our business; we do not expect to pay any cash dividends in the foreseeable future. The decision whether to pay cash dividends on our common stock will be made by our board of directors, in their discretion, and will depend on our financial condition, results of operations, capital requirements and other factors that our board of directors considers significant.

Registration Rights Agreements

On September 23, 2014, we completed the Private Offering. We sold a total of 11,406,932 shares of common stock (of which 11,305,567 shares of our common stock were issued as a result of beneficial ownership limitations), together with warrants for the purchase of 940,189 shares of common stock, at a price of $0.53 per share. In conjunction with the Private Offering, we agreed to register the common stock and the common stock underlying the warrants. We have prepared the registration statement, of which this prospectus is a part, to satisfy this obligation. We are required to keep the registration statement available for sales by the selling stockholders until the selling stockholders have disposed of the shares of common stock we are registering, or sold his or her shares of common stock pursuant to Rule 144, or the shares of common stock we have registered become eligible for resale without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144.

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Future Sales of Securities

There is a limited public market for our common stock and a limited number of shares in the public float. Sales of substantial amounts of our common stock in the public market could adversely affect the market price and our ability to raise capital in the future.

We currently have 17,161,673 shares of common stock issued and outstanding. As of the date of this prospectus, we have 1,693,887 shares of common stock underlying warrants, 2,294,534 shares of common stock underlying options, 839,148 additional shares of common stock reserved for issuance under various employee benefit plans, such as the Viveve Medical, Inc. 2013 Employee Stock Option and Incentive Plan, as amended, and the 2005 PLC Employee Stock Option and Incentive Plan, and an estimated 101,000 shares of common stock that are eligible for sale pursuant to Rule 144, which estimate is based on a list provided to us by our transfer agent.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion should be read in conjunction with the consolidated financial statements and the related notes contained elsewhere in this prospectus. In addition to historical information, the following discussion contains forward looking statements based upon current expectations that are subject to risks and uncertainties. Actual results may differ substantially from those referred to herein due to a number of factors, including, but not limited to, risks described in the section entitled “Risk Factors” and elsewhere in this prospectus.

Overview of Our Business

We design, develop, manufacture and market a medical device for the non-invasive treatment of vaginal introital laxity. Prior to the Merger, we devoted substantially all of our time and effort to developing products, raising capital and recruiting personnel. To date, we have not generated significant revenues and, prior to the Merger, we funded our operations primarily through the sale of our common and preferred stock and borrowings from related parties and financial institutions.

In preparation for the stock exchange pursuant to the Merger, Viveve, Inc. convertible bridge notes in the aggregate amount of $4,875,000 and related accrued interest of approximately $522,000 were extinguished, along with Viveve, Inc. warrant liabilities of approximately $573,000.

Pursuant to the Agreement and Plan of Merger, all shares of capital stock (including common and preferred stock) of Viveve, Inc. were converted into 3,743,282 shares of the Company’s common stock which represented approximately 62% of the issued and outstanding shares of common stock of the Company on a fully diluted basis. In addition, non-accredited investors were entitled to receive approximately $16,500 upon closing. Upon the closing of the Merger, the Company issued an additional 943,596 shares of common stock upon the automatic conversion of a warrant issued in exchange for the cancellation of related party convertible bridge notes in the aggregate amount of $1,750,000 and related accrued interest of approximately $211,000.

The acquisition was accounted for as a reverse merger and recapitalization effected by a share exchange. Viveve, Inc. is considered the acquirer for accounting and financial reporting purposes. The assets and liabilities of the acquired entity have been brought forward at their book value and no goodwill has been recognized.

In connection with the then proposed Merger, on May 9, 2014, we issued to GBS Venture Partners Limited (“GBS”), a convertible debenture holder, a warrant to purchase shares of our common stock equal to approximately 5% of the outstanding shares of common stock on a post-Merger basis in consideration for the cancellation of convertible promissory notes in the aggregate principal amount of $1,750,000 and accrued interest of approximately $211,000 held by GBS. As part of the closing of the Merger, we issued 943,596 shares of common stock to GBS upon the automatic conversion of the warrant.

Concurrent with the consummation of the Merger, we completed the Private Offering pursuant to which sold 11,406,932 shares of common stock (of which 11,305,567 shares of our common stock were issued as a result of beneficial ownership limitations), together with warrants for the purchase of 940,189 shares of common stock, for gross proceeds of approximately $6,000,000, which included the conversion of $1,500,000 of convertible notes. The price per unit was $0.53 per share.

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On September 30, 2014, we entered into a Loan and Security Agreement with Square 1 Bank pursuant to which we received a term loan in the amount of $5 million, which will be funded in 3 tranches. The first tranche of $2.5 million was provided to us on October 1, 2014. The proceeds from the first tranche were used to repay certain indebtedness owed by us, and specifically the indebtedness owed to Oxford Finance LLC which totaled $1,630,925. Before the second and third tranches of the term loan will be funded, we must meet certain enrollment milestones and achieve certain positive results relating to our outside of the U.S. (“OUS”) Clinical Trials, among other things. A description of the loan we received from Square 1 Bank is included in the Current Report on Form 8-K that we filed with the Securities and Exchange Commission on October 3, 2014.

We are subject to risks, expenses and uncertainties frequently encountered by companies in the medical device industry. These risks include, but are not limited to, intense competition, whether we can be successful in obtaining FDA approval for the sale of our product, whether there will be a demand for the Viveve Treatment, given that the cost of the procedure will likely not be reimbursed by the government or private health insurers, the uncertainty of availability of additional financing when and if we need it, and the uncertainty of achieving future profitability. We cannot be certain that in the event we require additional financing, such financing will be available or on terms which are favorable to us. Failure to generate sufficient cash flows from operations, raise additional capital or reduce certain discretionary spending could have a material adverse effect on our ability to achieve our intended business objectives. These factors raise substantial doubt about our ability to continue as a going concern.

Plan of Operation

We intend to increase our sales and exposure both internationally and in the United States market by seeking regulatory approval for the sale and distribution of our product, identifying and training qualified distributors and expanding the scope of physicians who offer the Viveve Treatment to include plastic surgeons, dermatologists, general surgeons, urologists, urogynecologists and primary care physicians. In addition, we intend to use the strategic relationships that we have developed with outside contractors and medical experts to improve the Viveve System by focusing our research and development efforts on various areas including, but not limited to:

● designing new treatment tips optimized for both ease-of-use and to reduce procedure times for patients and physicians;

● increasing security to prevent the re-use of treatment tips, resulting in improved procedure efficacy and reduced safety concerns; and

● developing a new cooling system that integrates a substitute for hydroflurocarbon, to maintain compliance with changes in international environmental regulations.

We are using the net proceeds received from the Private Offering to support commercialization of our product in existing and new markets, for our research and development efforts and for protection of our intellectual property, as well as for working capital and other general corporate purposes. We expect that we will continue to require funds to fully implement our plan of operation. The net proceeds of approximately $4.2 million received from the Private Offering are expected to be sufficient to fund our activities through June 2015. Our operating costs include employee salaries and benefits, compensation paid to consultants, professional fees and expenses, costs associated with our clinical trials, capital costs for research and other equipment, costs associated with research and development activities including travel and administration, legal expenses, sales and marketing costs, general and administrative expenses, and other costs associated with an early stage public company subject to the reporting requirements of the Securities Exchange Act of 1934. We also expect to incur expenses related to obtaining regulatory approvals in the U.S. and internationally as well as legal and related expenses to protect our intellectual property. We expect capital expenditures to be less than $250,000 annually.

We intend to continue to meet our operating cash flow requirements through the sales of our products and by raising additional funds from the sale of equity or debt securities. If we sell our equity securities, or securities convertible into equity, to raise capital, our current stockholders will likely be substantially diluted. We may also consider the sale of certain assets, or entering into a transaction, such as a merger, with a business complimentary to ours, although we do not currently have plans for any such transaction. While we have been successful in raising capital to fund our operations since inception, other than as discussed in this prospectus, we do not have any committed sources of financing and there are no assurances that we will be able to secure additional funding. If we cannot obtain financing, then we may be forced to curtail our operations or consider other strategic alternatives.

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Results of Operations

Nine Month Period Ended September 30, 2014 Compared to the Nine Month Period Ended September 30, 2013

Revenue

	Nine Months Ended September 30,				Change
	2014		2013			$		%
Revenue	$	64,475	$	147,660	$	(83,185	)		(56	%)

We recorded revenue of $64,475 for the nine months ended September 30, 2014 as compared to revenue of $147,660 for the nine months ended September 30, 2013, a decrease of $83,185 or approximately 56%. The decrease in revenue was a result of the limited production of inventory available for sale and reduced sales and marketing efforts in the second half of 2013 and throughout 2014 due to funding constraints.

Research and development expenses

	Nine Months Ended September 30,				Change
	2014		2013			$	%
Research and development	$	940,954	$	628,545	$	312,409		50	%

Research and development expense totaled $940,954 for the nine months ended September 30, 2014, compared to research and development expense of $628,545 for the nine months ended September 30, 2013, an increase of $312,409 or approximately 50%. Spending on research and development primarily increased as we prepared for our OUS Clinical Trial in the third quarter of 2014 and incurred costs associated with the trial’s implementation. The Viveve OUS Clinical Trial is expected to commence in the fourth quarter of 2014 and is designed to evaluate the safety and effectiveness of the Viveve Treatment.

Selling, general and administrative expenses

	Nine Months Ended September 30,				Change
	2014		2013			$	%
Selling, general and administrative	$	3,085,580	$	2,517,791	$	567,789		23	%

Selling, general and administrative expenses totaled $3,085,580 for the nine months ended September 30, 2014, compared to $2,517,791 for the nine months ended September 30, 2013, an increase of $567,789 or approximately 23%. The increase in selling, general and administrative expenses was primarily attributable to additional professional services related expenses associated with the Merger transaction that was completed in September 2014. The increase was partially offset by greater spending in the first quarter of 2013 as we prepared to launch a major funding effort in the second quarter of 2013 that was later scaled back.

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Interest expense

	Nine Months Ended September 30,						Change
	2014			2013				$	%
Interest expense	$	(486,582	)	$	(334,380	)	$	152,202		46	%

During the nine months ended September 30, 2014, we had interest expense of $486,582 as compared to $334,380 for the nine months ended September 30, 2013. The increase of $152,202 or approximately 46% resulted primarily from greater interest expense of $192,135 on our convertible bridge notes due to the issuance of additional convertible notes in the aggregate principal amount of $2,375,000, partially offset by a decrease of $39,933 of fees and interest expense for our note payable due to an agreed upon reduction in restructuring fees in September 2014.

Other income, net

	Nine Months Ended September 30,				Change
	2014		2013			$	%
Other income, net	$	51,312	$	11,230	$	40,082		357	%

Other income, net, for the nine months ended September 30, 2014 and 2013 was $51,312 and $11,230, respectively. The increase of $40,082, or approximately 357%, was attributable to mark-to-market adjustments associated with the change in the fair value for our preferred stock warrants, which were accounted for as liabilities.

Year Ended December 31, 2013 Compared to the Year Ended December 31, 2012

We recorded revenue of $152,270 for the year ended December 31, 2013 as compared to revenue of $249,408 for the year ended December 31, 2012, a decrease of $97,138 or approximately 39%. We slowed our production and marketing efforts during this time period due to our funding constraints which resulted in the decrease in revenue.

Research and development expense totaled $771,695 for the year ended December 31, 2013, compared to research and development expense of $1,396,179 for the year ended December 31, 2012, a decrease of $624,484 or approximately 45%. Spending on research and development expenses was reduced and production and marketing of the product was constrained by a lack of working capital.

Selling, general and administrative expenses totaled $3,129,234 for the year ended December 31, 2013, compared to $3,076,875 for the year ended December 31, 2012, an increase of $52,359 or approximately 2%. The increase in selling, general and administrative expenses related to additional compensation and benefits for the senior management team of approximately $130,000, increased consulting expenses for finance and accounting professionals of $148,500, and severance payments of approximately $271,346 for the former chief executive officer. These increases were partially offset by decreases of approximately $263,560 of settlement payments to a former chief executive officer and $233,743 of professional recruiting fees.

As a result of the decrease in revenue, the increase in selling, general and administrative expenses and the decrease in research and development expense, our loss from operations for the year ended December 31, 2013 was $3,930,988, compared to a loss from operations of $4,341,918 for the year ended December 31, 2012.

During the year ended December 31, 2013, we had interest expense of $447,340 as compared to $743,359 for the year ended December 31, 2012. The decrease of $296,019 or approximately 40% resulted primarily from a decrease of $91,477 of fees and interest expense for debt and a decrease of $422,171 of interest expense related to the convertible preferred stock warrants that were issued in 2012 partially offset by additional interest expense of $217,629 on our convertible bridge notes. Other income, net for the years ended December 31, 2013 and 2012 was $61,541 and $124,731, respectively. The decrease of $63,190, or approximately 51%, was attributable to a decrease of $94,623 for mark to market adjustments associated with the preferred stock warrants, partially offset by a loss of $31,433 on the disposal of property and equipment recorded in 2012.

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We had a net loss of $4,316,779, for the year ended December 31, 2013 as compared to a net loss of $4,960,019 for the year ended December 31, 2012.

Liquidity and Capital Resources

Nine month period ended September 30, 2014

Liquidity is our ability to generate sufficient cash flows from operating activities to meet our obligations and commitments. In addition, liquidity includes the ability to obtain appropriate financing or to raise capital. We have funded our operations since inception through the sale of common and preferred stock and borrowings from related parties and financial institutions. To date, we have not generated sufficient cash flows from operating activities to meet our obligations and commitments, and we anticipate that we will continue to incur losses for the foreseeable future.

We completed our Merger with PLC Systems, Inc. on September 23, 2014. Concurrent with the Merger, we completed the Private Offering, raising total gross proceeds of approximately $6,000,000, which included the conversion of $1,500,000 of convertible notes. The proceeds were partially offset by costs of $295,768 related to the Private Offering.

On September 30, 2014, we entered into a Loan and Security Agreement pursuant to which we received a term loan in the amount of $5 million, which will be funded in 3 tranches. The first tranche of $2.5 million was provided to us on October 1, 2014. The proceeds from the first tranche were used to repay the existing loan with a financial institution which totaled $1,630,925. Before the second tranche of $1.5 million and the third tranche of $1 million of the term loan will be funded, we must meet certain enrollment milestones and achieve certain positive results relating to our OUS Clinical Trials, among other things.

The following table summarizes the primary sources and uses of cash for the periods presented below:

	Nine Months Ended September 30,
	2014			2013
Net cash used in operating activities	$	(4,050,988	)	$	(2,949,832	)
Net cash used in investing activities		(106,359	)		(4,214	)
Net cash provided by financing activities		5,704,220			2,865,186
Net increase (decrease) in cash and cash equivalents	$	1,546,873		$	(88,860	)

Operating Activities

We have incurred, and expect to continue to incur, significant expenses in the areas of research and development, regulatory and other clinical study costs, associated with the Viveve System.

Operating activities used $4,050,988 in the nine months ended September 30, 2014 compared to $2,949,832 used in the nine months ended September 30, 2013. The primary use of our cash was to fund selling, general and administrative expenses and research and development expenses associated with the Viveve System. Net cash used in 2014 consisted of a net loss of $4,437,399 adjusted for non-cash expenses including depreciation and amortization of $42,220, stock-based compensation of $143,643, and non-cash interest expense of $369,677, partially offset by revaluation of warrant liabilities of $50,762. Net cash used in 2013 consisted of a net loss of $3,432,349 adjusted for non-cash expenses including depreciation and amortization of $35,871, stock-based compensation of $66,001, and non-cash interest expense of $227,911, partially offset by revaluation of warrant liabilities of $11,230.

Investing Activities

Net cash used in investing activities during the nine months ended September 30, 2014 was $106,359, which was used to purchase property and equipment. Net cash used in investing activities during the nine months ended September 30, 2013 was $4,214, which was used for the purchase of property and equipment. We expect to continue to purchase property and equipment in the normal course of our business. The amount and timing of these purchases and the related cash outflows in future periods is difficult to predict and is dependent on a number of factors including, but not limited to, any increase in the number of our employees and changes related to our development programs.

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Financing Activities

Net cash provided by financing activities during the nine months ended September 30, 2014 was $5,704,220, which was the result of proceeds of $1,500,000 from the issuance of related party convertible bridge notes and the cash proceeds of $4,499,988 from the Private Offering, partially offset by stock issuance costs of $295,768. Cash provided by financing activities during the nine months ended September 30, 2013 was $2,865,186, which was the result of proceeds of $3,000,000 from the issuance of related party convertible bridge notes, partially offset by principal repayments to a financial institution of $134,814.

Year ended December 31, 2013

Operating Activities

Net cash used in operating activities for the year ended December 31, 2013 decreased to $3,754,620, or 31%, as compared to $5,443,754 used during the year ended December 31, 2012. This consisted primarily of a net loss of approximately $4,316,779. Net loss was adjusted for non-cash items such as depreciation and amortization of $66,120, non-cash stock-based compensation of $87,428 and non-cash interest expense of $305,917, partially offset by a reduction of the fair value of warrant liability of $61,541. We also had a decrease in inventory of $71,247, an increase of prepaid expenses and other current assets of $243,661, an increase in accounts payable of $481,738 and a decrease in accrued liabilities of $159,868. The increase in prepaid expenses related to additional professional and consulting fees related to an anticipated financing. The decrease in accrued liabilities related primarily to additional disbursements including payroll taxes paid in 2013 in connection with a settlement reached under arbitration, in a former employee dispute.

Our working capital deficit was $6,855,258 as of December 31, 2013, as compared to a working capital deficit of $2,538,272 as of December 31, 2012. The change in working capital of $4,316,986 from December 31, 2012 to December 31, 2013 was primarily attributable to an increase of $3,875,000 in related party convertible bridge notes.

Investing Activities

Net cash used in investing activities during the year ended December 31, 2013 was $4,213, which was primarily used for property and equipment purchases. Net cash used in investing activities during the year ended December 31, 2012 was $23,281, which was used for the purchase of property and equipment. We expect to continue to purchase property and equipment in the normal course of our business. The amount and timing of these purchases and the related cash outflows in future periods is difficult to predict and is dependent on a number of factors, including but not limited to any increase in the number of our employees and changes related to our business development programs.

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Financing Activities

Cash provided by financing activities during the year ended December 31, 2013 was $3,740,186, which was the result of proceeds of $3,875,000 from the issuance of related party convertible bridge notes, partially offset by the principal repayments of $134,814 of notes payable to a financial institution. Cash provided by financing activities during the year ended December 31, 2012 was $5,743,210, which was the result of the net proceeds of $3,764,191 from the sale of Series B Preferred Stock, proceeds of $2,000,000 from the issuance of related party convertible bridge notes, proceeds of $2,135,159 from a loan and security agreement with a financial institution and proceeds of $9,335 from the exercise stock options. The receipt of these proceeds was partially offset by principal repayments to a financial institution of $2,165,475.

Recent Accounting Pronouncements

In May 2014, as part of its ongoing efforts to assist in the convergence of US GAAP and International Financial Reporting Standards (“IFRS”), the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The ASU provides alternative methods of initial adoption and is effective for annual and interim periods beginning after December 15, 2016. We are currently evaluating the impact that this standard will have on our condensed consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12, “Compensation — Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved After a Requisite Service Period” (“ASU 2014-12”). Companies commonly issue share-based payment awards that require a specific performance target to be achieved in order for employees to become eligible to vest in the awards. ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period should be treated as a performance condition. The performance target should not be reflected in estimating the grant date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved. ASU 2014-12 will be effective for the Company’s fiscal years beginning fiscal 2016 and interim reporting periods within that year, using either the retrospective or prospective transition method. Early adoption is permitted. We are currently evaluating the effect of the adoption of this guidance on our condensed consolidated financial statements.

In June 2014, the FASB issued ASU 2014-10,  “Development Stage Entities (Topic 915):  Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in topic 810, Consolidation” (“ASU 2014-10”). ASU 2014-10 removes the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. ASU 2014-10 also eliminates the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. The amendments in ASU 2014-10 will be effective retrospectively except for the clarification to Topic 275, which shall be applied prospectively for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued. The Company elected to early adopt the provisions of ASU 2014-10 in the second quarter of 2014.

In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements - Going Concern (subtopic 310-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”), to provide guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Since ASU 2014-15 only impacts financial statement disclosure requirements regarding whether there is  substantial doubt about an entity’s ability to continue as a going concern, we do not expect its adoption to have an impact on our condensed consolidated financial statements. 

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Critical Accounting Policies

The discussion and analysis of financial condition and results of operations is based upon our financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America. Certain accounting policies and estimates are particularly important to the understanding of our financial position and results of operations and require the application of significant judgment by our management or can be materially affected by changes from period to period in economic factors or conditions that are outside of our control. As a result, they are subject to an inherent degree of uncertainty. In applying these policies, management uses their judgment to determine the appropriate assumptions to be used in the determination of certain estimates. Those estimates are based on our historical operations, our future business plans and projected financial results, the terms of existing contracts, observance of trends in the industry, information provided by our customers and information available from other outside sources, as appropriate. Please see Note 2 to our financial statements for a more complete description of our significant accounting policies.

Off-Balance Sheet Transactions

We do not have any off-balance sheet transactions.

Trends, Events and Uncertainties

Research and development of new technologies is, by its nature, unpredictable. Although we will undertake development efforts with commercially reasonable diligence, there can be no assurance that we will have adequate capital to develop our technology to the extent needed to create future sales to sustain our operations.

We cannot assure you that our technology will be adopted, that we will ever earn revenues sufficient to support our operations, or that we will ever be profitable. Furthermore, since we have no committed source of financing, we cannot assure you that we will be able to raise money as and when we need it to continue our operations. If we cannot raise funds as and when we need them, we may be required to severely curtail, or even to cease, our operations.

Other than as discussed above and elsewhere in this prospectus, we are not aware of any trends, events or uncertainties that are likely to have a material effect on our financial condition.

OUR BUSINESS

Viveve, Inc., our wholly-owned subsidiary, was incorporated in 2005. In conjunction with the formation of the Company, we licensed patent rights from Edward Knowlton, a holder of patents covering the use of, monopolar, radiofrequency energy to tighten tissue. On February 10, 2006, Mr. Knowlton granted to Viveve, Inc. a perpetual, fully paid, royalty free sublicense to use, for the purpose of transmucosal rejuvenation of vaginal tissue, specific patents licensed by Mr. Knowlton from Thermage, Inc.

On September 23, 2014, PLC Systems Inc. completed the Merger of PLC Systems Acquisition Corp., a Delaware corporation and wholly-owned subsidiary PLC Systems, Inc., with and into Viveve, Inc. In connection with the Merger, we changed our name from PLC Systems Inc. to Viveve Medical, Inc. to better reflect our new business.

We design, develop, manufacture and market medical devices for the non-invasive treatment of vaginal introital laxity. Vaginal laxity occurs in many women as a result of natural childbirth, during which the vaginal opening, or introitus, is over-stretched and fails to return to its pre-childbirth state. Vaginal laxity can often cause decreased sexual function and satisfaction in women. The Viveve Treatment is a non-invasive solution for vaginal laxity that is performed in less than 30 minutes, in a physician’s office, and does not require the use of anesthesia. The Viveve System uses patented monopolar radiofrequency, or RF, energy to generate low temperature heat. The vaginal mucosa is simultaneously cooled while this non-ablative heat is delivered into the submucosal layer. The RF energy stimulates the formation of collagen and causes the collagen fibers to remodel thereby tightening the submucosal tissue of the vaginal introitus. The RF stimulation causes subtle alterations in the collagen that can renew the tissue and further tighten the vaginal introitus over the next one to three months and lead to increased sexual function. The Viveve Treatment provides patients suffering from vaginal laxity and decreased sexual function a non-invasive alternative to surgical procedures, which in contrast, can cost up to tens of thousands of dollars and involve weeks of recovery.

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We received regulatory approval to market the Viveve System in Europe through a CE Mark issued on December 7, 2010. An amendment to the CE Mark was approved in 2011 and will remain active through September 2, 2015, at which time we anticipate that it will be renewed. On April 26, 2012, we received Canada Health Medical Device License approval from the Canadian Medical Devices Bureau, subject to annual renewal. In Hong Kong, a Certification of Type Acceptance was issued on June 28, 2012. We currently market the Viveve System, including the single-use treatment tips, through sales consultants and distributors in Canada and Hong Kong, respectively, and in Japan through a sales consultant via Japan’s physician import license pathway. We are currently seeking distribution partners in several European countries. Experienced OBGYN physicians who currently use the Viveve System provide initial training for new physicians on its proper use, and our sales consultants and distributors maintain frequent interactions with customers to promote repeat sales of our single-use treatment tips. As of September 30, 2014, we have sold one Viveve System in Canada and placed three systems under a beta site program that may convert to sales in 2015. As of September 30, 2014, we have also sold two Viveve Systems in Hong Kong, five Viveve Systems in Japan, and 425 single-use treatment tips.

Market Overview

Overview of Vaginal Laxity

All women who have given birth vaginally undergo stretching of the tissues of the vaginal opening to accommodate the fetal head. Often the effects are permanent and many women have long-term physical and psychological consequences including sexual dissatisfaction. One significant issue is the loosening of the introitus ─ the vaginal opening. This happens with the first vaginal delivery and usually is made worse with subsequent vaginal deliveries. Vaginal laxity can result in decreased sexual pleasure for both women and their partners during intercourse. This condition is not frequently discussed because women are embarrassed, fear that their concerns will be dismissed or their physician will not understand. Physicians hesitate to discuss the situation with their patients because historically there has been no safe and effective treatment. Physicians frequently recommend Kegel exercises. However, these exercises only strengthen the pelvic floor muscles and do not address the underlying cause of vaginal laxity – loss of tissue elasticity. While surgery can be performed to tighten the vaginal canal, the formation of scar tissue from the surgery may lead to painful intercourse and permanent side effects.

As a consequence of the physical tissue damage that can result from childbirth, a significant decrease in sexual satisfaction has been reported in women who underwent vaginal delivery, when assessed two years after delivery, in comparison with those who underwent elective caesarian section. In the past several years there has been a marked increase in the number of women requesting delivery by caesarian section with the intention of preventing damage to the pelvic floor and introitus. Caesarian sections are not without risk to both the baby and mother. Whether or not to agree to a woman’s request for an elective caesarian section has generated considerable controversy among obstetricians. If a procedure were available to address the concerns of women about vaginal laxity, we believe the perceived need to have a caesarian section to prevent introital damage may decrease significantly.

Market for a Proven Solution to Vaginal Laxity

In 2009, we sponsored several on-line marketing surveys in the U.S. with both OBGYNs and women, ages 25-55, to assess attitudes of physicians and women about vaginal laxity and towards a safe, non-invasive solution to treat this condition.

● Physician Survey: An OBGYN marketing survey was conducted by OBGYN Alliance with nearly 525 practicing OBGYNs from across the U.S. The objectives of the study were to: obtain insights from physicians on physical changes resulting from childbirth and the corresponding sexual health implications for patients; understand the perceptions and opinions of OBGYN physicians on a procedure that could be offered to address vaginal laxity following childbirth; and gain an understanding of whom the early adopters may be of the Viveve Treatment.

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● Consumer Survey: In a consumer marketing survey conducted by Q&A Research, 421 women were screened for vaginal delivery, age (25-55), Herfindahl-Hirschman Index (HHI) ($50K+) and education. The objectives of the survey were to: assess the need for the Viveve Treatment; and better understand the complexity of emotions and psychological profile of women who experience but do not discuss vaginal changes post childbirth.

Results from these surveys suggested that vaginal laxity is a significant unmet medical need, and that patients and physicians would benefit significantly from a safe and effective non-invasive treatment that would also increase physical sensation and sexual satisfaction following vaginal childbirth. Of the 421 patient respondents, up to 48% felt that vaginal laxity was a concern post-childbirth. Furthermore, it is evident that patients and their OBGYNs are not discussing vaginal laxity on a regular basis; in fact, we believe such conversations occur quite infrequently due to many factors, including, patient embarrassment and fear of being ridiculed, lack of time and lack of solutions for physicians. Of the 525 OBGYNs surveyed 84% indicated that vaginal laxity is the number one post-delivery physical change for women, being more prevalent than weight gain, urinary incontinence and stretch marks, and believe that it is under-reported by their patients. Additionally, in a separate international survey of urogynecologists, 83% of the 563 respondents described vaginal laxity as underreported by their patients and the majority considered it a bothersome condition that impacts sexual function and relationships. Despite the lack of communication regarding this issue, we believe there is a strong interest among patients and doctors for a treatment that is clinically proven and safe.

Applying U.S. Census data, CDC Vital Statistics data and our projections as a result of these studies, we estimate there are approximately 6-8 million post-partum women that are potential candidates for this procedure in the U.S. alone, 3-4 million of whom could be early adopters for the Viveve Treatment.

In 2012, we conducted a similar consumer study in Japan and Canada in order to understand cultural differences that may exist towards vaginal laxity and the Viveve Treatment. The results corroborated our U.S. survey conclusions. Applying World Health Organization census data as well as data from individual countries, we estimate there are 15-20 million women outside the U.S. that could be early adopters of the Viveve Treatment.

Current Treatments and Their Limitations

Currently, few medical treatments are available to effectively treat vaginal laxity. The most widely prescribed treatments include Kegel exercises and invasive surgical procedures, known as laser vaginal rejuvenation (“LVR”) or vaginoplasty.

● Kegel Exercises: Kegels are an exercise that was developed by Dr. Arnold Kegel designed to strengthen the muscles of the pelvic floor - the pubococcygeal (PC) muscles - to increase vaginal muscle tone, improve sexual response, and limit involuntary urine release due to stress urinary incontinence. These exercises are often prescribed following childbirth or during and after menopause. However, we are not aware of any validated evidence indicating that Kegels improve vaginal laxity or sexual function due to laxity.

● Surgical Procedures: Of the various alternatives for treating vaginal laxity, invasive surgical procedures, such as LVR, are the only modalities with any proven efficacy outcomes. Typically, they are performed by plastic surgeons with patients under general anesthesia. According to The International Society of Aesthetic Plastic Surgeons (ISAPS), approximately 114,135 LVR surgeries were performed world-wide in 2013. However, these invasive surgical procedures are expensive, costing thousands of dollars, and can involve weeks of post-surgical recovery time for the patient. They also carry the risk of scarring, which can lead to uncomfortable or painful intercourse, long-term or permanent loss of sensation, serious infection, tissue necrosis, hematomas (fluid collection under the tissue that may require removal), and adverse reactions to anesthesia.

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The Viveve Solution

We believe that the Viveve System provides a compelling, safe, non-invasive treatment for vaginal laxity and improvement of sexual function. The Viveve System consists of an RF generator with cooling capability that protects the mucosa from over-heating and a handpiece that, in conjunction with a single-use treatment tip, regulates the application of RF energy and monitors treatment data. The Viveve Treatment is typically performed in a medical office setting by, or under the supervision of, trained and qualified physicians, that may include obstetricians and gynecologists, plastic surgeons, dermatologists, general surgeons, urologists, urogynecologists or family practitioners.

Benefits of the Viveve Solution

Our solution provides a number of benefits for physicians and patients:

● Non-Invasive, Non-Ablative Alternative to Surgery with No Identified Safety Issues. The Viveve Treatment has been used to treat over 55 clinical patients and physician users have reported use of the Viveve Treatment on approximately 350 additional patients as of September 30, 2014. The procedure is non-invasive and offers an alternative to surgery at a much lower price with little or no downtime from the patient’s normal routine. It is also a non-ablative procedure that does not damage either the mucosal or sub-mucosal tissue or require any form of anesthesia.

● Single Treatment. The Viveve Treatment is normally performed in a medical office setting as a single treatment that takes less than 30 minutes to complete. Our studies have shown that the clinical effect from our procedure occurs within one to three months and patients continue to report improvements over a period of six months following treatment. In addition, our studies have shown that the Viveve Treatment maintains its effect for at least 12 months, based upon currently available data from our clinical studies.

● Compelling Physician Economics. We believe that in an era of declining government and insurance reimbursement, many physicians are seeking to add effective and safe, self-pay procedures to their practices. The Viveve System can be easily adapted into many physician practices and offers compelling per-procedure economics for the physician, despite requiring a small capital equipment purchase.

● Ease of Use. The Viveve System offers an easy-to-use, straightforward user interface that allows a trained physician to perform the treatment in less than 30 minutes. The Viveve System provides real-time feedback and can be monitored during the treatment. The handpiece and single-use treatment tip are designed with a small profile for accurate placement during treatment, comfort and ease of use.

Our Technology

The Viveve System uses a patented method of delivering monopolar RF energy for heating collagen, which we license from Edward Knowlton.

● Monopolar Radiofrequency Energy. Monopolar RF delivery uses two electrodes, with one active electrode being held in the device handpiece by the physician and the second, a passive return electrode, typically attached to the patient’s upper leg. Monopolar delivery allows for precise administration of energy because the electrical current is concentrated where the active electrode touches the body and disperses quickly as it travels towards the return electrode. The monopolar RF process is distinct from bipolar RF-based technology, which is superficial, relying on current passing through tissue located between two probes placed close together on the surface of the skin. We believe that our monopolar technology delivers energy more effectively and to a greater tissue depth than bipolar technology.

● The Capacitive Coupling Mechanism of Action for Collagen Heating. Our single-use Viveve treatment tip contains patented technology that uses monopolar RF energy as a controlled tissue heating source through the use of a non-conducting material, known as a dielectric. Capacitive coupling is the use of the dielectric to create an electric field in the area where the treatment tip touches the body. The electric field induces a current within the surrounding tissue, resulting in volumetric heating of the tissue due to the tissue’s natural resistance to electrical current flow. Collagen is an efficient conductor of electricity and therefore acts as a pathway for the electric current. This process results in heating of the fibrous septae, the strands of collagen fibers that permeate tissues and connect the outer mucosal layer to the underlying muscle. Delivery of heat to the fibrous septae located in deeper layers of the tissue shrinks and shortens them, resulting in tightening of the mucosal tissue. Over time, new collagen strands may grow as part of the body’s natural response to the activation of fibroblasts that results from the application of low-energy hyperthermic RF energy. These new strands may add strength and produce additional tissue tightening over the next one to three months. This tightening of the tissue has the potential to reduce vaginal laxity and increase sexual function.

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The Viveve System

The Viveve System includes three major components: an RF generator housed in a table-top console, a reusable handpiece and a single-use treatment tip, as well as several other consumable accessories. Physicians attach the single-use treatment tip to the handpiece, which is connected to the console. The generator authenticates the treatment tip and programs the system for the desired treatment without further physician intervention.

● Radiofrequency Generator. The generator produces a six-megahertz signal and is simple and efficient to operate. Controls are within easy reach, and important user information is clearly displayed on the console’s built-in display, including energy delivered, tissue impedance, duration and feedback on procedure technique. Cooling is achieved, in conjunction with the generator, though the delivery of a coolant that helps to cool and protect the mucosa during a procedure.

● Handpiece. The reusable handpiece holds the treatment tip in place and processes information about temperature, contact, cooling system function and other important data. A precision control valve within the handpiece meters the delivery of coolant, which protects the mucosal surface.

● Treatment Tip. The single-use treatment tip is available in one size and comes pre-sterilized. Each treatment tip contains a proprietary internal EPROM, or programmable memory chip, which stores treatment parameters and safety limits in order to optimize performance and safety. To enhance procedural safety, we have programmed the EPROM for single-use treatments. Using the same treatment tip to perform multiple procedures could result in injury, therefore, the EPROM disables the treatment tip after a pre-programmed number of pulses to ensure that the treatment tip is not reused.

The Viveve System also includes other consumable components. The console houses a canister of coolant that can be used for approximately five to six procedures. Each procedure requires a new return pad, which is typically adhered to the patient’s upper leg to allow a path of travel for the RF current through the body and back to the generator. We also sell proprietary single-use bottles of coupling fluid, a viscous liquid that helps ensure electrical and thermal contact with the treatment tip.

The Viveve Treatment

The Viveve Treatment is conducted on an outpatient basis in a physician’s office. The procedure typically takes less than 30 minutes and does not require any form of anesthesia. To perform the procedure, a physician attaches the single-use treatment tip to the handpiece. The return pad is then adhered to the patient’s upper leg to allow a path of travel for the RF current back to the generator. Prior to treatment, the treatment area is bathed in coupling fluid, which is used for conduction and lubrication. The area from the 1:00 o’clock position to the 11:00 o’clock position just inside the hymenal ring is treated using the Viveve Treatment Tip by delivering a three-phased pulse: Phase 1 – cooling, Phase 2 – 90 Joules/cm2 of RF energy, and Phase 3 – cooling. Each pulse lasts approximately eight seconds. The Viveve treatment tip is then repositioned in an overlapping fashion clockwise and the three-phased treatment pulse is repeated. The entire circumferential treatment area from the 1:00 o’clock position to the 11:00 o’clock position is treated five times with overlapping pulses. Treatment of the urethral area is avoided. During the treatment procedure patients are expected to feel a sensation of warmth when the RF phase is delivered and a cooling sensation when the cooling phases are delivered. Based on our current clinical results, the Viveve Treatment is only required once, with efficacy lasting for at least 12 months.

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Our Customers

To date, we have focused our initial commercial efforts in markets where we have received regulatory clearances for the Viveve System, or in the case of Japan, where we use a physician import license pathway to sell our product. Within each market, we target thought leaders in the OBGYN specialty in order to increase awareness of vaginal laxity and accelerate patient acceptance of the Viveve Treatment. As our markets mature, we intend to target a broader number of physician specialties, including plastic surgeons, dermatologists, general surgeons, urologists, urogynecologists and family practitioners.

Through our sales consultants and distributors, we currently target physicians who have a demonstrated commitment to building a high-volume, non-invasive, treatment business within their practice. If distribution of our product expands globally, we intend to utilize sales consultants and distribution partners in all countries except the U.S. where we intend to hire a direct sales force. To date, we are heavily reliant on our relationships with our sales consultants and distribution partners for the sales of our product in Canada, Hong Kong and Japan.

Donna Bella International, Ltd.

We are a party to a Supply and Purchase Agreement, dated June 26, 2012 (the “Donna Bella Purchase Agreement”) pursuant to which we granted to Donna Bella International, Limited, a Hong Kong corporation (“Donna Bella”), the exclusive rights to purchase our product in Hong Kong for use in Donna Bella’s Hong Kong facilities, which currently consist of medical spas. In accordance with the terms of the Donna Bella Purchase Agreement, the Viveve System is administered and used solely by medical doctors who are qualified to practice medicine in Hong Kong and China, and who have received training from a qualified medical doctor provided by us. Provided that the Donna Bella Purchase Agreement has not otherwise been terminated, Donna Bella also has exclusive rights to purchase all new versions of the Viveve System, including its components and supplies in Hong Kong. If Donna Bella is successful in assisting us in obtaining approval from the China Food and Drug Administration, Donna Bella will also gain exclusive rights to purchase our product in China.

Okamura Associates

We are party to a Consulting Agreement, dated November 15, 2009, pursuant to which Okamura Associates agreed to (i) provide an assessment of the market of our product in Japan, including introductions to opinion leaders and prospective business partners, and (ii) establish a distribution channel “appropriate to the available regulatory pathway.” The term of the agreement continues until the earlier of the final completion of the foregoing services or termination pursuant to the terms provided therein.

Overall, we encourage our sales consultants and distributors to work closely with our physician users to accelerate growth in their practices, which, in turn, generates more treatment tip sales for us. We believe that over time, a broader group of physicians will seek to adopt the Viveve Treatment within their practices and that our target physician base may expand to include not only OBGYNs but plastic surgeons, dermatologists, general surgeons, urologists, urogynecologists and general practitioners. While we are only in the initial phase of commercialization in Canada, Hong Kong and Japan, we have sold our product to seven early adopting physicians.

Business Strategy

Our goal is to become the leading provider of non-invasive solutions to treat vaginal laxity by:

● Increasing the Installed Base of Viveve Systems. In our existing markets, we plan to expand the number of Viveve Systems from our initial base of early adopters by leveraging our current and future clinical study results and through innovative marketing programs directed at both physicians and patients. As a condition that has historically had no viable, non-invasive solutions, we intend to focus much of our marketing effort on physician and patient education. Further, we intend to expand the number of regulatory approvals both internationally and in the U.S., to further increase the areas in which we can market the Viveve System.

● Driving Increased Treatment Tip Usage. Unlike the capital equipment model of other businesses, we maintain an active, continuous relationship with our physician customer base because of the single-use, disposable nature of the treatment tips. We work collaboratively with our physician customer base to increase treatment tip usage by enhancing customer awareness and facilitating the marketing efforts of our physician customers to their patients. We believe that our customers’ interests are closely aligned with our interests, and we plan to monitor the market to foster continued procedure growth for our customers and treatment tip sales for us. We intend to launch innovative marketing programs with physician customers to develop a profitable Viveve Treatment practice.

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● Broadening Our Physician Customer Base. While our initial focus is on marketing our procedure to the OBGYN specialty, we intend to selectively expand our sales efforts into other physician specialties, such as plastic surgery, dermatology and general surgery and family practice. Additionally, we intend to pursue sales from physician-directed medi-spas with track records of safe and successful aesthetic treatments.

● Developing New Treatment Tips and System Enhancements. We intend to continue to expand our line of treatment tips to allow for even shorter procedure times to benefit both physicians and patients. We also plan to pursue potential system modifications and next generation enhancements that will further increase the ease-of-use of the Viveve System.

● Investing in Intellectual Property and Patent Protection. We will continue to invest in expanding our intellectual property portfolio, and we intend to file for additional patents to strengthen our intellectual property rights. Areas in which we may pursue additional patent protection include, but are not limited to, redesign of certain system components, disposable components and software algorithms. We believe that our intellectual property rights protect our position as the exclusive provider of a vaginal laxity treatment using monopolar RF technology in the U.S. and in many other countries. (See the discussion under the heading “Patents and Proprietary Technology”.)

Sales and Marketing

International

We currently market and sell the Viveve System, including the single-use treatment tips, in three countries outside the U.S. - Canada, Hong Kong and Japan - through trained sales consultants and distributors. We are currently seeking distribution partners in several European countries. As of September 30, 2014, we had one sales consultant (Canada) and a distribution partner in Japan.

Through our consultative sales process, we form strong relationships with our customers through frequent interactions. Beyond performing initial system installation and on-site training, which can occur within two weeks of a physician’s purchase decision, our sales consultants provide ongoing consultation to physicians on how to integrate the Viveve System into their practices and market procedures to their patients.

We also provide comprehensive training and education to each physician upon delivery of the Viveve System. We require this initial training to assist physicians in safely and effectively performing the Viveve Treatment.

Our strategy to grow sales internationally is to:

● increase penetration of the Viveve System by targeting physicians and clinics that perform in-office procedures and by implementing direct-to-consumer marketing programs to increase patient use;

● expand into attractive new international markets by gaining regulatory approval, and identifying and training qualified distributors; and

● expand the scope of physicians who offer the Viveve Treatment in addition to OBGYNs, including plastic surgeons, dermatologists, general surgeons, urologists, urogynecologists and primary care physicians.

Further, we intend to actively engage in promotional opportunities through participation in industry tradeshows, clinical workshops and company-sponsored conferences with expert panelists, as well as through trade journals, brochures and our website. We intend to actively seek opportunities to obtain positive media exposure, and plan to engage in direct-to-consumer marketing, including extensive use of social media.

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United States

We intend to seek regulatory clearance or approval from the U.S. Food and Drug Administration, or FDA to allow us to begin to market the Viveve System to physicians and patients in the U.S. To date, we do not have FDA clearance or approval and, as a result, we have not generated any sales in the U.S. In June 2012, we submitted a pre-investigational device exemption, or IDE application and requested an in-person meeting with the FDA to solicit feedback in advance of filing an IDE to conduct a clinical study of the Viveve System to support regulatory submission. In August 2012, we met with the FDA and received feedback on our pre-clinical data, historical clinical data, and a clinical protocol for a prospective randomized controlled trial. We plan to re-submit our IDE application in 2015. We believe this will enable us to begin our U.S. clinical study, if approval is received.

Clinical Research

We have conducted several preclinical studies, as well as two human clinical studies. We believes these studies have shown that the Viveve System has a very strong safety profile and is highly effective in the treatment of vaginal laxity and improvement of sexual function.

Preclinical Studies

In 2010, in collaboration with West Virginia University, we conducted an animal study in sheep to assess the safety, and further understand the mechanism of action of, the Viveve Treatment. The vaginal introitus of five parous sheep were treated once with the Viveve System using a variety of energy levels (75−90 Joules/cm2). Each sheep then underwent serial vaginal biopsies immediately after treatment, at approximately one week, and at one, three and six months (4-5 samples per occurrence). Control biopsies were also obtained from three untreated parous sheep. We examined the vaginal mucosa and underlying connective tissue for thermal changes and subsequent tissue responses over a six month period through light microscopic examination of haematoxylin and eosin (H&E) stained slides that were reviewed by blinded pathologists.

The results of the study indicated that the optimal level of RF energy delivered was 90 J/cm2 and the biopsies supported the hypothesis that the mechanism of action of our technology involves connective tissue remodeling with fibroblast activation and new collagen production. The post-treatment absence of ulcerations, regional necrosis or diffuse fibrosis, throughout the six month follow-up period, also underscores the strong safety profile of the Viveve Treatment.

As part of our clinical research, we have studied and continue to study, with our partners, the interaction of RF energy and tissue to further understand the mechanism of action. We have used transmission electron microscopy on ovine biopsied tissue samples to corroborate that our product induces subtle collagen modification and the deposition of new collagen that leads to tissue tightening and restoration of tissue elasticity. We have developed histology techniques to investigate the depth of heat in tissue, fibroblast activation and collagen deposition that we believe is responsible for long-term improvement and tightening of tissue. We have also created three-dimensional computer models to study tissue heating with our product. Determining the effectiveness of this type of treatment is inherently a subjective evaluation. When performing our clinical research and studies, we attempt to utilize the most compelling measures we can in order to provide convincing evidence of efficacy.

Clinical Studies

To date, we have conducted two human clinical studies using the Viveve System, one in the U.S. and one in Japan. Both studies were designed to assess the safety and efficacy of the Viveve System for the treatment of vaginal introital laxity and improvement of sexual function. In each study, the Viveve System restored vaginal tightness to pre-childbirth level and improved sexual function.

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United States

We conducted our first human study of the Viveve System beginning in November 2008. The study was an open-label study conducted in 24 female subjects, ages 25-44 years old, each of whom had experienced at least one full-term vaginal delivery. The study was designed to assess the safety and efficacy of the procedure at three RF dosing levels. Each woman was treated once with the Viveve System, with no anesthesia – three patients received 60 joules/cm2, three patients received 75 joules/cm2, and 18 patients received 90 joules/cm2. Patient outcomes were measured at baseline, one month, three months, six months, and 12 months using several validated patient-reported outcome measures, including a Company-designed vaginal laxity/tightness questionnaire, modified Female Sexual Function Index (mFSFI), Female Sexual Distress Scale-Revised (FSDS-R) and the Global Response Assessment.

At the time of enrollment of the study, all 24 female subjects perceived significantly increased vaginal laxity and about half of the subjects indicated decreased levels of sexual satisfaction when compared to their pre-childbirth state. By month one, 100% of the women in the study reported a statistically significant (p<0.0001) improvement in vaginal tightness to pre-childbirth levels. This level of efficacy continued to the 12 month follow-up period. At each follow-up time-point, there was a statistically significant (p<0.0001) improvement in both vaginal laxity and sexual function scores.

The Viveve System also demonstrated a strong safety profile throughout the study. The treatment was well tolerated and there were no procedure-related adverse events or serious adverse events through the 12 month follow-up period.

Japan

Our second human clinical study of the Viveve System began in March 2010. This study was an open-label study conducted in 30 female subjects, ages 21-55 years old, each of whom had experienced at least one full-term vaginal delivery. The study was designed to assess the safety and efficacy of the procedure. Each woman was treated once with the Viveve System, with no anesthesia, using 90 joules/cm2 of RF energy as the therapeutic dose.

Like the U.S. study, patient outcomes were measured at baseline, one month, three months, six months, and 12 months using several validated patient-reported outcome measures, including a Company-designed vaginal laxity/tightness questionnaire, modified Female Sexual Function Index (mFSFI), Female Sexual Distress Scale-Revised (FSDS-R) and the Global Response Assessment.

Within one month after the Viveve Treatment, patients reported a statistically significant improvement in vaginal laxity scores, sexual function and sexual satisfaction scores to pre-childbirth levels. These results continued throughout the 12 month follow-up period. Additionally, patients reported a statistically significant (p<0.0001) decrease at one month, and thereafter, in their personal distress scores from sexual activity.

Similar to the U.S. study, the Viveve Treatment continued to demonstrate a strong safety profile. The treatment was well tolerated and there were no procedure-related adverse events or serious adverse events through the 12 month follow-up period.

We believe that the consistency of results, in both safety and efficacy, across these clinical study populations, is indicative of the cross-culture similarities in this medical condition and the positive impact that an effective treatment can have on the sexual health of women after vaginal childbirth. Notwithstanding the safety of the Viveve Treatment, patients may experience undesirable side-effects such as temporary swelling or reddening of the treated tissue.

Research and Development

We intend to focus, with Stellartech Research Corporation, our current manufacturing and development services provider, and our other consultants, on various research and development efforts for the Viveve System, including but not limited to:

● implementing a cost improvement program to further increase gross margins and gross profit opportunity;

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● developing a new cooling system to maintain compliance with potential changes in environmental regulations;

● designing new treatment tips to further optimize ease-of-use and reduce procedure times for patients and physicians; and

● increasing security to prevent the re-use of treatment tips to further ensure procedure safety.

We have formed strategic relationships with outside contractors for assistance on annualized projects, and we work closely with experts in the medical community to supplement our research and development resources. Research and development expenses for 2013 and 2012 were $771,695 and $1,396,179, respectively. In the future, we expect to pursue further research and development initiatives to improve and extend our technological capabilities and to foster an environment of innovation and quality.

Manufacturing

Our manufacturing strategy involves the combined utilization of internal manufacturing resources and expertise, as well as approved suppliers and contract manufacturers. Our internal manufacturing activities include the testing and packaging of Viveve treatment tips and handpieces, as well as the final integration, system testing and packaging of the Viveve System. We outsource the manufacture of components, subassemblies and certain finished products that are produced to our specifications and shipped to our Sunnyvale facility for final assembly or inspection, testing and certification. Our finished products are stored at and distributed from our Sunnyvale facility. Quality control, risk management, efficiency and the ability to respond quickly to changing requirements are the primary goals of our manufacturing operations.

We have arrangements with our suppliers that allow us to adjust the delivery quantities of components, subassemblies and finished products, as well as delivery schedules, to match our changing requirements. The forecasts we use are based on historical trends, current utilization patterns and sales forecasts of future demand. Lead times for components, subassemblies and finished products may vary significantly depending on the size of the order, specific supplier requirements and current market demand for the components and subassemblies. Most of our suppliers have no contractual obligations to supply us with, and we are not contractually obligated to purchase from them, the components used in our devices.

We obtain programmable memory chips for our treatment tips and the coolant valve for the handpiece from single suppliers, for which we attempt to mitigate risks through inventory management and utilization of 12- to 18-month purchase orders, and sterilization services from a single vendor, for which we attempt to mitigate risks by using two sterilization chambers at each of two locations. Other products and components come from single suppliers, but alternate suppliers have been qualified or, we believe, can be readily identified and qualified. In addition, the availability of cryogen for our cooling module, which we can source from multiple suppliers, may fluctuate due to changes in the global supply of this material. To date, we have not experienced material delays in obtaining any of our components, subassemblies or finished products, nor has the ready supply of finished products to our customers been adversely affected.

We are required to manufacture our product in compliance with the FDA’s QSR. The QSR covers the methods and documentation of the design, testing, control, manufacturing, labeling, quality assurance, packaging, storage and shipping of our product. We maintain quality assurance and quality management certifications to enable us to market our product in the member states of the European Union, the European Free Trade Association and countries which have entered into Mutual Recognition Agreements with the European Union. These certifications include EN ISO 9001:2000 and CAN/CSA ISO 13485:2003. We are also required to maintain our product registration in a number of other foreign markets such as Canada.

We use small quantities of common cleaning products in our manufacturing operations, which are lawfully disposed of through a normal waste management program. We do not forecast any material costs due to compliance with environmental laws or regulations. Given our limited commercial history, we do not currently provide a formal warranty for the Viveve System. To the extent that any of our components have performance related or technical issues in the field, we replace those components as necessary.

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Patents and Proprietary Technology

We rely on a combination of patent, copyright, trademark and trade secret laws and confidentiality and invention assignment and license agreements to protect our intellectual property rights. As of September 30, 2014, we had an exclusive license to eight issued U.S. patents primarily covering the Viveve System and methods of use, the earliest of which expires in 2015 and the latest of which expires in 2017 three pending U.S. patent applications, 12 issued foreign patents and 17 pending foreign patent applications. Some of our foreign applications preserve an opportunity to pursue patent rights in multiple countries. We intend to file for additional patents to strengthen our intellectual property rights, but we cannot be certain that our patent applications will issue.

All of our employees and consultants are required to execute confidentiality agreements in connection with their employment and consulting relationships with us. We also require them to agree to disclose and assign to us all inventions conceived or made in connection with the employment or consulting relationship. We cannot provide any assurance that our employees and consultants will abide by the confidentiality or invention assignment terms of their agreements. Despite measures taken to protect our intellectual property, unauthorized parties may copy aspects of our product or obtain and use information that we regard as proprietary.

“Viveve,” is a registered trademark in the U.S. and several foreign countries. As of September 30, 2014, we had one registered trademark worldwide, which currently provides coverage in 106 countries. We intend to file for additional trademarks to strengthen our trademark rights, but we cannot be certain that our trademark applications will issue or that our trademarks will be enforceable.

Edward Knowlton Licensed Patents

On February 10, 2006, Viveve, Inc. entered into an Intellectual Property Assignment and License Agreement with Edward W. Knowlton (“Knowlton”), as amended on May 22, 2006 and July 20, 2007 (collectively, the “Knowlton IP Agreement”), pursuant to which Knowlton granted to Viveve, Inc. an exclusive, royalty-free and perpetual worldwide sublicense to certain intellectual property and technology licensed to Knowlton from a third party, including rights to several patents and patent applications owned by Thermage, Inc. outside the field of contraction, remodeling and ablation of the skin through and including (but not beyond) the subcutaneous fat layer below the skin (collectively, the “Knowlton Licensed IP”). The sublicense under the Knowlton Licensed IP is fully-paid, transferable, sublicensable and permits us to make, have made, use, sell, offer for sale and import any product or technology solely for use in the field of transmucosal treatment of the vagina or vulva (the “Field”) and to practice any process, method, or procedure solely in the Field. The Knowlton IP Agreement also assigns to us all technology and related intellectual property rights owned by Knowlton for the development and commercialization of devices, including any improvements, in the Field (the “Knowlton Assigned IP”). We are obligated to file and reasonably prosecute any patent applications that include a description of the Knowlton Assigned IP as prior art and maintain all patents included in the Knowlton Assigned IP, at our expense. In consideration of the sale, assignment, transfer, release and conveyance and other obligations of Knowlton under the Knowlton IP Agreement, Viveve, Inc. issued 1,600,000 shares of our common stock to Knowlton and agreed to engage the consulting services of Knowlton.

On February 10, 2006, Viveve, Inc. entered into a Consulting Agreement with Knowlton (“Knowlton Consulting Agreement”), pursuant to which Knowlton assigned all rights to any inventions and intellectual property developed during the course of providing consulting services in the Field during the term of the agreement. Under the Knowlton Consulting Agreement, Viveve, Inc. paid Knowlton $100,200, $100,200 and $619,056 for consulting services in the years ended December 31, 2013, December 31, 2012 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2013, respectively. Unless earlier terminated pursuant to the provisions described therein, the term of the Knowlton Consulting Agreement continued until the earlier to occur of (i) the date that is six months after the closing of an initial public offering of Viveve, Inc.’s stock; or (ii) the acquisition by a third party of all or substantially all of the business or assets of Viveve, Inc., whether by asset or stock acquisition, merger, consolidation or otherwise. The agreement could be renewed only upon the mutual written agreement of the parties prior to its expiration. The Knowlton Consulting Agreement expired by its terms on September 23, 2014, the effective date of the Merger. The assignment of the intellectual property developed during the term of the Knowlton Consulting Agreement survives termination.

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Agreement with Solta Medical

Effective April 30, 2010, Viveve, Inc. entered into a Supply Agreement (the “Supply Agreement”) with Solta Medical, Inc. (“Solta”), pursuant to which Solta agreed to sell to Viveve, Inc. the cryogen cooling method and coupling fluid that Solta uses with its ThermaCool® System (“TC3 System”) for use with our compatible radio frequency medical device for the sole purpose of conducting our initial clinical trials. The applicable term of the Supply Agreement is the later of the period through completion of our initial clinical trials or six months following the effective date. On October 14, 2010, the parties amended the term of the Supply Agreement to remain in effect for so long as Solta supports its TC3 System. In the event that Solta discontinues support of its TC3 System and terminates the Supply Agreement, Solta agrees to (i) provide us with information for Solta’s cryogen supplier, (ii) permit us to make any arrangement with such supplier for a continued supply of cryogen and (iii) grant us a royalty free, non-exclusive perpetual license under any Solta intellectual property directed to the design of the cryogen container in the field of treating vaginal tissue.

The portion of the Supply Agreement relating to coupling fluid was subsequently superseded by the parties’ Coupling Fluid License and Product Supply Agreement on September 30, 2010, pursuant to which Solta agreed to (i) grant to Viveve, Inc. a license for the coupling fluid and (ii) supply the coupling fluid at preferred pricing for two years and at non-preferred pricing after two years. The agreement grants to us a royalty-free, fully paid-up, worldwide, perpetual, exclusive license in the field of treating vaginal tissue, with a right to grant sublicenses in such field, to make, have made, use and sell coupling fluid for an aggregate license fee of $125,000. The agreement is for an initial term of three years, after which it will continue to remain in effect unless and until terminated in accordance with the terms therein.

Agreement with Stellartech Research Corporation

On June 12, 2006, Viveve, Inc. entered into a Development and Manufacturing Agreement, as amended and restated on October 4, 2007 (collectively, the “Stellartech Agreement”), with Stellartech Research Corporation for an initial term of three years in connection with the performance of development and manufacturing services by Stellartech and the license of certain technology and intellectual property rights to each party. Under the Stellartech Agreement, we agree to purchase 300 units of generators manufactured by Stellartech. In conjunction with the Agreement, Stellartech purchased 300,000 shares of Viveve, Inc.’s common stock at par value. Under the Stellartech Agreement, we have paid Stellartech $33,000, $325,936 and $6,920,619 for goods and services in the years ended December 31, 2013, December 31, 2012 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2013, respectively. In addition, Stellartech granted to us a non-exclusive, nontransferable, worldwide, royalty-free license in the Field (defined as set forth above) to use Stellartech’s technology incorporated into deliverables or products developed, manufactured or sold by Stellartech to us pursuant to the Stellartech Agreement (the “Stellartech Products”) to use, sell, offer for sale, import and distribute the Stellartech Products within the Field, including the use of software object code incorporated into the Stellartech Products. The Stellartech technology consists of any intellectual property which Stellartech developed or acquired separate and apart from the Stellartech Agreement and all related derivative works. In addition, upon our satisfaction of purchasing a minimum commitment of 300 units of the RF generator component (the “Minimum Commitment”) and the expiration of the Stellartech Agreement, Stellartech agreed to grant a nonexclusive, nontransferable, worldwide, royalty-free, fully-paid license within the Field to use the Stellartech Technology incorporated into the Stellartech Products to make and have made Stellartech Products in the Field.

Stellartech also granted (i) an exclusive (even as to Stellartech), nontransferable, worldwide, royalty-free license within the Field under those certain intellectual property rights licensed to Stellartech pursuant to a development and supply agreement between Stellartech and Thermage, dated October 1, 1997 (the “Thermage Technology”), to use any elements of the Thermage Technology incorporated into the Stellartech Products, solely for the use, sale, offer for sale, importation and distribution within the Field; (ii) upon our satisfaction of the Minimum Commitment and the expiration of the Stellartech Agreement, an exclusive, nontransferable, worldwide, royalty-free, fully-paid license within the Field under Stellartech’s license rights in the Thermage Technology to use any elements of the Thermage Technology which are incorporated into the Stellartech Products to make and have made Stellartech Products in the Field; and (iii) the exclusive right within the Field to prosecute infringers of the portion of Stellartech’s Thermage Technology rights exclusively licensed to us. Our license rights in Thermage Technology also include the use of software object code for Thermage Technology used in the Stellartech Products. As of the date of this prospectus, the Stellartech Agreement has expired. However, the parties still continue to operate under the terms of the agreement. In addition, we have not yet met the Minimum Commitment requirement, and therefore Stellartech has not yet licensed the intellectual property to us pursuant to the Stellartech Agreement.

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In March 2012, Viveve, Inc. entered into a Quality and Regulatory Agreement with Stellartech, pursuant to which the parties clarified their respective quality and regulatory responsibilities under the Stellartech Agreement. The Quality and Regulatory Agreement provides that we will serve as the legal manufacturer for all Stellartech Products developed and sold to us thereunder and that we are obligated to maintain all relevant quality assurance and regulatory processes and requirements required by any regulatory authority and to comply with the processes and requirements set forth in the schedule of responsibilities provided in the agreement.

Government Regulation

The Viveve System is a medical device subject to extensive and rigorous regulation by international regulatory bodies as well as the FDA. These regulations govern the following activities that we perform, or that are performed on our behalf, to ensure that medical products exported internationally or distributed domestically are safe and effective for their intended uses:

● product design, development and manufacture;

● product safety, testing, labeling and storage;

● record keeping procedures;

● product marketing, sales and distribution; and

● post-marketing surveillance, complaint handling, medical device reporting, reporting of deaths, serious injuries or device malfunctions and repair or recall of products.

International

Sales of our product outside the U.S. are subject to foreign regulatory requirements that vary widely from country to country. In addition, exports of medical devices from the U.S. are regulated by the FDA. Complying with international regulatory requirements can be an expensive and time-consuming process and approval is not certain. The time required to obtain registrations or approvals, as required by other countries, may be longer than that required for FDA clearance, and requirements for such registrations or approvals may significantly differ from FDA requirements. We may be unable to obtain or maintain registrations or approvals in other countries. We may also incur significant costs in attempting to obtain and in maintaining foreign regulatory approvals. If we experience delays in receiving necessary registrations or approvals to market our product outside the U.S., or if we fail to receive those registrations or approvals, we may be unable to market our product or enhancements in international markets effectively, or at all, which could have a material adverse effect on our business and growth strategy.

An entity that seeks to export an unapproved Class III medical device to a “non-Tier I” country is required to obtain export approval from the FDA. The Tier I countries are largely defined as industrialized countries with established regulatory infrastructure, such as, among others, Canada and the European Union. In January of 2011, we sought to obtain FDA approval to export the Viveve System to Mexico, Brazil and Korea (all non-Tier I countries). An export approval was obtained on March 7, 2011. Exportation of an unapproved Class III medical device to a Tier I country is permitted without FDA approval provided that certain conditions are met. Accordingly, we have exported the Viveve System to Canada or the European Union without FDA approval in accordance with Section 802 of the FDC Act.

Once an entity has obtained a marketing authorization for the product in a Tier I country (e.g., a CE mark, etc.), the device can then be shipped from the U.S. to any country in the world without FDA approval. On December 7, 2010, we obtained a CE Mark for the Viveve System. As a result, we may now legally export the Viveve System to non-Tier I countries, such as China and Hong Kong without FDA approval.

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Entities legally exporting products from the U.S. are often asked by foreign customers or foreign governments to supply a certificate for products regulated by the FDA. To satisfy this request, an exporter may request that FDA issue them an export certificate to accompany a device. An export certificate is a document prepared by FDA containing information about a product’s regulatory or marketing status in the U.S. We have requested the issuance of export certificates to accompany exports to China, Hong Kong and Australia. However, to date, these export certificates have yet to be issued.

Canada

We are subject to the requirements of Health Canada and the regulations that govern medical devices in Canada. In Canada, certain devices must have a “medical device license” before they can be sold. Prior to selling a device in Canada, manufacturers of Class II, III and IV devices must submit a Medical Device Application which is reviewed by the Therapeutic Products Directorate (“TPD”), the Canadian authority that monitors and evaluates the safety, effectiveness and quality of diagnostic and therapeutic medical devices in Canada. All medical devices sold in Canada are categorized by the TPD into four different classes with Class I devices presenting the lowest potential risk (e.g. a thermometer) and Class IV devices presenting the greatest potential risk (e.g. pacemakers). Manufacturers of Class I devices do not need a medical device license to sell their product in Canada, but manufacturers of Class II, III and IV devices must receive a license. Once a medical device license has been granted, the TPD will continue to monitor medical devices to ensure they continue to be safe and effective. Medical device licenses granted by the TPD do not expire; however, the manufacturer is required to annually confirm that the information maintained by Health Canada with respect to the medical device is correct and accurate. The failure to do so may result in the cancellation of the license.

Viveve, Inc. currently holds a medical device license in Canada for the Viveve System which has been categorized as a Class III device.

European Union (EU)

We are subject to the requirements of the Medical Device Directive, or MDD, Council Directive 93/42/EEC of 14 June 1993 which were made mandatory in March 21, 2010. This Directive harmonizes the laws relating to medical devices laws within the European Union. In order for a manufacturer to legally place a medical device on the European market the requirements of the MD Directive have to be met. Manufacturers’ products meeting harmonized standards have a presumption of conformity to the Directive. Products conforming to the MD Directive must have a CE Mark applied.

Medical devices are classified by the Directive into four categories as Class I, Class IIa, Class IIb, and III. Class I devices present the lowest potential risk (e.g. a thermometer) and Class III devices present the greatest potential risk (e.g. implant, pacemakers). The Directive stipulates that an authorized third party or Notified Body must be involved in the review and conformity of the product in order to gain CE Mark. Viveve, Inc. has a Notified Body that reviews the Viveve System for conformity on an annual basis.

Viveve, Inc. currently holds a CE Mark in the European Union for the Viveve System which has been categorized as a Class IIb device.

Hong Kong

The Department of Health, or DOH, is the main health authority in Hong Kong. Under the DOH, the Medical Device Control Office, or MDCO, regulates medical devices. Similar to the Canadian classifications system described above, medical devices sold in Hong Kong are classified as I-IV according to the risk level associated with their intended use. Class I devices are low-risk medical devices, such as bandages and dressings. Class II devices are medium-low-risk devices, such as suction pumps and gastroscopes. Class III devices are medium-high-risk devices, such as orthopedic implants and medical lasers. Class IV devices are high-risk devices, such as prosthetic heart valves and implantable cardiac pacemakers. The main contact point with the MDCO is the Local Representative Person (LRP), who must be a locally-registered entity. The LRP must be either the manufacturer of the device or approved by the manufacturer to perform the duties of the LRP. The LRP submits the application for listing medical devices and fulfills any requests from the MDCO, such as making documents referenced in the application available for inspection. After the device is listed, the LRP is responsible for the marketing and post-market procedures, which include keeping distribution records, handling complaints, initiating product recalls, managing adverse incidents, and reporting changes. The manufacturer must issue an LRP appointment letter and attach it to each product registration application. Currently, market approval from one of the Global Harmonization Task Force (GHTF) founding members (U.S., Canada, Australia, the European Union, and Japan) is required for medical device registration in Hong Kong.

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The Viveve System is currently classified in Hong Kong as a Class II device.

Japan

We currently import the Viveve System into Japan in accordance with the physician import license pathway which allows a medical device to be used and sold in Japan. The physician import license pathway permits a device to be sold in Japan provided that such device was specifically requested from a physician in Japan; however, we are not permitted to market the product directly in the country. Our distribution partner in Japan is Okamaura Associates, which assists us in identifying physicians in order to distribute our product in Japan via the physician import license pathway.

United States

FDA’s Premarket Clearance and Approval Requirements

Unless an exemption applies, any medical device we wish to commercially distribute in the U.S. will require either prior 510(k) clearance or premarket approval from the FDA. The FDA classifies medical devices into one of three classes. Devices deemed to pose lower risks are placed in either Class I or II, which requires the manufacturer to submit to the FDA a premarket notification requesting clearance to commercially distribute the device. This process is generally known as 510(k) clearance. In certain instances, devices that would otherwise be subject to premarket approval can be brought to market via de novo reclassification (which is described below). Some low risk devices are exempted from this requirement. Devices deemed by the FDA to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices, or devices deemed not substantially equivalent to a previously cleared 510(k) device, are placed in Class III, requiring premarket approval. Low to moderate risk devices that are dissimilar from existing Class I or II devices can be brought to market via de novo reclassification.

510(k) Clearance Pathway

When a 510(k) clearance is required, we must submit a premarket notification to the FDA demonstrating that our proposed device is substantially equivalent to a previously cleared and legally marketed 510(k) device or a device that was in commercial distribution before May 28, 1976 for which the FDA has not yet called for the submission of premarket approval applications, or PMA. By regulation, the FDA is required to clear or deny a 510(k) premarket notification within 90 days of submission of the application. As a practical matter, clearance often takes significantly longer. The FDA may require further information, including clinical data, to make a determination regarding substantial equivalence. If the FDA determines that the device, or its intended use, is not substantially equivalent to a previously cleared device or use, the FDA will issue a not-substantially equivalent letter and place the device, or the particular use, into Class II.

Any modification to a 510(k)-cleared device that would constitute a major change in its intended use, or any change that could significantly affect the safety or effectiveness of the device, requires a new 510(k) clearance and may even, in some circumstances, require a PMA, if the change raises complex or novel scientific issues or the product has a new intended use. The FDA requires every manufacturer to make the determination regarding the need for a new 510(k) submission in the first instance, but the FDA may review any manufacturer’s decision. If the FDA were to disagree with a manufacturer’s determinations that changes did not require a new 510(k), it could require the manufacturer to cease marketing and distribution and/or recall the modified device until 510(k) clearance or PMA approval is obtained. If the FDA requires a 510(k) clearance or PMA approval for any modifications, the manufacturer may be required to cease marketing and/or recall the modified device, if already in distribution, until 510(k) clearance or PMA approval is obtained and the manufacturer could be subject to significant regulatory fines or penalties.

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De Novo Process

If there is no known predicate for a device (i.e., a legally marketed Class I or II device with comparable indications for use and technological characteristics), a company can request a de novo classification of the product. De novo generally applies where there is no predicate device and the FDA believes the device is sufficiently safe so that no PMA should be required. FDA’s de novo process has just been streamlined to allow a company to request that a new product classification be established based on information provided by the requesting company. This process, known as the direct de novo process, must be discussed and agreed upon by the FDA prior to submission. The direct de novo process allows a company to submit a reclassification petition which includes information that would be included in a 510(k) notice for the subject device in addition to providing FDA with a risk-benefit analysis demonstrating that the device presents a moderate risk thereby not requiring a PMA. The submitter also must provide a draft Annual Control document for the product. The Annual Control document specifies the scope of the device type and the recommendations for submission of subsequent devices for the same intended use. If a product is classified as class II through the direct de novo review process, then that device may serve as a predicate device for subsequent 510(k) pre-market notifications. We intend to market the Viveve System by utilizing the direct de novo process. However, we cannot predict when or if approval of such a petition will be obtained, or whether FDA will create a new product code. In addition, failure to approve a de novo petition, or establishment of a new product code could require us to seek a PMA for the Viveve System. Delays in receipt or failure to receive clearances or approvals could reduce our sales, profitability and future growth prospects.

Premarket Approval (PMA) Pathway

A PMA must be submitted to the FDA if the device cannot be cleared through the 510(k) process. A PMA must be supported by extensive data, including but not limited to, technical, preclinical, clinical trials, manufacturing and labeling to demonstrate to the FDA’s satisfaction the safety and effectiveness of the device for its intended use. No device that we are marketing to date has required premarket approval. During the review period, the FDA will typically request additional information or clarification of the information already provided. Also, an advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations to the FDA as to the approvability of the device. The FDA may or may not accept the panel’s recommendation. In addition, the FDA will generally conduct a pre-approval inspection of the manufacturing facility or facilities to ensure compliance with the QSRs.

New PMAs or PMA supplements are required for modifications that affect the safety or effectiveness of the device, including, for example, certain types of modifications to the device’s indication for use, manufacturing process, labeling and design. PMA supplements often require submission of the same type of information as a PMA, except that the supplement is limited to information needed to support any changes from the device covered by the original PMA and may not require as extensive clinical data or the convening of an advisory panel. There is no guarantee that the FDA will grant PMA approval of our future products, if one is required, and failure to obtain necessary approvals for our future products would adversely affect our ability to grow our business. Delays in receipt or failure to receive approvals could reduce our sales, profitability and future growth prospects.

Clinical Trials

Clinical trials are almost always required to support an FDA premarket application or de novo reclassification, and are sometimes required for 510(k) clearance. With respect to the Viveve System, the FDA has asked us to conduct a clinical study under an Investigational Device Exemption or IDE to support a future product submission. In the U.S., these clinical trials generally require submission of an application for an Investigational Device Exemption, or IDE, to the FDA. The IDE application must be supported by appropriate data, such as animal and laboratory testing results, showing that it is safe to test the device in humans and that the testing protocol is scientifically sound. The IDE must be approved in advance by the FDA for a specific number of patients unless the product is deemed a non-significant risk device eligible for more abbreviated IDE requirements. Clinical trials for significant risk devices may not begin until the IDE application is approved by FDA and the appropriate institutional review boards, or IRBs, at the clinical trial sites. Our clinical trials must be conducted under the oversight of an IRB at the relevant clinical trial sites and in accordance with FDA regulations, including but not limited to those relating to good clinical practices. We are also required to obtain the patients’ informed consent that complies with both FDA requirements and state and federal privacy regulations. We, the FDA or the IRB at each site at which a clinical trial is being performed may suspend a clinical trial at any time for various reasons, including a belief that the risks to study subjects outweigh the benefits. Even if a trial is completed, the results of clinical testing may not demonstrate the safety and efficacy of the device, may be equivocal or may otherwise not be sufficient to obtain clearance or approval of the product. Similarly, in Europe and other regions, clinical study protocols must be approved by the local ethics committee and in some cases, including studies with high-risk devices, by the Ministry of Health in the applicable country.

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In June 2012, we submitted a pre-IDE application and requested an in-person meeting with the FDA to solicit feedback in advance of filing an IDE to conduct a clinical study of the Viveve System to support regulatory submission. In August 2012, we met with the FDA and received feedback on our pre-clinical data, historical clinical data, and a clinical protocol for a prospective randomized controlled trial. We plan to re-submit our IDE application by the end of 2015. If approval of the IDE application is received, we believe it will enable us to begin our U.S. clinical study.

Continuing Regulation

After a device is placed on the market, numerous regulatory requirements continue to apply. These include:

● product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action;

● quality system regulations, or QSRs, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process;

● labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses;

● Medical Device Reporting, or MDR, regulations, which require that a manufacturer report to the FDA if its device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur;

● post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device; and

● regulations pertaining to voluntary recalls and notices of corrections or removals.

The FDA has broad post-market and regulatory enforcement powers. We and our third-party manufacturers are subject to announced and unannounced inspections by the FDA and the Food and Drug Branch of the California Department of Health Services, or CDHS, to determine compliance with the QSR and other regulations. In the past, our facility has been inspected, and observations were noted, including an April 2012 CDHS inspection that cited deficiencies related to signature authority of inspection documentation, incomplete corrective action responses, and labeling indicating that our product contained no latex without proper objective evidence. The FDA and CDHS have accepted our responses to these observations, and we believe that we are in substantial compliance with the QSR.

Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions:

● warning letters, untitled letters, fines, injunctions, consent decrees and civil penalties;

● repair, replacement, refunds, recall or seizure of our products;

● operating restrictions, partial suspension or total shutdown of production;

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● refusing our requests for 510(k) clearance or premarket approval of new products or new intended uses;

● refusing to grant export approval for our product;

● withdrawing 510(k) clearance or premarket approvals that are already granted; and

● criminal prosecution.

If any of these events were to occur, it could have a material adverse effect on our business.

We are also subject to a wide range of federal, state and local laws and regulations, including those related to the environment, health and safety, land use and quality assurance. We believe that compliance with these laws and regulations as currently in effect will not have a material adverse effect on our capital expenditures, earnings and competitive and financial position.

Competition

The medical device industry is characterized by intense competition and rapid innovation. While we believe that our solution to treat vaginal laxity is unique and offers a more effective solution from that which is on the market currently, the market for the treatment of vaginal laxity and related decreases in women’s sexual function remains a tremendous, under-developed opportunity. Therefore, competition is expected to increase, particularly as the market becomes more developed with further solutions. Aside from Kegel exercises and invasive surgical procedures, such as LVR, there are several companies developing laser-based technologies for the treatment of vaginal laxity and several others developing drug therapies and therapeutics for the treatment of various types of sexual dysfunction. Further, the overall size and attractiveness of the market may compel larger companies, focused in the OBGYN, aesthetic or women’s health markets, and with much greater capital and other resources, to pursue development of or acquire technologies that may address this problem. Potential competitors include, but are not limited to Fotona, BioSante, Apricus, Conceptus, Bayer AG and others.

Employees

As of November 20, 2014, we had 7 full-time employees and retained the services of several qualified consultants. We believe that our future success will depend in part on our continued ability to attract, hire and retain qualified personnel. None of our employees is represented by a labor union, and we believe that our employee relations are good.

Facilities

We currently lease office and laboratory facilities at 150 and 154 Commercial St., Sunnyvale, California 94086. The space consists of approximately 7,777 square feet, leased from the Castine Group. The term of the lease agreement, dated January 25, 2012, commenced on March 2012 and will terminate on February 28, 2015. Rent expense for the year ended December 31, 2013 was $173,896. Future minimum payments under the lease are as follows:

Year Ending December 31,

2014 – $ 184,002

2015 – $ 30,952

We believe that these facilities are adequate for our current business operations.

Legal Proceedings

We are not currently a party to any legal proceedings.

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MANAGEMENT

On September 23, 2014, our executive officers and directors prior to the Merger each tendered his resignation from all positions then held with us. Set forth below is certain information regarding our current executive officers and directors. Each of the directors was elected to serve until our next annual meeting of stockholders or until his or her successor is elected and qualified. Our officers are appointed by, and serve at the pleasure of, the board of directors.

Name	Age	Position
Patricia Scheller	53	Chief Executive Officer and Director
Brigitte Smith	46	Director
Mark S. Colella	41	Director
Carl Simpson	73	Director
Daniel Janney	48	Director
Scott Durbin	46	Chief Financial Officer

Biographical information with respect to our executive officers and directors is provided below. There are no family relationships between any of our executive officers or directors.

Patricia Scheller. Ms. Scheller was elected as a director of Viveve Medical, Inc. on September 18, 2014 (with her service to begin following the Merger) and has been a director of our wholly-owned subsidiary, Viveve, Inc., since June 2012. Ms. Scheller also serves as our Chief Executive Officer and, since May 2012, as Chief Executive Officer of Viveve, Inc. Prior to joining Viveve, Inc., she served as the Chief Executive Officer of Prescient Medical, Inc. (“PMI”), a privately held company that developed diagnostic imaging catheters and coronary stents designed to reduce deaths from heart attacks, from September 2004 through April 2012 and as a director of PMI from July 2004 to September 2011. Prior to joining PMI, from August 2003 to September 2004, she was the Chief Executive Officer of SomaLogic, a biotechnology company focused on the development of diagnostic products using aptamer technology. From December 2000 to April 2003, Ms. Scheller also managed several business units at Ortho-Clinical Diagnostics, a Johnson & Johnson company, and from October 1997 to November 2000 served in key executive positions at Dade Behring, a clinical diagnostics firm. While at Dade Behring Holdings, Inc., she directed the commercialization of the hsCRP diagnostic test, a screening test for systemic inflammation, which has been shown to increase the risk of heart attacks. The hsCRP test was the first diagnostic test added to the cardiac test panel by the Centers for Disease Control and Prevention and the American Heart Association in over 30 years. As Director of cardiology systems at Cordis Corporation (a Johnson & Johnson company) from February 1994 to February 1996, Ms. Scheller managed the launch of the first Palmaz-Schatz® balloon-expandable coronary stent, the first major product entry into what became a $6 billion market. Ms. Scheller received a B.S.E. degree in Biomedical Engineering from Duke University and completed executive business education programs at Harvard University, Massachusetts Institute of Technology, Columbia University and Northwestern University. Because of her extensive experience in the healthcare industry, we concluded that Ms. Scheller should serve as a director.

Brigitte Smith. Ms. Smith was elected as a director of Viveve Medical, Inc. on September 18, 2014 (with her service to begin following the Merger) and has been a director of Viveve, Inc. since January 2007. Ms. Smith is co-founder and Managing Director of GBS Venture Partners, a leading Australian life science venture capital investor founded in 1998 whose fund, GBS Bioventures III, is one of our significant stockholders. GBS Venture Partners has completed more than 40 medical device and life science investments for companies based in Australia and the U.S. Before joining GBS Venture Partners, Ms. Smith worked with high-tech start-up companies in Australia and the U.S. in fundraising and business development roles. From 1990 to 1992 Ms. Smith also served as a consultant for Bain & Company, a strategic management consulting firm. Ms. Smith is also on the board of GBS Venture Partners portfolio companies AirXpanders Inc., Endoluminal Sciences Pty Ltd, Neuromonics Pty Ltd and Proacta Inc. Ms. Smith earned her Bachelor of Chemical Engineering with Honors from the University of Melbourne, her Master of Business Administration with Honors from the Harvard Business School and her Master of International Relations from the Fletcher School of Law and Diplomacy in Boston, Massachusetts, where she was also a Fulbright Scholar. Ms. Smith is a Fellow of The Australian Institute of Company Directors. Because of her significant experience in assessing early stage medical device and life sciences companies and her investing experience, we concluded that Ms. Smith should serve as a director.

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Mark S. Colella. Mr. Colella was elected as a director of Viveve Medical, Inc. on September 18, 2014 (with his service to begin following the Merger) and has been a director of Viveve, Inc. since April 2012. Mr. Colella is a principal of 5AM Ventures, II, Inc., a leading life science venture capital investor, founded in 2002. 5AM Ventures, II, Inc. is one of our significant stockholders. Mr. Colella specializes in medical device and life science investing at 5AM Ventures and brings over 15 years of venture capital and operating experience in medical device and healthcare companies. Mr. Colella currently serves, or has served, in board or advisory roles with Biodesy, Ceterix, DVS (acquired by Fluidigm), Flexion (IPO), Incline (acquired by The Medicines Company), Pearl (acquired by AstraZeneca), Semprus (acquired by Teleflex) and WaveRx. He also sits on the Advisory Board for the Innovation and New Ventures Office at Northwestern University and The V Foundation Wine Celebration—a charity wine auction—which has raised over $30 million for cancer research. Before joining 5AM Ventures, from 2007 to 2008 he was head of marketing for BÂRRX Medical, Inc., a Bay Area startup medical device company sold to Covidien for $413 million. Prior to his employment with BÂRRX, he held various management roles including with Stryker, Inc. from 2002 to 2007, focused in the fields of orthopedics, laparoscopy, urology, gynecology, and general minimally invasive surgery. In addition, he spent four years, from 1996 to 2000, as an Executive Director managing healthcare facilities with Primrose Alzheimer’s Living, Inc., an early stage healthcare service startup company, and one year working for Versant Ventures. Mr. Colella holds a B.S. degree in Biology from Williams College and earned his M.B.A. from Northwestern University, the Kellogg School of Management. Prior to Williams College he spent two years at the U.S. Air Force Academy. Because of his extensive experience in the medical device industry, as well as his financial and investing experience in early stage companies, we concluded that Mr. Colella should serve as a director.

Carl Simpson. Mr. Simpson was elected as a director of Viveve Medical, Inc. on September 18, 2014 (with his service to begin following the Merger) and has been a director of Viveve, Inc. since its inception in September of 2005. Mr. Simpson has worked in the medical device industry for over 40 years. In 2005 Mr. Simpson founded and became the Managing Director of Coronis Medical Ventures, LLC, a venture capital entity. From 2001 to 2004 Mr. Simpson was a partner for Versant Ventures. In 1993, he founded CardioGenesis Corp. a medical device company that designs, manufactures and distributes laser-based surgical products that promote cardiac angiogenesis and served as Vice President of Development until 1997. In 1979, Mr. Simpson founded Advanced Cardiovascular Systems (“ACS”) a medical device company that develops and markets medical devices for treatment of cardiovascular diseases and served as Senior Vice President of Research and Development until 2001. ACS was sold to Eli Lilly in 1984 and spun-off into Guidant Vascular Intervention. Mr. Simpson currently serves on the board of Novobionics, Curant Medical, Uptake Medical and Entent. He also served on the board of Silver Bullet from 2009 to 2012, CoRepair from 2007 to 2013, Revascular Therapeutics from 2004 to 2011, Conor MedSystems Inc. from 2003 to 2005, Thermage from 1997 to 2004, Interventional Thermodynamics (Innerdyne) from 1989 to 1991 and Interventional Technologies from 1985 to 1989. His undergraduate training is in Microbiology and Biochemistry. His graduate degree is in Electrical Engineering/Computer Science and he holds an MBA, both from the University of Santa Clara. Because of Mr. Simpson’s prior experience with multiple start-up companies, his understanding of VC business models and 40 years of operational and clinical experience, we concluded that he should serve as a director.

Daniel Janney. Mr. Janney was elected as a director of Viveve Medical, Inc. on September 18, 2014 (with his service to begin following the Merger). Since November 2012, Mr. Janney has served as a director of Esperion Therapeutics, Inc. (NASDAQ: ESPR). Mr. Janney is a managing director at Alta Partners, a life sciences venture capital firm, which he joined in 1996. Prior to joining Alta, from 1993 to 1996, he was a Vice President in Montgomery Securities' healthcare and biotechnology investment banking group, focusing on life sciences companies. Mr. Janney is a director of a number of companies including Alba Therapeutics Corporation, Lithera, Inc., Prolacta Bioscience, Inc., Sutro Biopharma and ViroBay, Inc. He holds a Bachelor of Arts in History from Georgetown University and an M.B.A. from the Anderson School at the University of California, Los Angeles. Because of Mr. Janney's experience working with and serving on the boards of directors of life sciences companies and his experience working in the venture capital industry, we concluded that he should serve as a director.

Scott Durbin. Mr. Durbin joined Viveve, Inc. as its Chief Financial Officer in February 2013 and was appointed as the Chief Financial Officer of Viveve Medical, Inc. on September 23, 2014. From June 2012 to January 2013 he served as an advisor and Acting Chief Financial Officer for Viveve, Inc. Prior to joining Viveve, Inc., from June 2010 to October 2011, he was Chief Financial Officer of Aastrom Biosciences (“Aastrom”), a publicly traded, cardiovascular cell therapy company. Before Aastrom, he spent six years as Chief Operating and Financial Officer for Prescient Medical (“Prescient”) from May 2004 to June 2010, a privately held company that developed diagnostic imaging catheters and coronary stents designed to reduce deaths from heart attacks. Prior to Prescient, from January 2003 to April 2004, he spent several years as a financial consultant for two publicly traded biotech companies, Scios Inc. – a Johnson & Johnson company and Alteon Inc. Mr. Durbin began his career in corporate finance as an investment banker in the Healthcare and M&A groups at Lehman Brothers Inc. from August 1999 to January 2003, where he focused on mergers and acquisitions and financings for the life science industry. At Lehman, he successfully executed over $5 billion in transactions for medical device and biotechnology companies. He began his career as a Director of Neurophysiology for Biotronic, Inc. Mr. Durbin received a B.S. from the University of Michigan and an M.P.H. in Health Management with Honors from the Yale University School of Medicine and School of Management.

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Director or Officer Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers has, during the past ten years, been involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.

Independent Directors

We believe that, with the exception of Patricia Scheller, each of our remaining directors are “independent directors,” as that term is defined by Rule 5605 of The NASDAQ Stock Market.

Compensation Committee Interlocks and Insider Participation

None of our directors or executive officers serves as a member of the board of directors or compensation committee of any other entity that has one or more of its executive officers serving as a member of our board of directors.

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EXECUTIVE COMPENSATION

The table below sets forth, for the last two fiscal years, the compensation earned by (i) each individual who served as our principal executive officer or as the principal executive officer of Viveve, Inc., and (ii) our most highly compensated executive officers, other than our principal executive officer, who were serving as our executive officers or as the executive officers of Viveve, Inc. at the end of the last fiscal year. We refer to these individuals in the discussion below as our “named executive officers”.

Summary Compensation Table
Name and principal position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)(1)	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Patricia Scheller, Chief Executive	2013	335,000						4,200(2)	339,200
Officer, Viveve, Inc.	2012	214,617			155,045				369,662
Scott Durbin, Chief Financial	2013	273,167			57,141			37,500(2)	367,808
Officer, Viveve, Inc.	2012							201,080(2)	201,080
Kerry Pope, former President and	2013	300,350			2,781				303,131
Chief Operations Office, Viveve, Inc.	2012	309,969		9,991	62,018				381,978
Alan Curtis, Vice-President,	2013	200,000			1,450				201,450
Regulatory, Clinical and Quality, Viveve, Inc.	1012	197,692			7,103				204,795
Mark R. Tauscher, former Chief	2013	290,277(3)			160,506(4)				450,783
Executive Officer, PLC Systems Inc.	2012	311,858			11,830(4)			12,000(5)	335,688
Gregory W. Mann, former Chief	2013	140,000			107,004(4)				247,144
Financial Officer, PLC Systems Inc.	2012	130,000			11,830(4)				141,830
Vincent C. Puglisi, Managing	2013	198,349			21,058(4)				219,407(6)
Director – International, PLC Systems Inc.	2012	164,764			6,670(4)			6,000(5)	177,434

(1) Except as otherwise disclosed in note 4 below, these amounts represent the aggregate grant date fair value for option and warrant awards for years ended December 31, 2013 and 2012, respectively, computed in accordance with FASB ASC Topic 718. Please see Note 10 to our audited financial statements for the assumptions used in determining the aggregate grant date fair value.

(2) These amounts represent consulting payments for services performed during 2012, prior to the employment agreement with Mr. Durbin in January 2013 and other benefits for Ms. Scheller in 2013.

(3) On August 19, 2013, Mr Tauscher’s base salary was adjusted from $325,469 to $225,000.

(4) Amounts represent the aggregate grant date fair value of the stock option awards granted by PLC Systems Inc. during 2013 and 2012. The grant date fair value is computed using the Black-Scholes Option Pricing Model. The assumptions underlying the valuation of the equity awards are as follows: (A) for 2013, (i) expected life: 3 to 6 years; (ii) interest rate: 0.73% to 1.67%; (iii) volatility: 195.75 to 217.52; and (iv) expected dividend yield: none; (B) for 2012: (i) expected life: 5 to 6 years; (ii) interest rate: 0.19% to 0.69%; (iii) volatility: 204.1 to 216.2; and (iv) expected dividend yield: none.

(5) Consists of a cash car allowance.

(6) Mr. Puglisi’s employment with the Company was terminated on August 16, 2013. Mr. Puglisi received $83,281.51 in severance payments during 2013.

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Outstanding Equity Awards at Fiscal Year-End

Other than as set forth below, there were no outstanding unexercised options, unvested stock, and/or equity incentive plan awards issued to our named executive officers as of December 31, 2013.

Name	Number of Securities Underlying Unexercised Options (# Exercisable)(1)	Number of Securities Underlying Unexercised Options (# Unexercisable)	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options	Option Exercise Price	Option Expiration Date
Patricia Scheller	221,861	0	0	$1.24	October 24, 2022
Scott Durbin	82,579	0	0	$1.24	February 2, 2023

(1) In conjunction with the Merger, we assumed an option for the purchase of 27,529,116 shares of Viveve, Inc. issued to Ms. Scheller and an option for the purchase of 10,258,690 shares of Viveve, Inc. issued to Mr. Durbin. The number of shares of common stock included in column two of the table above represents the number of shares of our common stock (rounded down to the nearest whole share) equal to the number of shares of Viveve, Inc. common stock into which the options were exercisable immediately prior to the effective time of the Merger, multiplied by .0080497, the Merger exchange ratio.

Employment Agreements, Termination of Employment and Change-in Control Agreements

Patricia Scheller

On May 14, 2012, Viveve, Inc. extended a written offer of employment to Patricia Scheller, the terms of which we have assumed. Pursuant to the agreement, Ms. Scheller serves as our Chief Executive Officer on an at-will basis and as a director. The agreement provides that Ms. Scheller will receive a base salary of $335,000 per year, which is subject to adjustment in accordance with our employee compensation policies in effect from time-to-time.

In addition the agreement provides for: (i) an annual incentive bonus (if approved by the board of directors, in their sole discretion) in an amount to be determined by the board of directors; (ii) an incentive payment of $1,000 for every $1 million in new equity financing raised during her first year of service, up to $20,000 (iii) an option for the purchase 27,539,116 shares of Viveve, Inc. common stock exercisable at the fair market value on the date of grant, with the right to purchase 25% of the option shares vesting after 12 months of continuous service and the right to purchase the remainder of the option shares vesting in equal monthly installments over the next 36 months of continuous service, with accelerated vesting upon an Involuntary Termination within 12 months of a Change in Control (as those terms are defined in the agreement); (iv) Company-sponsored benefits as in effect from time to time; (v) paid vacation in accordance with our vacation policy, as in effect from time to time; and (vi) continued base salary and benefits for twelve months following an Involuntary Termination. In conjunction with the Merger, the option issued to Ms. Scheller was assumed by us. As a result of the assumption, the number of shares of our common stock subject to the option was computed by multiplying the number of shares of Viveve, Inc. common stock into which the option was exercisable immediately prior to the effective time of the Merger by 0.0080497, the Merger exchange ratio. The exercise price of the option was determined by dividing the option exercise price immediately prior to the effective time of the Merger by the exchange ratio (rounded up to the nearest cent).

Scott Durbin

On January 23, 2013, Viveve, Inc. extended a written offer of employment to Scott Durbin, the terms of which we have assumed. Pursuant to the agreement, Mr. Durbin serves as our Chief Financial Officer on an at-will basis. The agreement provides that Mr. Durbin will receive a base salary of $298,000, which is subject to adjustment in accordance with our employee compensation policies in effect from time-to-time.

In addition the agreement provides for: (i) an annual incentive bonus (if approved by the board of directors, in their sole discretion) in an amount to be determined by the board of directors; (ii) an incentive bonus of $50,000 in the event a minimum of $1.5 million is raised in equity financing from new investors; (iii) an option for the purchase of 10,258,690 shares of Viveve, Inc. common stock exercisable at the fair market value on the date of grant, with the right to purchase 100,000 option shares vesting on the grant date, 2,614,672 option shares vesting after 12 months of continuous service and the right to purchase the remainder of the option shares vesting in equal monthly installments over the next 36 months of continuous service, with accelerated vesting upon a Change in Control before Mr. Durbin’s service terminates; (iv) Company-sponsored benefits in effect from time to time; (v) paid vacation in accordance with our vacation policy, as in effect from time to time; and (vi) continued base salary and benefits for ten months following an Involuntary Termination. In conjunction with the Merger, the option issued to Mr. Durbin was assumed by us. As a result of the assumption, the number of shares of our common stock subject to the option was computed by multiplying the number of shares of Viveve, Inc. common stock into which the option was exercisable immediately prior to the effective time of the Merger by .0080497, the Merger exchange ratio. The exercise price of the option was determined by dividing the option exercise price immediately prior to the effective time of the Merger by the exchange ratio (rounded up to the nearest cent).

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Director Compensation

The table below sets forth the compensation paid to our directors, exclusive of reimbursed out-of-pocket expenses, during the year ended December 31, 2013 for services provided as a director. To the extent that any of the directors included in the table below was serving as a director on September 23, 2014, the individual resigned on that date. None of the directors of Viveve, Inc. received compensation for their services as directors during the year ended December 31, 2013.

Name	Fees Earned or Paid in Cash	Stock Awards ($)	Option Awards ($)(1)(2)	Non-Equity Incentive Plan Compensation	Nonqualified Deferred Compensation Earnings	All Other Compensation	Total
Kevin J. Dunn(3)	1,500						1,500
Benjamin L. Holmes	5,500		24,552(4)				30,052
Albert C. Kyle	4,000		9,000(4)				13,000
Brent Norton, M.D.	5,500		19,485(4)				24,985
Gregory W. Mann(5)	--						--
Edward Pendergast(6)	2,250						2,250
Mark Tauscher(7)	--						--

(1) The high and low trading prices of our common stock on the OTCBB during the 30-day period prior to July 16, 2013, the date of grant, were $11 and $8. Options issued to these directors on July 16, 2013 have an exercise price of $9. All of these prices reflect the 1-for-100 reverse split of our common stock, which was effected on September 23, 2014.

(2) Amounts represent the aggregate grant date fair value of the stock option as of July 16, 2013, the option grant date.

(3) Mr. Dunn served on our board of directors until June 2013. As of December 31, 2013, Mr. Dunn held options to purchase 1,925 post-reverse split shares of our common stock.

(4) As of December 31, 2013, each of Messrs. Holmes, Kyle and Dr. Norton held options to purchase an aggregate of 9,743 post-reverse split shares of our common stock. The grant date fair value is computed using the Black-Scholes Option Pricing Model. The assumptions underlying the valuation of the equity awards are as follows: (A) for 2013, (i) expected life: 3 to 6 years; (ii) interest rate: 0.73% to 1.67%; (iii) volatility: 195.75 to 217.52; and (iv) expected dividend yield: none; (B) for 2012: (i) expected life: 5 to 6 years; (ii) interest rate: 0.19% to 0.69%; (iii) volatility: 204.1 to 216.2; and (iv) expected dividend yield: none.

(5) As an employee director, Mr. Mann, an executive officer of the company, was not eligible to receive either compensation or an annual stock grant for service in his capacity as director.

(6) Mr. Pendergast served on our board of directors until June 2013. As of December 31, 2013, Mr. Pendergast held options to purchase 4,300 post-reverse split shares of our common stock.

(7) As an employee director, Mr. Tauscher, an executive officer of the company, was not eligible to receive either compensation or an annual stock grant for service in his capacity as director.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of November 20, 2014, and as adjusted to reflect the one-for-100 reverse stock split effected on September 23, 2014, regarding the beneficial ownership of our common stock by the following persons:

● each person who, to our knowledge, owns more than 5% of our common stock;

● each of our named executive officers;

● each director; and

● all of our executive officers and directors as a group.

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Unless otherwise indicated in the footnotes to the following table, each person named in the table has sole voting and investment power. The address for each of our named executive officers and directors is c/o Viveve Medical, Inc., 150 Commercial Street, Sunnyvale, California 94086. Shares of common stock subject to options, warrants, or other rights currently exercisable or exercisable within 60 days of November 19, 2014, are deemed to be beneficially owned and outstanding for computing the share ownership and percentage of the stockholder holding the options, warrants or other rights, but are not deemed outstanding for computing the percentage of any other stockholder. As of November 19, 2014, we had 17,161,673 shares of common stock outstanding.

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percent of Class
Named Executive Officers and Directors
Patricia Scheller	300,138(1)	1.7%
Scott Durbin	114,447(2)	0.7%
Brigitte Smith	3,794,986(3)	22.1%
Mark S. Colella	6,926,920(4)	40.4%
Carl Simpson	21,112(5)	0.1%
Daniel Janney	1,899,705(6)	11.1%
All named executive officers and directors as a group (6 persons)	13,057,308	76.1%
Owners of More than 5% of Our Common Stock
5AM Ventures II, L.P.(7) 2200 Sand Hill Road, Suite 110 Menlo Park, California 94025	6,660,205	38.8%
GBS Venture Partners Limited(8) 71 Collins Street, Level 5 Melbourne, Australia C3 VIC 3000	3,598,807	21.0%
Alta BioEquities, L.P.(9) One Embarcadero Center, Suite 3700 San Francisco, California 94111	1,895,788	11.0%

(1) Included in this amount is the right to purchase 221,861 shares of common stock underlying a 10-year option having an exercise price of $1.24 per share and the right to purchase 78,277 shares of common stock subject to a 10-year option for the purchase having an exercise price of $0.60 per share. Excludes 861,041 shares of common stock underlying options that will not vest within 60 days of the date of the registration statement of which this prospectus is a part.

(2) Included in this amount is the right to purchase 82,579 shares of common stock underlying a 10-year option having an exercise price of $1.24 per share and the right to purchase 31,868 shares of common stock subject to 10-year option having an exercise price of $0.60 per share. Excludes 350,552 shares of common stock underlying options that will not vest within 60 days of the date of the registration statement of which this prospectus is a part.

(3) Includes 3,598,807 shares of common stock owned of record by GBS Venture Partners as trustee for GBS BioVentures III, 192,262 shares of common stock owned of record by Ms. Smith and the right to purchase 3,917 shares of common stock underlying a 10-year option having an exercise price of $0.60 per share. Excludes 43,083 shares of common stock underlying options that will not vest within 60 days of the date of the registration statement of which this prospectus is a part. Voting and investment power over the shares of common stock owned of record by GBS Venture Partners as trustee for GBS BioVentures III is held by Ms. Smith.

(4) Includes 6,660,205 shares of common stock owned of record by 5AM Ventures II, L.P, 262,798 shares of common stock owned of record by 5AM Co-Investors II, L.P and the right to purchase 3,917 shares of common stock underlying a 10-year option having an exercise price of $0.60 per share. Excludes 43,083 shares of common stock underlying options that will not vest within 60 days of the date of the registration statement of which this prospectus is a part. 5AM Partners II, LLC is the general partner of 5AM Ventures II, L.P. and 5AM Co-Investors II, L.P. Dr. John Diekman, Andrew Schwab and Dr. Scott Rocklage, the managing members of 5AM Partners II, LLC, and Mr. Colella, an assignee of 5AM Partners II, LLC, have shared voting and investment power over the shares beneficially owned by 5AM Ventures II, L.P. and 5AM Co-Investors II, L.P.

(5) Included in this amount are 15,384 shares of common stock, the right to purchase 1,811 shares of common stock underlying a 10-year option having an exercise price of $7.45 per share and the right to purchase 3,917 shares of common stock underlying to a 10-year option having an exercise price of $0.60 per share. Excludes 43,083 shares of common stock underlying options that will not vest within 60 days of the date of the registration statement of which this prospectus is a part.

(6) Includes 1,895,755 shares of common stock owned of record by Alta BioEquities, L.P. Includes the right to purchase 3,917 shares of common stock subject to a 10-year option having an exercise price of $0.60 per share. Excludes 43,083 shares of common stock underlying options that will not vest within 60 days of the date of the registration statement of which this prospectus is a part. Alta BioEquities Management, LLC is the general partner of Alta BioEquities, L.P. Daniel Janney is the Managing Director of Alta BioEquities Management, LLC. and has voting and investment power over the shares beneficially owned by Alta BioEquities, L.P.

(7) Voting and investment power over the shares of common stock owned of record by GBS Venture Partners as trustee for GBS BioVentures III is held by Ms. Smith.

(8) 5AM Partners II, LLC is the general partner of 5AM Ventures II, L.P. Dr. John Diekman, Andrew Schwab and Dr. Scott Rocklage, the managing members of 5AM Partners II, LLC, and Mr. Colella, an assignee of 5AM Partners II, LLC, have shared voting and investment power over the shares beneficially owned by 5AM Ventures II, L.P.

(9) Alta BioEquities Management, LLC is the general partner of Alta BioEquities, L.P. Daniel Janney is the Managing Director of Alta BioEquities Management, LLC. and has voting and investment power over the shares beneficially owned by Alta BioEquities, L.P. Voting and investment power of these securities is held by Alta BioEquities, L.P.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,

AND DIRECTOR INDEPENDENCE

Our determination of the independence of our directors is made using the definition of “independent” contained in the listing standards of the Nasdaq Stock Market. On the basis of information solicited from each director, the board has determined that each of Ms. Smith and Messrs. Colella, Simpson and Janney is independent within the meaning of such rules.

Commission regulations define the related person transactions that require disclosure to include any transaction, arrangement or relationship in which the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years in which we were or are to be a participant and in which a related person had or will have a direct or indirect material interest. A related person is: (i) an executive officer, director or director nominee of the Company, (ii) a beneficial owner of more than 5% of our common stock, (iii) an immediate family member of an executive officer, director or director nominee or beneficial owner of more than 5% of our common stock, or (iv) any entity that is owned or controlled by any of the foregoing persons or in which any of the foregoing persons has a substantial ownership interest or control.

For the period from January 1, 2011, through the date of this prospectus (the “Reporting Period”), described below are certain transactions or series of transactions between us and certain related persons.

Employment and Consulting Agreements

We entered into an employment agreement with Mark Tauscher in December 1999, which was amended in June 2008, and again in August 2013, providing for an annual base salary of not less than $225,000. If Mr. Tauscher’s employment is terminated within 12 months of a change of control, the agreement also provides for the payment to Mr. Tauscher of 50% of his base salary payable immediately upon termination of his employment, with the remaining 50% to be paid in nine equal monthly installments following such termination. Additionally, any severance amount over $300,000 is to be payable in unregistered common stock from the successor entity. We made no severance payment to Mr. Tauscher in conjunction with the Merger.

We entered into an employment agreement with Gregory Mann in October 2011 providing for an annual base salary of not less than $120,000, benefits in accordance with our standard benefits package and stock options to purchase up to 150,000 shares of our common stock. On July 2, 2012, we increased Mr. Mann’s annual base salary to $140,000. In June 2012, our board of directors approved the payment of severance to Mr. Mann in an amount equal to 12 months’ salary as of such time in the event Mr. Mann's employment is terminated upon a change of control and is not retained for at least 12 months following the date of such change of control. We made no severance payment to Mr. Mann in conjunction with the Merger.

On June 1, 2012, Viveve, Inc. entered into a consulting agreement with Scott Durbin. Pursuant to the terms of the agreement, Mr. Durbin was to provide guidance and services related to finance, investor relations, Commission reporting and compliance, accounting, and tax preparation and compliance, and fund raising activities, while serving in the capacity of interim Chief Financial Officer. Pursuant to the terms of the consulting agreement, Mr. Durbin agreed to (i) assist in the closing of a financing of at least $4 to $5 million, (ii) establish a 5 year corporate financial forecast model and update as necessary, (iii) prepare investor presentations, (iv) attend and present with the Chief Executive Officer at investor presentations, and (v) perform such other services as are customarily performed by a chief financial officer. Viveve, Inc. agreed to compensate Mr. Durbin at a rate equal to $1,500 per diem, payable bi-monthly, plus a bonus commensurate with his contribution to the completion of a Series B Preferred stock offering, subject to board approval and payable in cash or common stock upon closing. On January 23, 2013, the parties agreed to terminate the consulting agreement when Mr. Durbin’s accepted employment as the Chief Financial Officer of Viveve, Inc. During the Reporting Period, a total of $201,080was paid to Mr. Durbin pursuant to the consulting agreement.

Related Party Convertible Bridge Notes

Viveve, Inc. entered into that certain Note Purchase Agreement dated as of November 20, 2012, as amended by that certain Amendment No. 1 to the Note Purchase Agreement on February 13, 2013, pursuant to which it issued convertible promissory notes in the aggregate principal amount of $1,000,000 (the “2012 Bridge Notes”) to GBS Venture Partners Limited as trustee for GBS BioVentures III and 5AM Ventures II, L.P. (including 5AM Co-Investors II, L.P.). The 2012 Bridge Notes accrued interest at an annual rate of 8% and matured on the earlier of (i) the date upon which the majority note holders demand repayment after May 15, 2013 or (ii) the date of the closing of a qualified financing in which Viveve, Inc. (or, in the event of a reverse merger into a public shell company, the shell company) issues equity securities for gross proceeds of not less than $5,000,000 (the “Qualified Financing”) (excluding the aggregate amount of debt securities converted into shares of equity securities upon conversion of the 2012 Bridge Notes). Upon the closing of a Qualified Financing prior to the maturity date, all outstanding principal and unpaid accrued interest under the 2012 Bridge Notes were to automatically convert into that certain number of shares of equity securities equal to the principal and unpaid accrued interest divided by the per share purchase price of the shares sold in the Qualified Financing. On September 23, 2014, in conjunction with the Merger, we issued 1,707,339 shares of common stock to GBS BioVentures III and 1,707,339 shares of common stock to 5AM Ventures II. LP, (including 5AM Co-Investors II L.P.) representing 9.5% and 9.5%, respectively, of the common stock outstanding. Brigitte Smith, a member of our board of directors, is the managing partner of GBS Venture Partners Limited, which is the trustee of GBS BioVentures III and Mark Colella, a member of our board of directors, is a principal of 5AM Ventures.

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Viveve, Inc. entered into that certain Note Purchase Agreement dated as of February 13, 2013 pursuant to which it issued convertible promissory notes in the aggregate principal amount of $2,500,000 (the “February 2013 Bridge Notes”) to GBS Venture Partners and 5AM Ventures II, L.P. in multiple closings occurring on February 13, February 20, March 13, March 27, April 26, 2013, June 13, August 9 and August 23, 2013. The February 2013 Bridge Notes accrued interest at an annual rate of 8% and were to mature on the earlier of (i) the date upon which the majority note holders demand repayment after August 13, 2013 or (ii) the closing of a Qualified Financing (excluding the aggregate amount of debt securities converted into shares of equity securities upon conversion of the February 2013 Bridge Notes and the 2012 Bridge Notes). Upon the closing of a Qualified Financing prior to the maturity date, the outstanding principal and unpaid accrued interest of each February 2013 Bridge Note was to automatically convert into that certain number of shares of equity securities equal to the principal and unpaid accrued interest divided by 80% of the per share purchase price of the shares sold in the Qualified Financing.

On September 27, 2013, Viveve, Inc. entered into a note purchase agreement pursuant to which it issued convertible promissory notes in the aggregate principal amount of $500,000 to 5AM Ventures II, L.P. (the “September 2013 Bridge Notes”). The September 2013 Bridge Notes were intended as bridge financing to a planned alternative public offering (“APO”) in the third quarter of 2013. The September 2013 Bridge Notes accrued interest at 8% per annum and were to mature at the earlier of the date upon which the majority note holders demanded repayment after March 31, 2014 or the date of the closing of a qualified financing in which Viveve, Inc. would issue common or preferred stock for gross proceeds of not less than $5,000,000, excluding the conversion of the September 2013 Bridge Notes, the November 2012 Bridge Notes and the February 2013 Bridge Notes. The September 2013 Bridge Notes were to convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which was defined as 70% of the purchase price in the qualified financing.

On November 12, 2013, Viveve, Inc. entered into a note purchase agreement pursuant to which it issued convertible promissory notes in the aggregate principal amount of $500,000 to 5AM Ventures II, L.P. (the “November 2013 Bridge Notes”). The November 2013 Bridge Notes were intended as bridge financing to a planned APO in the fourth quarter of 2013. The November 2013 Bridge Notes accrued interest at 8% per annum and matured at the earlier of the date upon which the majority note holders demanded repayment after March 31, 2014 or the date of the closing of a qualified financing in which Viveve, Inc. would issue common or preferred stock for gross proceeds of not less than $5,000,000 excluding the conversion of the November 2013 Bridge Notes, the November 2012 Bridge Notes, the February 2013 Bridge Notes and the September 2013 Bridge Notes. The November 2013 Bridge Notes were to convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which was defined as 70% of the purchase price in the qualified financing.

On December 27, 2013, Viveve, Inc. entered into a note purchase agreement pursuant to which it issued convertible promissory notes in the aggregate principal amount of $375,000 to 5AM Ventures II, L.P. (the “December 2013 Bridge Notes”). The December 2013 Bridge Notes were intended as bridge financing to a planned APO in the first quarter of 2014. The December 2013 Bridge Notes accrued interest at 9% per annum and were to mature at the earlier of the date upon which the majority note holders demanded repayment after March 31, 2014 or the date of the closing of a qualified financing in which Viveve, Inc. would issue common or preferred stock for gross proceeds of not less than $5,000,000 excluding the conversion of the bridge notes. The December 2013 Bridge Notes were to convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which is defined as 70% of the purchase price in the qualified financing.

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On March 5, 2014, Viveve, Inc. entered into a note purchase agreement, as amended on May 9, 2014, and May 29, 2014 (the “March 2014 Note Purchase Agreement”) pursuant to which Viveve issued convertible promissory notes in the aggregate principal amount of $1,500,000 to GCP, Alpha Capital Anstalt, Sandor Capital Master Fund, Barry Honig, 5AM Ventures II, L.P., GBS Venture Partners, and Alta Bioequities, L.P. The notes accrued interest at 9% per annum and were exchanged for common stock in the private offering that was completed on September 23, 2014.

In conjunction with the completion of the Merger, the Bridge Notes issued to 5AM Ventures II, LP and 5AM Co-Investors II, LP were cancelled in full while the Bridge Notes issued to GBS Venture Partners werecancelled in full in exchange for 943,596 shares of our common stock. The remaining Bridge Notes described above were exchanged for common stock in the Private Offering.

Settlement Agreement with Dr. Parmer

In April 2012, an arbitration proceeding relating to a dispute between Viveve, Inc. and its original Chief Executive Officer, Dr. Michael Parmer, was settled and resulted in the award and judgment in favor of Dr. Parmer. In accordance with the Settlement Agreement and General Release, dated April 20, 2012, by and among Viveve, Inc., Dr. Seth J. Herbst, and Dr. Parmer, Viveve, Inc. agreed to pay Dr. Parmer $1,000,000, less applicable withholdings, issue a subordinated unsecured note of $150,000 to be payable in three equal installments on March 31, 2013, June 30, 2013 and September 30, 2013, and issue 7,546 post-reverse split shares of restricted common stock. In addition, upon the closing of a sale of Viveve, Inc. Series B preferred stock, Dr. Parmer was entitled to receive 3,000,000 shares of Series B preferred stock of Viveve, Inc., subject to his execution of the applicable financing documents. Dr. Parmer did not execute the financing documents.

Policies and Procedures for Related Person Transactions

While our board of directors has not adopted a formal written related person transaction policy that sets forth the policies and procedures for the review and approval or ratification of related person transactions it the Company’s practice and procedure to present all transactions arrangements, relationships, or any series of similar transactions, arrangements, or relationships, in which the Company was or is to be a participant and a related person had or will have a direct or indirect material interest, to the board of directors for approval.

DESCRIPTION OF SECURITIES

Authorized and Outstanding Capital Stock

We have authorized an unlimited number of shares of common stock and preferred stock, without par value. As of November 19, 2014 we had 17,161,673 shares of common stock outstanding and held by 653 stockholders of record. There are no shares of preferred stock outstanding.

Common Stock

The holders of our common stock are entitled to one vote per share. In addition, the holders of our common stock will be entitled to receive pro rata dividends, if any, declared by our board of directors out of legally available funds; however, the current policy of our board of directors is to retain earnings, if any, for operations and growth. Upon liquidation, dissolution or winding-up, the holders of our common stock are entitled to share ratably in all assets that are legally available for distribution. The holders of our common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of any series of preferred stock, which may be designated solely by action of our board of directors and issued in the future.

Preferred Stock

Our board of directors is authorized, subject to any limitations prescribed by law, without further vote or action by our stockholders, to issue from time to time shares of preferred stock in one or more series. The directors may from time to time by resolution passed before the issue of any preferred stock of any particular series, alter our Articles of Continuance to fix the number of shares of preferred stock of any particular series, alter our Articles of Continuance to fix the number of shares of preferred stock in, and to determine the designation of the shares of preferred stock of, that series and alter our Articles of Continuance to create, define and attach special rights and restrictions to the shares of preferred stock of that series including, but without in any way limiting or restricting the generality of the foregoing: the rate or amount of dividends, whether cumulative, non-cumulative or partially cumulative; the dates, places and currencies of payment thereof; the consideration for, and the terms and conditions of, any purchase for cancellation or redemption thereof, including redemption after a fixed term or at a premium; conversion or exchange rights or rights of retraction (provided that any such conversion or exchange rights or rights of retraction shall be in accordance with the provisions existing at the time of creation of such series relating to conversion, exchange, or retraction as prescribed by the policies of any stock exchange on which our shares are then listed); the terms and conditions of any share purchase plan or sinking fund; and voting rights and restrictions.

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Holders of preferred stock will be entitled, on the distribution of our assets or in the event of our liquidation, dissolution or winding-up, whether voluntary or involuntary, or on any other distribution of our assets among our stockholders for the purpose of winding-up our affairs, to receive before any distribution to be made to holders of common stock or any other shares of stock ranking junior to the preferred stock with respect to repayment of capital, the amount due to the holders of preferred stock in accordance with our Articles of Continuance with respect to each share of preferred stock held by them, together with all accrued and unpaid cumulative dividends, (if any and if preferential) thereon, and all declared and unpaid non-cumulative dividends (if any and if preferential) thereon.

Except for voting rights that may be attached to any series of the preferred stock by the directors, holders of preferred stock will not be entitled to vote at any meeting of our stockholders. Holders of preferred stock will be given notice of and be invited to attend meetings of our voting stockholders.

It is not possible to state the actual effect of the issuance of any shares of preferred stock upon the rights of holders of our common stock until the board of directors determines the specific rights of the holders of our preferred stock. However, the effects might include, among other things:

● impairing dividend rights of our common stock;

● diluting the voting power of our common stock;

● impairing the liquidation rights of our common stock; and

● delaying or preventing a change of control without further action by our stockholders.

Warrants

As of November 20, 2014, we have warrants issued and outstanding for the purchase of up to 1,693,887 shares of our common stock, at an exercise price of $0.53. The warrants are held by 26 security holders.

Options

As of November 20, 2014, we have options issued and outstanding for the purchase of up to 2,294,534 shares of our common stock, at exercise prices ranging from $0.60 to $1.24.

Transfer Agent

Our transfer agent is Computershare Inc., 250 Royall Street, Canton, Massachusetts 02021.

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Indemnification of Directors and Officers

Viveve Medical, Inc.

The Yukon Business Corporation Act (the “Business Corporations Act”), Section 126, enables a corporation to indemnify a director or officer or a former director or officer of the corporation, or a person who acts or acted at the corporation’s request as a director or officer of a body corporate of which the corporation is or was a stockholder or creditor, and his heirs and personal representatives (collectively, a “Person”), against all costs, charges and expenses, including an amount paid to settle an action or to satisfy a judgment reasonably incurred by him in any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been such a director or officer if:

(a)     he acted honestly and in good faith with a view to the best interests of the corporation; and

(b)     in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful.

The Business Corporations Act also enables a corporation, with the approval of the Supreme Court of the Yukon Territory, to indemnify a Person in respect of an action by or on behalf of the corporation or body corporate to procure a judgment in its favor, to which he is made a party by reason of being or having been a director or officer of the corporation or body corporate, against all costs, charges and expenses reasonably incurred by him in connection with the action if he fulfills the conditions set forth in subparagraphs (a) and (b) above. Furthermore, the Business Corporation Act provides that a Person is entitled to indemnity from the corporation in respect of all costs, charges and expenses reasonably incurred by him in connection with the defense of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the corporation or body corporate if the person seeking indemnification:

(a)     fulfills the conditions set forth in subparagraphs (a) and (b) above;

(b)     was substantially successful on the merits in his defense of the action or proceeding; and

(c)     is fairly and reasonably entitled to indemnity.

The Business Corporations Act also provides that a corporation may purchase and maintain insurance for the benefit of a Person against liability incurred by him:

(a)     in his capacity as a director or officer of the corporation, except when the liability relates to his failure to act honestly and in good faith with a view to the best interests of the corporation; or

(b)     in his capacity as a director or officer of another body corporate if he acts or acted in that capacity at the corporation’s request, except where the liability relates to his failure to act honestly and in good faith with a view to the best interests of the body corporate.

Our bylaws provide that none of our directors shall be liable for the acts, receipts, neglects or defaults of any other director or officer or employee, or for joining in any receipt or other act for conformity, or for any loss, damage or expense happening to us through the insufficiency or deficiency of title to any property acquired for or on behalf of us, or for the insufficiency or deficiency of any security in or upon which any of our moneys shall be invested, or for any loss or damage arising from the bankruptcy, insolvency or tortuous acts of any person with whom any of the our moneys, securities or effects are deposited, or for any loss occasioned by any error of judgment or oversight on his or her part, or for any other loss, damage or misfortune whatever which shall happen in the execution of the duties of his or her office or in relation thereto, unless the same are occasioned by his or her own willful neglect or default or from any breach of his or her duty to act in accordance with the Business Corporations Act and the regulations thereunder.

Our bylaws provide that, subject to the limitations contained in the Business Corporations Act, and to the extent he or she is otherwise fairly and reasonably entitled thereto, we shall indemnify a director or officer, a former director or officer, or a person who acts or acted our request as a director or officer of a body corporate of which we are or were a shareholder or creditor (or a person who undertakes or has undertaken any liability on behalf of us or any such body corporate) and his or her heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him or her in respect of any civil, criminal or administrative action or proceeding to which he or she is made a party by reason of being or having been our director or officer or such body corporate, if

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(1)     he or she acted honestly and in good faith with a view to our best interests; and

(2)     in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he or she had reasonable grounds for believing that his or her conduct was lawful.

Furthermore, our bylaws provide that directors may rely upon the accuracy of any statement of fact represented by an officer of the Company to be correct or upon statements in a written report of the Company’s auditor and shall not be responsible or held liable for any loss or damage resulting from the paying of any dividends or otherwise acting in good faith upon any such statement.

Our bylaws also provide that subject to the limitations contained in the Business Corporations Act, we may purchase and maintain insurance for the benefit of our directors and officers as the board of directors may from time to time determine. We have obtained on behalf of our directors and officers insurance protection against certain liabilities arising out of the discharge of their duties. However, to the extent such coverage is inadequate to cover claims against directors or officers, we may be required pursuant to our bylaws to reimburse the directors or officers for the uninsured portion of such claims.

Viveve, Inc.

Section 145 of the General Corporation Law of the State of Delaware (the “DGCL”) permits a Delaware corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful.

In the case of an action by or in the right of the corporation, Section 145 of the DGCL permits a Delaware corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses that the Court of Chancery or such other court shall deem proper.

Section 145 of the DGCL also permits a Delaware corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under Section 145 of the DGCL.

Disclosure of Commission Position on Indemnification for Securities Act Liabilities

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

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Anti-Takeover Effect of Certain Charter Provisions

Our charter documents include provisions that may have the effect of discouraging, delaying or preventing a change in control or an unsolicited acquisition proposal that a stockholder might consider favorable, including a proposal that might result in the payment of a premium over the market price for the shares held by our stockholders. Certain of these provisions are summarized in the following paragraphs.

Effects of authorized but unissued common stock and blank check preferred stock. One of the effects of the existence of authorized but unissued common stock and undesignated preferred stock may be to enable our board of directors to make more difficult or to discourage an attempt to obtain control of our Company by means of a merger, tender offer, proxy contest or otherwise, and thereby to protect the continuity of management. If, in the due exercise of its fiduciary obligations, the board of directors were to determine that a takeover proposal was not in our best interest, such shares could be issued by the board of directors without stockholder approval in one or more transactions that might prevent or render more difficult or costly the completion of the takeover transaction by diluting the voting or other rights of the proposed acquirer or insurgent stockholder group, by putting a substantial voting block in institutional or other hands that might undertake to support the position of the incumbent board of directors, by effecting an acquisition that might complicate or preclude the takeover, or otherwise.

In addition, our Articles of Continuance grant our board of directors broad power to establish the rights and preferences of authorized and unissued shares of preferred stock. The issuance of shares of preferred stock could decrease the amount of earnings and assets available for distribution to holders of shares of common stock. The issuance also may adversely affect the rights and powers, including voting rights, of those holders and may have the effect of delaying, deterring or preventing a change in control of our Company.

Authority to call a special meeting of stockholders. Section 4.04 of our bylaws states that our stockholders may, by ordinary resolution passed at a special meeting, remove any director from office and the vacancy created by such removal may be filled at the same meeting. However, a special meeting of stockholders may only be called by the board of directors. This provision prevents stockholders from calling a special meeting to remove directors.

LEGAL MATTERS

Richardson & Patel LLP, with an office at 1100 Glendon Avenue, Suite 850, Los Angeles, CA 90024 will pass upon the validity of the shares of common stock offered by this prospectus.

EXPERTS

The financial statements of Viveve, Inc. as of December 31, 2012 and 2013, for each of the two years in the period ended December 31, 2013 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2013 included in this prospectus have been so included in reliance on the report (which contains an explanatory paragraph relating to the Company’s ability to continue as a going concern as described in Note 1 to the financial statements) of Burr Pilger Mayer, Inc., an independent registered public accounting firm, given the authority of such firm as experts in auditing and accounting.

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VIVEVE MEDICAL, INC.

INDEX TO FINANCIAL STATEMENTS

Consolidated Financial Statement of Viveve Medical, Inc. as of September 30, 2014
	Page
Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013	F-2
Condensed Consolidated Statements of Operations for three and nine months ended September 30, 2014 and 2013 (unaudited)	F-3
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013 (unaudited)	F-4
Notes to Condensed Consolidated Financial Statements (unaudited)	F-5-F-24
Financial Statements of Viveve, Inc. as of December 31, 2013 and 2012
Independent Auditors’ Report	F-25 - F-26
Balance Sheets - December 31, 2013 and 2012	F-27
Statements of Operations for the years ended December 31, 2013 and 2012	F-28
Statements of Stockholder’s Equity (Deficit) for the years ended December 31, 2013 and 2012	F-29 - F-30
Consolidated Statements of Cash Flows for the years ended December 31, 2013 and 2012	F-31 - F-32
Notes to Consolidated Financial Statements	F-33 - F-60

F-1

VIVEVE MEDICAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

____________

	September 30, 2014			December 31, 2013
	(unaudited)			(1)
ASSETS
Current assets:
Cash and cash equivalents	$	1,976,980		$	430,107
Accounts receivable		3,750			-
Inventory		136,902			228,163
Prepaids and other current assets		188,006			308,183
Total current assets		2,305,638			966,453
Property and equipment, net		191,663			127,524
Other assets		652,045			43,783
Total assets	$	3,149,346		$	1,137,760
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	566,059		$	967,315
Accrued liabilities		387,538			516,152
Note payable		1,471,799			1,463,244
Related party convertible bridge notes		-			4,875,000
Total current liabilities		2,425,396			7,821,711
Preferred stock warrant liabilities		-			623,672
Total liabilities		2,425,396			8,445,383
Commitments and contingences (Note 7)
Stockholders’ equity (deficit):
Series A convertible preferred stock, $0.001 par value; 0 and 24,543,626 shares authorized as of September 30, 2014 and December 31, 2013; 0 and 23,863,302 shares issued and outstanding as of September 30, 2014 and December 31, 2013, respectively (Liquidation value of $14,556,614 as of December 31, 2013)		-			23,863
Series B convertible preferred stock, $0.001 par value; 0 and 227,000,000 shares authorized as of September 30, 2014 and December 31, 2013; 0 and 171,199,348 shares issued and outstanding as of September 30, 2014 and December 31, 2013, respectively (Liquidation value of $8,559,967 as of December 31, 2013)		-			171,199
Preferred stock, no par value; unlimited shares authorized; 0 shares issued and outstanding as of September 30, 2014 and December 31, 2013		-			-
Common stock, $0.001 par value; 612,000,000 shares authorized as of December 31, 2013; 0 and 6,555,305 shares issued and outstanding as of September 30, 2014 and December 31, 2013, respectively		-			6,556
Common stock and paid-in capital, no par value; unlimited shares authorized; 18,016,662 and 0 shares issued and outstanding as of September 30, 2014 and December 31, 2013, respectively		35,066,274			-
Additional paid-in capital		-			22,395,684
Accumulated deficit		(34,342,324	)		(29,904,925	)
Total stockholders’ equity (deficit)		723,950			(7,307,623	)
Total liabilities and stockholders’ equity (deficit)	$	3,149,346		$	1,137,760

(1) The balance sheet as of December 31, 2013 has been derived from the audited financial statements as of that date.

F-2

 VIVEVE MEDICAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

____________

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Revenue	$	17,180		$	4,610		$	64,475		$	147,660
Cost of revenue		14,724			1,493			40,075			110,528
Gross profit		2,456			3,117			24,400			37,132
Operating expenses:
Research and development		572,134			177,203			940,954			628,545
Selling, general and administrative		1,790,014			532,369			3,085,580			2,517,791
Total operating expenses		2,362,148			709,572			4,026,534			3,146,336
Loss from operations		(2,359,692	)		(706,455	)		(4,002,134	)		(3,109,204	)
Interest income		2			2			5			5
Interest expense		(152,296	)		(156,727	)		(486,582	)		(334,380	)
Other income (expense), net		7,827			(8,713	)		51,312			11,230
Net loss	$	(2,504,159	)	$	(871,893	)	$	(4,437,399	)	$	(3,432,349	)
Net loss per share:
Basic and diluted	$	(0.52	)	$	(0.23	)	$	(1.08	)	$	(0.92	)
Weighted average shares used in computing net loss per common share
Basic and diluted		4,829,300			3,743,282			4,109,266			3,743,282

F-3

VIVEVE MEDICAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Nine Months Ended September 30,
	2014			2013
Cash flows from operating activities:
Net loss	$	(4,437,399	)	$	(3,432,349	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		42,220			35,871
Stock-based compensation expense		143,643			66,001
Revaluation of fair value of warrant liability		(50,762	)		(11,230	)
Noncash interest expense		369,677			227,911
Changes in assets and liabilities:
Accounts receivable		(3,750	)		849
Inventory		91,261			(574	)
Prepaid and other current assets		120,177			(209,711	)
Other noncurrent assets		13,908			13,908
Accounts payable		(401,256	)		439,849
Accrued liabilities		61,293			(80,357	)
Net cash used in operating activities		(4,050,988	)		(2,949,832	)
Cash flows from investing activities:
Purchase of property and equipment		(106,359	)		(4,214	)
Net cash used in investing activities		(106,359	)		(4,214	)
Cash flows from financing activities:
Net cash proceeds from issuance of common stock in connection with private placement offering		4,204,220			-
Proceeds from related party convertible bridge notes		1,500,000			3,000,000
Repayments of notes payable		-			(134,814	)
Net cash provided by financing activities		5,704,220			2,865,186
Net increase (decrease) in cash and cash equivalents		1,546,873			(88,860	)
Cash and cash equivalents - beginning of period		430,107			448,754
Cash and cash equivalents - end of period	$	1,976,980		$	359,894
Supplemental disclosure:
Cash paid for interest	$	116,905		$	106,469
Cash paid for income taxes	$	800		$	800
Supplemental disclosure of cash flow information as of end of period:
Conversion of certain bridge notes and related accrued interest in connection with private placement offering	$	1,545,678		$	-
Extinguishment of convertible bridge notes and related accrued interest pursuant to Merger Agreement	$	5,397,278		$	-
Extinguishment of warrant liabilities pursuant to Merger Agreement	$	572,910		$	-
Issuance of warrants in connection with note payable	$	622,170		$	-
Payable to non-accredited investors in connection with Merger Agreement	$	16,498

F-4

VIVEVE MEDICAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. The Company and Basis of Presentation

On September 23, 2014, PLC Systems, Inc., a Yukon Territory corporation (“PLC”) completed an Agreement and Plan of Merger (“Merger Agreement” or “Merger”) with Viveve®, Inc., a Delaware corportation (“Viveve”). As of that date, Viveve operates as a wholly-owned subsidiary of PLC and PLC is known as Viveve Medical, Inc. (“Viveve Medical”, the “Company”, “we”, “our”, or “us”). Viveve Medical will compete in the women’s health market with a focus on the Viveve System™ to improve women’s overall sexual well-being and quality of life, will retain all its personnel and continue to be headquartered in Sunnyvale, California.

At the effective time of the Merger, PLC divested its ownership of its former operating subsidiaries, PLC Medical Systems, Inc. and PLC Systemas Medicos Internacionais, which will operate as independent entities going forward under new ownership.

In preparation for the stock exchange pursuant to the Merger, Viveve convertible bridge notes in the aggregate amount of $4,875,000 and related accrued interest of approximately $522,000 were extinguished.  

Additionally, Viveve warrant liabilities of approximately $573,000 were extinguished in preparation of the stock exchange pursuant to the Merger.

Pursuant to the Merger Agreement, all shares of capital stock (including common and preferred stock) of Viveve were converted into 3,743,282 shares of the Company's common stock which represented approximately 62% of the issued and outstanding shares of common stock of the Company on a fully diluted basis. In addition, non-accredited investors were entitled to receive approximately $16,500 upon closing. Upon the closing of the Merger, the Company issued an additional 943,596 shares of common stock upon the automatic conversion of a warrant issued in exchange for the cancellation of related party convertible bridge notes.

The acquisition was accounted for as a reverse merger and recapitalization effected by a share exchange. Viveve is considered the acquirer for accounting and financial reporting purposes. The assets and liabilities of the acquired entity have been brought forward at their book value and no goodwill has been recognized. 

Concurrent with the Merger, Viveve Medical completed a private placement for total gross proceeds of approximately $6 million (including approximately $1.5 million of convertible bridge note conversion). As a result, Viveve Medical issued 11,305,567 shares of common stock and 5-year warrants to purchase up to 940,189 shares of common stock at an exercise price of $0.53 per share.

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  (“US GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US 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 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 proxy statement which was filed with the Securities and Exchange Commission on August 11, 2014. The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results for the year ending December 31, 2014 or any future interim period.

2. Summary of Significant Accounting Policies

Financial Statement Presentation

The condensed consolidated financial statements include the accounts of the Company and our wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with US GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and the related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. In addition, any change in these estimates or their related assumptions could have an adverse effect on our operating results.

F-5

Reclassifications

Certain prior year financial statement amounts have been reclassified to conform to the current year’s presentation. These reclassifications had no impact on previously reported total assets, stockholders’ deficit or net loss.

Revenue Recognition

The Company recognizes revenue from the sale of its product, the Viveve® System, and single-use treatment tips. Revenue is recognized upon delivery, provided that persuasive evidence of an arrangement exists, the price is fixed or determinable and collection of the resulting receivable is reasonably assured. Sales of Viveve’s products are subject to regulatory requirements that vary from country to country. The Company has regulatory clearance outside the U.S. and currently sells the Viveve System in Canada, Hong Kong and Japan.

The Company does not provide its customers with a contractual right of return.

Recently Issued and Adopted Accounting Standards

In May 2014, as part of its ongoing efforts to assist in the convergence of US GAAP and International Financial Reporting Standards (“IFRS”), the Financial Accounting Standards Board (“FASB”)  issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606).” The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The ASU provides alternative methods of initial adoption and is effective for annual and interim periods beginning after December 15, 2016. We are currently evaluating the impact that this standard will have on our condensed consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12, “Compensation — Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved After a Requisite Service Period” (“ASU 2014-12”). Companies commonly issue share-based payment awards that require a specific performance target to be achieved in order for employees to become eligible to vest in the awards. ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period should be treated as a performance condition. The performance target should not be reflected in estimating the grant date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved. ASU 2014-12 will be effective for the Company’s fiscal years beginning fiscal 2016 and interim reporting periods within that year, using either the retrospective or prospective transition method. Early adoption is permitted. We are currently evaluating the effect of the adoption of this guidance on our condensed consolidated financial statements.

In June 2014, the FASB issued ASU 2014-10,  “Development Stage Entities (Topic 915):  Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in topic 810, Consolidation” (“ASU 2014-10”). ASU 2014-10 removes the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. ASU 2014-10 also eliminates the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. The amendments in ASU 2014-10 will be effective retrospectively except for the clarification to Topic 275, which shall be applied prospectively for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued. We elected to early adopt the provisions of ASU 2014-10 in the second quarter of 2014.

F-6

In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 310-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”), to provide guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Since ASU 2014-15 only impacts financial statement disclosure requirements regarding whether there is  substantial doubt about an entity’s ability to continue as a going concern, we do not expect its adoption to have an impact on our ccondensed onsolidated financial statements.

Concentration of Credit Risk and Other Risks and Uncertainties

To achieve profitable operations, the Company must successfully develop, manufacture, and market its products. There can be no assurance that any such products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products will be successfully marketed. These factors could have a material adverse effect upon the Company’s financial results, financial position, and future cash flows.

The Company’s future products may require approval from the U.S. Food and Drug Administration or other international regulatory agencies prior to commencing commercial sales. There can be no assurance that the Company’s future products will receive any of these required approvals. If the Company was denied such approvals or such approvals were delayed, it would have a material adverse impact on the Company’s financial results, financial position and future cash flows.

The Company is subject to risks common to companies in the medical device industry including, but not limited to, new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, uncertainty of market acceptance of products, product liability, and the need to obtain additional financing. The Company’s ultimate success is dependent upon its ability to raise additional capital and to successfully develop and market its products.

During the nine months ended September 30, 2014, three customers accounted for 94% of the Company’s revenue.

During the nine months ended September 30, 2013, one customer accounted for 100% of the Company’s revenue.

During the three months ended September 30, 2014, two customers accounted for 79% of the Company’s revenue.

During the three months ended September 30, 2013, one customer accounted for 100% of the Company’s revenue.

Sales outside the U.S. accounted for 100% of the Company's revenue for all periods presented.

Inventory

Inventory is stated at the lower of cost or market, cost being determined on an actual cost basis on a first-in, first-out basis and market being determined as the lower of replacement cost or net realizable value.

Product Warranty

The Company’s products are generally subject to a one year warranty, which provides for the repair, rework or replacement of products (at its option) that fail to perform within stated specification. The Company has assessed the historical claims and, to date, product warranty claims have not been significant. The Company will continue to assess if there should be a warranty accrual.

Comprehensive Loss

Comprehensive loss represents the changes in equity of an enterprise, except those resulting from stockholder transactions. Accordingly, comprehensive loss may include certain changes in equity that are excluded from net loss. For the three and nine months ended September 31, 2014 and 2013, the Company’s comprehensive loss is the same as its net loss. There were no components of comprehensive loss for any of the periods presented.

F-7

Net Loss per Share Attributable to Common Stockholders

The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding for the period. The diluted net loss per share attributable to common stockholders is computed by giving effect to all potentially dilutive common stock equivalents outstanding for the period. For purposes of this calculation, options and warrants to purchase common stock are considered common stock equivalents. For periods in which the Company has reported net losses, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Potential common shares will always be anti-dilutive for periods in which the Company has reported a net loss. Diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders for the three and nine months ended September 30, 2014 and 2013.

For the three and nine months ended September 30, 2014 and 2013, the following weighted average common stock equivalent shares were excluded from the calculation of net loss per share because the inclusion would be anti-dilutive.

F-8

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Stock options to purchase common stock		476,671		409,488		445,804		491,609
Warrants to purchase common stock		72,322		-		24,107		-
		548,993		409,488		469,911		491,609

3. Fair Value Measurements

The Company recognizes and discloses the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). Each level of input has different levels of subjectivity and difficulty involved in determining fair value.

Level 1 Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date. Therefore, determining fair value for Level 1 investments generally does not require significant judgment, and the estimation is not difficult.

Level 2 Pricing is provided by third party sources of market information obtained through investment advisors. The Company does not adjust for or apply any additional assumptions or estimates to the pricing information received from its advisors.

Level 3 Inputs used to measure fair value are unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. The determination of fair value for Level 3 instruments involves the most management judgment and subjectivity.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

The Company’s Level 1 financial asset is a money market fund with a fair value that is based on quoted market prices. The money market fund is included in cash and cash equivalents on the Company’s condensed consolidated balance sheet. The Company’s Level 3 liability consists of convertible preferred stock warrant liabilities. The valuation of the warrant liabilities is discussed in Note 8.

For the period ended September 30, 2014, the Company did not have any transfers between Level 1, Level 2 and Level 3.

F-9

The following tables set forth the Company’s financial instruments that were measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013 by level within the fair value hierarchy:

	Assets and Liabilities at Fair Value as of September 30, 2014
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
	Level 1		Level 2		Level 3		Total
Assets
Money market fund	$	190	$	-	$	-	$	190
Total assets	$	190	$	-	$	-	$	190
Liabilities
Preferred stock warrant liabilities	$	-	$	-	$	-	$	-
Total liabilities	$	-	$	-	$	-	$	-

	Assets and Liabilities at Fair Value as of December 31, 2013
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
	Level 1		Level 2		Level 3		Total
Assets
Money market fund	$	324	$	-	$	-	$	324
Total assets	$	324	$	-	$	-	$	324
Liabilities
Preferred stock warrant liabilities	$	-	$	-	$	623,672	$	623,672
Total liabilities	$	-	$	-	$	623,672	$	623,672

The change in the fair value of the preferred stock warrant liabilities is summarized below:

Fair value as of December 31, 2013	$	623,672
Change in fair value recorded in other income (expense), net		(21,484	)
Fair value as of March 31, 2014		602,188
Change in fair value recorded in other income (expense), net		(22,001	)
Fair value as of June 30, 2014		580,187
Change in fair value recorded in other income (expense), net, as of September 23, 2014, date of the Merger Agreement		(7,277	)
Extinguishment of warrant liabilities pursuant to the Merger Agreement (reclassified to equity)		(572,910	)
Fair value as of September 30, 2014	$	-

F-10

All assets and liabilities carried at fair value have been valued using a market approach, except for Level 3. The following table describes the valuation techniques used to calculate fair value for Level 3 liabilities. For Level 3 liabilities, the Company determines the fair value measurement valuation policies and procedures. Annually, the Board of Directors assess and approve the fair value measurement policies and procedures. At least annually, the Company determines if the current valuation techniques used in the fair value measurements are still appropriate and evaluates and adjusts the unobservable inputs used in the fair value measurements based on current market conditions and third-party information.

	Fair Value as of		Valuation	Unobservable	Range
	December 31, 2013		Techniques	Input	(Weighted-Average)
Preferred stock warrant liabilities	$	623,672	Black-Scholes	Preferred series
			option pricing model	prices		$0.04-$0.44 ($0.06)
				Volatility		70.62%-84.23% (76%)

There were no changes in valuation technique from prior periods.

4. Accrued Liabilities

Accrued liabilities consisted of the following as of September 30, 2014 and December 31, 2013:

	September 30,		December 31,
	2014		2013
Accrued interest	$	13,792	$	235,603
Accrued professional fees		125,671		15,000
Accrued loan balloon payment		85,000		76,472
Accrued vacation		73,809		81,499
Accrued loan restructuring fees		47,500		27,288
Accrued severence pay		-		58,846
Other accruals		41,766		21,444
Total accrued liabilities	$	387,538	$	516,152

5. Note Payable

In April 2012, the Company entered into a loan and security agreement for up to $2,135,159 in term loans that were used to pay off the existing loan with a financial institution. The full amount was drawn down in April 2012. In connection with the agreement, the Company issued a warrant to the lender to purchase a total of 73,770 shares of the Company’s Series A convertible preferred stock at $0.61 per share (Note 9). The borrowings were repayable in interest only payments until May 1, 2012 and then 30 equal installments of principal and interest at a rate of 9.5% per annum. An additional 4% of the principal or approximately $85,000 will be due as the final payment at the end of the loan term. The Company recorded $8,528 and $28,785 as additional interest expense during the nine months ended September 30, 2014 and 2013, respectively, related to the $85,000 payment. The Company will continue to accrue the balance of the $85,000 cash payment over the remaining term of the loan using the effective interest rate method. As of September 30, 2014 and December 31, 2013, $85,000 and $76,472 was recorded in accrued liabilities on the condensed consolidated balance sheets relating to this payment. All borrowings under the agreement are collateralized by substantially all of the Company’s assets, including intellectual property. As of September 30, 2014 and December 31, 2013, the note payable had an outstanding balance of $1,471,799 and $1,462,244, respectively. The term loan has a maturity date of October 1, 2014 and was repaid on that date as discussed in Note 13.

In February 2013, the Company and lender amended the loan and security agreement to defer up to 3 months of principal payments contingent upon the receipt of bridge loan proceeds in increments of $500,000, up to $1,500,000 on or before April 30, 2013, beginning March 1, 2013. This amendment also included a $15,000 restructuring fee that would be due upon the maturity date of the loan.

F-11

In May 2013, the Company and lender amended the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more, on or before September 30, 2013. The principal payments were to be deferred and payable on August 1, 2013. This amendment also included a $10,000 restructuring fee that would be due upon the maturity date of the loan.

In July 2013, the Company and lender agreed to further amend the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more, on or before August 28, 2013, and an additional month deferral provided a 2013 equity event was completed resulting in net cash proceeds of not less than $10 million from the sale of the Company’s equity securities consummated by September 27, 2013. Principal payments would be deferred and payable on October 1, 2013, provided both of these conditions were met. This amendment also included a $10,000 restructuring fee that would be due upon the maturity date of the loan.

In September 2013, the Company and lender agreed to further amend the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more on or before August 28, 2013 and another $500,000 or more on or before October 28, 2013. Principal payments would be deferred until December 1, 2013. This amendment also included a $10,000 restructuring fee that would be due upon the maturity date of the loan.

In November 2013, the Company and lender agreed to further amend the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more on or before December 27, 2013 and upon the consummation of a 2014 equity event requiring the receipt of not less than $7 million in net cash proceeds by no later than January 24, 2014. Principal payments would be deferred until February 1, 2014. This amendment also included a $10,000 restructuring fee that would be due upon the maturity date of the loan.

In January 2014, the Company and lender agreed to further amend the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more on or before February 25, 2014 and consummation of an equity event by April 25, 2014. This amendment included an additional $5,000 restructuring fee for each month principal payments are deferred beginning February 1, 2014 through April 1, 2014, provided restructuring fees in this amendment shall not exceed $15,000 in total that would also be due upon the maturity date of the loan.

In February 2014, the Company and lender agreed to further amend the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more on or before April 25, 2014 and consummation of an equity event by June 27, 2014. This amendment included an additional $5,000 restructuring fee for each month principal payments are deferred beginning March 1, 2014 through June 1, 2014, provided restructuring fees in this amendment shall not exceed $20,000. This amendment also amended the January 2014 restructuring fee such that the January 2014 restructuring fee shall not exceed $5,000 in total that would also be due upon the maturity date of the loan.

In June 2014, the Company and lender agreed to further amend the loan and security agreement such that the remaining 3 months of principal payments would be deferred until the maturity date of the term loan when all unpaid principal and interest will be immediately due. This amendment also includes an additional $5,000 restructuring fee for each month principal payments are deferred beginning July 1, 2014 through September 1, 2014, provided restructuring fees in this amendment do not exceed $15,000 in total that would also be due upon the maturity date of the loan.

In September 2014, the lender agreed to reduce the total restructuring fees to $47,500. The Company recorded $20,212, net of the reduction in fees, and $45,000 as additional interest expense during the nine months ended September 30, 2014 and 2013, respectively, related to these restructuring fees. The Company has been accruing the balance of the cash restructuring payment over the term of the loan using the effective interest rate method. As of September 30, 2014 and December 31, 2013, $47,500 and $27,288 was recorded as an accrued liability on the condensed consolidated balance sheets relating to this restructuring payment.

The loan and security agreement contains a material adverse change clause, as defined in the agreement, which would result in an event of default if the lender deems a material adverse change to have occurred to the Company’s business. The continuing liquidity issues the Company faces could be construed by the note holder as a material adverse change which could trigger an acceleration of all of the outstanding debt. As such, the Company has classified all of its outstanding debt balance as a current liability as of September 30, 2014 and December 31, 2013.

F-12

As of September 30, 2014, future minimum payments under the note payable are as follows:

Year Ending December 31, 2014	$	1,618,091
		1,618,091
Less: Amount representing interest		(146,292	)
Present value of obligations		1,471,799
Less: Unamortized debt discount		-
		1,471,799
Less: Notes payable, current portion		1,471,799
Notes payable, noncurrent portion	$	-

On September 30, 2014, the Company entered into a Loan and Security Agreement pursuant to which we received a term loan in the amount of $5 million, which will be funded in three tranches. The first tranche of $2.5 million was provided to the Company on October 1, 2014. The proceeds from the first tranche were used to repay the existing loan (including interest and restructuring fees) with a financial institution which totaled $1,630,925. Before the second and third tranches of the term loan will be funded, we must meet certain enrollment milestones and achieve certain positive results relating to our OUS Clinical Trials, among other things. In connection with the loan agreement, the Company issued a 10-year warrant to the lender for the purchase of 471,698 shares of the Company’s common stock at $0.53 per share (Note 8).

6. Related Party Convertible Bridge Notes

In November 2012, the Company issued $1,000,000 in convertible promissory notes to related parties. The notes accrue interest at 8% per annum and mature at the earlier of i) the date upon which the majority note holders demand repayment after May 15, 2013 or ii) the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000. As of September 30, 2014 and December 31, 2013, the outstanding principal balance was $0 and $1,000,000. Because the holders had the ability to demand repayment after May 15, 2013, the Company classified all of the outstanding debt balance and related accrued interest of $88,986 as a current liability as of December 31, 2013. In connection with the Merger, these convertible promissory notes were extinguished.

On February 13, 2013, the Company entered into a note purchase agreement (“2013 Note Purchase Agreement”) with related parties to which it was authorized to issue and sell convertible promissory notes up to $1,500,000 in the aggregate, of which $1,000,000 was issued. These notes were intended as bridge financing to a planned alternative public offering in the second quarter of 2013. The notes accrue interest at 8% per annum and mature at the earlier of the date upon which the majority note holders demand repayment after August 13, 2013 or the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000 excluding the conversion of these notes and the November 2012 notes. The notes convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which is defined as 80% of the purchase price in the qualified financing. If the Company does not execute a qualified financing, the holders may elect conversion of the notes prior to the maturity date of August 13, 2013. Under the elective conversion, the notes convert into the number of the next equity financing shares or shares of Series B convertible preferred stock that are equal to the principal and the unpaid accrued interest divided by the conversion price. The conversion price is defined as 80% of the price paid by the investors in the next equity financing series or $0.05, if the notes are converted into the Series B convertible preferred stock. In April 2013, the Company completed another closing of the 2013 Note Purchase Agreement for $500,000. On June 3, 2013, the Company entered into an amendment to the 2013 Note Purchase Agreement to increase the total amount of the convertible promissory notes up to $2,000,000 in the aggregate if issued before June 30, 2013. In June 2013, the Company completed another closing of the 2013 Note Purchase Agreement for $500,000. On August 7, 2013, the Company entered into an amendment to the 2013 Note Purchase Agreement to increase the total amount of the convertible promissory notes up to $2,500,000 in the aggregate if issued before August 28, 2013. In August 2013, the Company completed another closing of the 2013 Note Purchase Agreement for $500,000. As of September 30, 2014 and December 31, 2013, the outstanding principal balance was $0 and $2,500,000. Because the holders had the ability to demand repayment after August 13, 2013, the Company classified all of the outstanding debt balance and related accrued interest of $130,466 as a current liability as of December 31, 2013. In connection with the Merger, these convertible promissory notes were extinguished.

F-13

On September 27, 2013, the Company entered into a note purchase agreement (“September 2013 Note Purchase Agreement”) with related parties to which it was authorized to issue and sell convertible promissory notes up to $500,000 in the aggregate. These notes were intended as bridge financing to a planned APO in the third quarter of 2013. The notes accrue interest at 8% per annum and mature at the earlier of the date upon which the majority note holders demand repayment after March 31, 2014 or the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000 excluding the conversion of these notes, the November 2012 notes and the 2013 Note Purchase Agreement. The notes convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which is defined as 70% of the purchase price in the qualified financing. If the Company does not execute a qualified financing, the holders may elect conversion of the notes prior to the maturity date of March 31, 2014. Under the elective conversion, the notes convert into the number of the next equity financing shares or shares of Series B convertible preferred stock that are equal to the principal and the unpaid accrued interest divided by the conversion price. The conversion price is defined as 70% of the price paid by the investors in the next equity financing series or $0.05, if the notes are converted into the Series B convertible preferred stock. As of September 30, 2014 and December 31, 2013, the outstanding principal balance was $0 and $500,000. Because the holders had the ability to demand repayment after March 31, 2014, the Company classified all of the outstanding debt balance and related accrued interest of $10,411 as a current liability as of December 31, 2013. In connection with the Merger, these convertible promissory notes were extinguished.

On November 12, 2013, the Company entered into a note purchase agreement (“November 2013 Note Purchase Agreement”) with related parties to which it was authorized to issue and sell convertible promissory notes up to $500,000 in the aggregate. These notes were intended as bridge financing to a planned APO in the fourth quarter of 2013. The notes accrue interest at 8% per annum and mature at the earlier of the date upon which the majority note holders demand repayment after March 31, 2014 or the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000 excluding the conversion of these notes, the November 2012 notes and the 2013 Note Purchase Agreement. The notes convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which is defined as 70% of the purchase price in the qualified financing. If the Company does not execute a qualified financing, the holders may elect conversion of the notes prior to the maturity date of March 31, 2014. Under the elective conversion, the notes convert into the number of the next equity financing shares or shares of Series B convertible preferred stock that are equal to the principal and the unpaid accrued interest divided by the conversion price. The conversion price is defined as 70% of the price paid by the investors in the next equity financing series or $0.05, if the notes are converted into the Series B convertible preferred stock. As of September 30, 2014 and December 31, 2013, the outstanding principal balance was $0 and $500,000. Because the holders had the ability to demand repayment after March 31, 2014, the Company classified all of the outstanding debt balance and related accrued interest of $5,370 as a current liability as of December 31, 2013. In connection with the Merger, these convertible promissory notes were extinguished.

On December 27, 2013, the Company entered into a note purchase agreement (“December 2013 Note Purchase Agreement”) with related parties to which it was authorized to issue and sell convertible promissory notes up to $375,000 in the aggregate. These notes were intended as bridge financing to a planned APO in the first quarter of 2014. The notes accrue interest at 9% per annum and mature at the earlier of the date upon which the majority note holders demand repayment after March 31, 2014 or the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000 excluding the conversion of these notes, the November 2012 notes and the 2013 Note Purchase Agreement. The notes convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which is defined as 70% of the purchase price in the qualified financing. If the Company does not execute a qualified financing, the holders may elect conversion of the notes prior to the maturity date of March 31, 2014. Under the elective conversion, the notes convert into the number of the next equity financing shares or shares of Series B convertible preferred stock that are equal to the principal and the unpaid accrued interest divided by the conversion price. The conversion price is defined as 70% of the price paid by the investors in the next equity financing series or $0.05, if the notes are converted into the Series B convertible preferred stock. As of September 30, 2014 and December 31, 2013, the outstanding principal balance was $0 and $375,000. Because the holders had the ability to demand repayment after March 31, 2014, the Company classified all of the outstanding debt balance and related accrued interest of $370 as a current liability as of December 31, 2013. In connection with the Merger, these convertible promissory notes were extinguished.

On March 5, 2014, the Company entered into a note purchase agreement in which it was authorized to issue and sell up to $1,250,000 in aggregate principal amount of convertible promissory notes of which $200,000 was issued. In May 2014, the Company completed another sale of convertible promissory notes in the aggregate principal amount of $1,050,000. The notes accrued interest at 9% per annum and converted into common stock in connection with the private placement.

F-14

On July 7, 2014, the Company entered into a note purchase agreement in which it was authorized to issue convertible promissory notes up to $250,000 in the aggregate. The notes accrue interest at 9% per annum and converted into common stock in connection with the private placement.

Pursuant to the Company’s amendment to the note purchase agreement dated November 20, 2012, effective February 13, 2013, the above notes payable would be redeemable upon a change of control of the Company at an amount equal to 300% of the outstanding principal amount and accrued and unpaid interest on the notes as of the time of a change of control. A change of control will occur in the event the Company enters into a transaction where the holders of the voting securities no longer own a majority of the total outstanding voting securities once the transaction is completed or a disposition of substantially all assets occurs. The sale of stock for capital raising purposes or an alternative public offering involving a reverse merger into a public shell company for capital raising purposes is excluded from the Company’s definition of a change of control. The Company has determined that the value of this provision is not material and as such did not record a liability on the Company’s condensed consolidated financial statements as of December 31, 2013. All of these notes were extinguished as part of the Merger Agreement.

F-15

7. Commitments and Contingencies

Operating Lease

In January 2012, the Company relocated and entered into a lease agreement for a new facility. The new lease commenced in March 2012 and will terminate in February 2015. Rent expense for the nine months ended September 30, 2014 and 2013 was $128,359 and $128,359, respectively.

As of September 30, 2014, future minimum payments under the lease are as follows:

Year Ending December 31,
2014	$	46,428
2015		30,952
Total minimum lease payments	$	77,380

Indemnification Agreements

The Company enters into standard indemnification arrangements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with performance of services within the scope of the agreement, breach of the agreement by the Company, or noncompliance of regulations or laws by the Company, in all cases provided the indemnified party has not breached the agreement and/or the loss is not attributable to the indemnified party’s negligence or willful malfeasance. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these arrangements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the estimated fair value of these agreements is minimal.

Contingencies

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

8. Common Stock

In connection with the Merger, all shares of Viveve Series A convertible preferred stock and Series B convertible preferred stock were converted to common stock and the Company exchanged shares of common stock with the former stockholders of Viveve. The total common shares issued for these transactions was 3,743,282 shares based on the exchange ratio of 0.0080497.

In connection with the proposed Merger, on May 9, 2014, Viveve issued to GBS Venture Partners Limited (“GBS”), a convertible debenture holder, a warrant to purchase shares of our common stock equal to approximately 5% of the outstanding shares of common stock on a post-Merger basis in consideration for the cancellation of convertible promissory notes in the aggregate principal amount of $1,750,000 and accrued interest of approximately $211,000 held by GBS. As part of the closing of the Merger, the Company issued 943,596 shares of common stock to GBS upon the automatic exercise of the warrant.

Concurrent with the Merger, the Company completed a separate private placement of 11,305,567 shares of our common stock, together with warrants for the purchase of 940,189 shares of common stock, for gross proceeds of approximately $6,000,000, which included the conversion of $1,545,678 of convertible promissory notes and related accrued interest. The price per unit was $0.53.

Warrants for Common Stock

In connection with the private placement, the Company issued warrants to purchase a total of 940,189 shares of common stock at an exercise price of $0.53 per share. The warrants have a contractual life of five years and are exercisable immediately in whole or in part, on or before five years from the issuance date.

F-16

In connection with the Loan and Security Agreement entered into on September 30, 2014, the Company issued a warrant to purchase a total of 471,698 shares of common stock at an exercise price of $0.53 per share. The warrant has a contractual life of ten years and is exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrant on the date of issuance to be $622,170 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 77%, risk free interest rate of 2.5% and a contractual life of ten years. The warrant will expire on September 30, 2024. The fair value of the warrant was recorded as a deferred financing cost in other assets and will be amortized to interest expense over the loan term.

As of Septemeber 30, 2014, all of these warrants remain outstanding.

9. Convertible Preferred Stock

As part of the Merger Agreement, all shares of the Series A convertible preferred stock and Series B convertible preferred stock converted to common stock, pursuant to the conversion rights.

The holders of preferred stock had various rights and preferences as follows:

Dividends

The preferred stockholders were entitled to receive, when and as declared by the Board of Directors, out of funds legally available, cash dividends in the amount of $0.0488 and $0.004, respectively, per share, per year for each share of Series A and Series B outstanding in preference and priority to any declaration or payment of any distribution on common stock in such calendar year. These dividends are noncumulative. No distributions could be made to common stock unless all declared dividends on preferred stock have been paid or set aside for payment. No dividends have been declared to date.

Liquidation

Upon liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the holders of the Series A and Series B were entitled to receive an amount per share equal to the original issuance price for the preferred stock (as adjusted for any stock dividends, stock splits or recapitalization and similar events), plus all declared and unpaid dividends thereon to the date fixed for such distribution. If upon the liquidation event, there were insufficient funds to permit the payment to stockholders of the full preferential amounts, then the entire assets and funds of the Company would be distributed ratably among the holders of preferred stock.

Conversion

At the option of the holder thereof, each share of preferred stock was convertible, at the option of the holder at any time after the date of issuance into fully paid and non-assessable shares of common stock as determined by dividing the applicable original issue price for such series by the conversion price for such series. The conversion price was $0.05 for Series A and Series B.

Each share of preferred stock was to automatically be converted into shares of common stock at their respective conversion price immediately upon the earlier of (A) immediately prior to the closing of a firm commitment underwritten initial public offering pursuant to a registration statement under the Securities Act of 1933 covering the offering and sale of the Company’s common stock provided the aggregate gross proceeds to the Company and/or selling stockholders was not less than $30,000,000 prior to underwriters’ commissions and expenses, or (B) upon receipt of a written request for conversion from the holders of a majority of the voting power of the outstanding shares of preferred stock.

Voting

Each holder of preferred stock was entitled to the number of votes equal to the number of shares of common stock into which such holder’s shares of preferred stock could be converted as of the record date. The holders of shares of the preferred stock were entitled to vote on all matters on which the common stock was entitled to vote. The holders of preferred stock, voting as a separate class, were entitled to elect two members of the Board of Directors. The holders of common stock, voting as a separate class, were entitled to elect one member of the Board of Directors. Any additional members of the Board of Directors were to be elected by the holders of common stock and preferred stock, voting together as a single class.

F-17

Warrants for Convertible Preferred Stock

In connection with the loan and security agreement entered into in December 2008, the Company issued a warrant to purchase a total of 196,721 shares of Series A at an exercise price of $0.61 per share. The warrant had a contractual life of ten years and was exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrant on the date of issuance to be $53,863 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 79%, risk free interest rate of 2.7% and a contractual life of ten years. The warrant was to expire on December 2, 2018. The fair value of the warrant was recorded as a debt issuance cost in other assets and was amortized to interest expense over the draw down term of the loan. The entire amount of the warrant was amortized to interest expense in the year ended December 31, 2008. The fair value of the warrant was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $9,639 and $(2,361) were recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In connection with the Series A offering in 2009, the Company issued warrants to purchase 245,900 shares of Series A for $0.61 per share in April 2009. The warrants had a contractual life of ten years and were exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the fair value of the warrants on the date of issuance to be $70,082 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 79%, risk free interest rate of 2.8% and a contractual life of ten years. The warrants were to expire on April 2, 2019. The fair value of the warrants was recorded as an equity issuance cost. The fair value of the warrants was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $11,803 and $(984) were recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In connection with the loan and security agreement entered into in November 2010, the Company issued a warrant to purchase a total of 163,934 shares of Series A at an exercise price of $0.61 per share. The warrant had a contractual life of ten years and was exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrant on the date of issuance to be $46,721 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 79%, risk free interest rate of 2.9% and a contractual life of ten years. The warrant was to expire on November 19, 2020. The fair value of the warrant was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrant was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $2,295 and $(1,311) were recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In connection with the loan and security agreement entered into in April 2012, the Company issued a warrant to purchase a total of 73,770 shares of Series A at an exercise price of $0.61 per share. The warrant had a contractual life of ten years and was exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrant on the date of issuance to be $27,443 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 92%, risk free interest rate of 1.98% and a contractual life of ten years. The warrant was to expire on April 19, 2022. The fair value of the warrant was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrant was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $3,025 and $885 was recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In May 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 2,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants had a contractual life of ten years and were exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $84,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 3.2% and a contractual life of ten years. The warrants were to expire on May 9, 2021. The fair value of the warrants was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $2,000 and $2,000 were recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In June 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 4,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants had a contractual life of ten years and were exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $168,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 3.2% and a contractual life of ten years. The warrants were to expire on June 30, 2021. The fair value of the warrants was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $4,000 and $4,000 were recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

F-18

In September 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 4,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants had a contractual life of ten years and were exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $168,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 2.0% and a contractual life of ten years. The warrants were to expire on September 9, 2021. The fair value of the warrants was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $0 and $4,000 was recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In November 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 1,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants had a contractual life of ten years and were exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $42,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 2.1% and a contractual life of ten years. The warrants were to expire on November 30, 2021. The fair value of the warrants was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $1,000 and $1,000 were recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In December 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 1,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants had a contractual life of ten years and were exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $41,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 1.8% and a contractual life of ten years. The warrants were to expire on December 19, 2021. The fair value of the warrants was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $1,000 and $0 were recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In January 2012, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 910,445 shares of Series B at an exercise price of $0.05 per share. The warrants had a contractual life of ten years and were exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $37,328 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 1.8% and a contractual life of ten years. The warrants were to expire on January 31, 2022. The fair value of the warrants was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $3,642 and $910 were recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In February 2012, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 738,535 shares of Series B at an exercise price of $0.05 per share. The warrants had a contractual life of ten years and were exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $31,018 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 1.98% and a contractual life of ten years. The warrants were to expire on February 27, 2022. The fair value of the warrants was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $2,954 and $740 were recorded to other income (expense), net, respectively, for the nine months ended September 30 2014 and 2013. The warrants were extinguished in connection with the Merger.

F-19

In April 2012, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 2,351,019 shares of Series B at an exercise price of $0.05 per share. The warrants had a contractual life of ten years and were exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $98,743 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 2.0% and a contractual life of ten years. The warrants were to expire on April 16, 2022. The fair value of the warrants was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $9,404 and $2,351 were recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

F-20

Convertible preferred stock warrants outstanding as of December 31, 2013 were as follows:

					Number of
					Shares
	Series				Outstanding		Fair Value
	Exercisable	Expiration	Exercise		Under		December 31,
Issuance Date	for	Date	Price		Warrants		2013
December 2008	Series A	December 2, 2018	$	0.61		196,721	$	44,066
April 2009	Series A	April 2, 2019		0.61		245,900		58,278
November 2010	Series A	November 19, 2020		0.61		163,934		46,393
May 2011	Series B	May 6, 2021		0.05		2,000,000		54,000
June 2011	Series B	June 30, 2021		0.05		4,000,000		108,000
September 2011	Series B	September 9, 2021		0.05		4,000,000		108,000
November 2011	Series B	November 30, 2021		0.05		1,000,000		28,000
December 2011	Series B	December 19, 2021		0.05		1,000,000		28,000
January 2012	Series B	January 31, 2022		0.05		910,445		28,224
February 2012	Series B	February 28, 2022		0.05		738,535		22,895
April 2012	Series B	April 16, 2022		0.05		2,351,019		72,882
April 2012	Series A	April 19, 2022		0.61		73,770		24,934
						16,680,324	$	623,672

10. Summary of Stock Options

Stock Option Plans

The Company has issued equity awards in the form of stock options from three employee benefit plans. The plans include the PLC 2005 Stock Incentive Plan (the “2005 Plan”), the Viveve Amended and Restated 2006 Stock Plan (the “2006 Plan”) and the PLC 2013 Stock Option and Incentive Plan (the “2013 Plan”).

The 2005 Plan was adopted by PLC's Board of Directors and approved by its stockholders. 22,095 shares of common stock remain reserved for issuance under the 2005 Plan. The Company does not intend to grant further awards from the 2005 Plan, however, it will continue to administer the 2005 Plan until all outstanding awards are exercised, expire, terminate or are forfeited. There are currently outstanding stock option awards issued from the 2005 Plan covering a total of 22,095 shares of the Company’s common stock. The weighted average exercise price of the outstanding stock options is $12.83 per share and the weighted average remaining contractual term is 8.80 years.

The 2006 Plan was adopted by the Board of Directors of Viveve and was terminated in conjunction with the Merger. Outstanding stock option awards have been assumed by the Company and will continue to be administered in accordance with the terms of the 2006 Plan until such awards are exercised, expire, terminate or are forfeited. There are currently outstanding stock option awards issued from the 2006 Plan covering a total of 324,820 shares of the Company’s common stock and no shares available for future awards. The weighted average exercise price of the outstanding stock options is $1.55 per share and the weighted average remaining contractual term is 8.06 years. Additionally, prior to the Merger, the Board of Directors voted to accelerate the vesting of all unvested options that were outstanding as of the date of the Merger such that all options would be immediately vested and exercisable by the holders. Furthermore, at the Merger, outstanding options to purchase shares of Viveve, Inc. common stock issued from the 2006 Plan were converted into options to purchase shares of the Company’s Common Stock (rounded down to the nearest whole share). The number of shares of the Company’s common stock into which the 2006 Plan options were converted was determined by multiplying the number of shares covered by each 2006 Plan option by the exchange ratio of 0.0080497. The exercise price of each 2006 Plan option was determined by dividing the exercise price of each 2006 Plan option immediately prior to the Merger by the exchange ratio of 0.0080497 (rounded up to the nearest cent).

The 2013 Plan was also adopted by PLC's Board of Directors and approved by its stockholders. The 2013 Plan is administered by the Compensation Committee of the Company’s Board of Directors (the “Administrator”). Under the 2013 Plan, the Company may grant to eligible participants awards of equity which may take the form of stock options (both incentive stock options and non-qualified stock options), stock appreciation rights, restricted, deferred or unrestricted stock awards, performance based awards or dividend equivalent rights. Awards may be granted to officers, employees, non-employee Directors (as defined in the 2013 Plan) and other key persons (including consultants and prospective employees). The term of any stock option award may not exceed 10 years and may be subject to vesting conditions, as determined by the Administrator. Options granted generally vest over four years. Incentive stock options may be granted only to employees of the Company or any subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f) of the Internal Revenue Code. The exercise price of any stock option award cannot be less than the fair market value of the Company’s common stock, provided, however, that an incentive stock option granted to an employee who owns more than 10% of the Company’s outstanding voting power must have an exercise price of no less than 110% of the fair market value of the Company’s common stock and a term that does not exceed five years. There are currently outstanding stock option awards issued from the 2013 Plan covering a total of 1,947,619 shares of the Company’s common stock and there remain reserved for future awards 839,148 shares of the Company’s common stock. The weighted average exercise price of the outstanding stock options is $0.80 per share. Concurrent with the Merger, the stockholders approved an amendment to the 2013 Plan to increase the number of shares reserved under the 2013 Plan from 113,826 to 3,111,587.

F-21

Activity under the 2005 Plan, the 2006 Plan and the 2013 Plan is as follows:

	Outstanding Options
						Weighted-
				Weighted-		Average
	Number			Average		Remaining
	of			Exercise		Contractual
	Shares			Price		Term (years)
Options outstanding as of December 31, 2013		363,413		$	2.94		8.80
Options granted		1,901,476		$	0.60
Options assumed from PLC		68,238		$	10.24
Options canceled		(38,593	)	$	1.75
Options outstanding as of September 30, 2014		2,294,534		$	1.02		9.67

As of September 30, 2014, the Company had 839,148 shares available for grant.

The options outstanding and exercisable as of September 30, 2014 are as follows:

			Options Outstanding						Options Exercisable
							Weighted-
			Number		Weighted-		Average		Number		Weighted-
			Outstanding		Average		Remaining		Exercisable		Average
Range of			as of		Exercise		Contractual		as of		Exercise
Exercise Prices			September 30, 2014		Price		Term (Years)		September 30, 2014		Price
	$0.12			320	$	0.12		2.21		320	$	0.12
	$0.60			1,901,476	$	0.60		10.00		20,000	$	0.60
	$1.24			314,036	$	1.24		8.15		314,036	$	1.24
$7.00	-	$9.00		59,372	$	8.63		8.28		59,372	$	8.63
$12.00	-	$18.63		19,081	$	15.29		6.79		19,081	$	15.29
	$37.00			250	$	37.00		3.72		250	$	37.00
				2,294,535	$	1.02		9.67		413,059	$	2.94

Stock-Based Compensation

During the three and nine months ended September 30, 2014, the Company granted stock options to employees to purchase 1,901,476 shares of common stock with a weighted-average grant date fair value of $0.32 per share. Stock-based compensation expense recognized during the three months ended September 30, 2014 and 2013 was $113,345 and $16,284 respectively. Stock-based compensation expense recognized during the nine months ended September 30, 2014 and 2013 was $143,643 and $66,001, respectively. As of September 30, 2014, the total unrecognized compensation cost in connection with unvested stock options was approximately $567,000. These costs are expected to be recognized over a period of approximately 3.26 years. The aggregate intrinsic value of options outstanding as of September 30, 2014 was approximately $1.7 million. There were no options exercised during the nine months ended September 30, 2014 and 2013.

F-22

The Company estimated the fair value of stock options using the Black-Scholes option pricing model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period of the awards. The fair value of employee stock options granted was estimated using the following assumptions:

	Nine Months Ended
	September 30,
	2014		2013
Expected term (in years)		5		5
Average volatility		61%		67%
Risk-free interest rate		1.80%		0.87%
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 Company specific events that affected volatility in a prior period. The expected term of employee 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 and nine months ended September 30, 2014 and 2013:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Research and development	$	101	$	976	$	667	$	(7,016	)
General and administrative		113,245		15,308		142,976		73,017
Total	$	113,346	$	16,284	$	143,643	$	66,001

F-23

11. Income Taxes

Provision for Income Tax

The Company’s effective tax rate is 0% for the three and nine months ended September 30, 2014 and the Company expects that its effective tax rate for the full year 2014 will be 0%. Based on the weight of available evidence, including cumulative losses since inception and expected future losses, the Company has determined that it is more likely than not that the deferred tax asset amount will not be realized and therefore a full valuation allowance has been provided on net deferred tax assets.

As of September 30, 2014, the Company had net operating loss carryforwards of approximately $11,188,000 and $11,176,000 available to offset future taxable income, if any, for both federal and California state income tax purposes, respectively. The Company’s federal and state net operating loss carry-forwards begin to expire in 2027 and 2016, respectively, and valuation allowances have been provided, where necessary.

Utilization of the net operating loss carry-forward may be subject to an annual limitation due to the ownership percentage change limitations provided by the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of the net operating loss before utilization.

All of the Company’s tax years will remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating loss or credits.

Uncertain Tax Positions

The gross amount of unrecognized tax benefits as of September 30, 2014 is approximately $78 thousand related to reserves on research and development credits, none of which will affect the effective tax rate if recognized due to the valuation allowance. The Company does not expect any material changes in the next 12 months in unrecognized tax benefits.

The Company recognizes interest and/or penalties related to uncertain tax positions as other expense and not tax expense. The Company currently has no interest and penalties related to uncertain tax positions.

12. Related Party Transactions

In June 2006, the Company entered into a Development and Manufacturing Agreement with Stellartech Research Corporation (the “Agreement”). The Agreement was amended on October 4, 2007. Under the Agreement, the Company agreed to purchase 300 units of generators manufactured by Stellartech. In conjunction with the Agreement, Stellartech purchased 300,000 shares of common stock at par value. These shares are subject to a right of repurchase by the Company, which lapse over a four-year period. As of December 31, 2012, none of the shares of common stock were subject to repurchase. Under the Agreement, the Company paid Stellartech $345,472 and $33,000 for goods and services in the nine months ended September 30, 2014 and 2013, respectively.

13. Subsequent Events

On September 30, 2014, the Company entered into a Loan and Security Agreement pursuant to which we received a term loan in the amount of $5 million, which will be funded in 3 tranches. The first tranch of $2.5 million was provided to the Company on October 1, 2014. The proceeds from the first tranche were used to repay the existing loan with a financial institution which totaled $1,630,925. Before the second and the third tranches of the term loan will be funded, we must meet certain enrollment milestones and achieve certain positive results relating to our OUS Clinical Trials, among other things.

F-24

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
of Viveve, Inc.

(a development stage enterprise)

We have audited the accompanying financial statements of Viveve, Inc., (a development stage enterprise) (“the Company”), which comprise the balance sheets as of December 31, 2012 and 2013, and the related statements of operations, stockholders’ equity (deficit), and cash flows for each of the two years in the period ended December 31, 2013 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2013 and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Viveve, Inc. (a development stage enterprise) as of December 31, 2012 and 2013, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2013 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2013 in accordance with accounting principles generally accepted in the United States of America.

F-25

Viveve, Inc.

Page 2

Emphasis of Matter Regarding Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred recurring losses and negative cash flow from operations since inception. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters also are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to that matter.

 /s/ Burr Pilger Mayer, Inc.

San Jose, California

March 18, 2014

F-26

VIVEVE, INC.

(a development stage enterprise)

BALANCE SHEETS

as of December 31, 2012 and 2013

____________

	December 31,			December 31,
	2012			2013
ASSETS
Current assets:
Cash and cash equivalents	$	448,754		$	430,107
Accounts receivable		849			-
Inventory		360,214			228,163
Prepaids and other current assets		64,522			308,183
Total current assets		874,339			966,453
Property and equipment, net		128,627			127,524
Other assets		57,713			43,783
Total assets	$	1,060,679		$	1,137,760
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	485,577		$	967,315
Accrued liabilities		345,644			516,152
Note payable		1,581,390			1,463,244
Related party convertible bridge notes		1,000,000			4,875,000
Total current liabilities		3,412,611			7,821,711
Accrued liabilities, noncurrent		41,127			-
Preferred stock warrant liabilities		685,213			623,672
Total liabilities		4,138,951			8,445,383
Commitments and contingences (Note 7)
Stockholders’ deficit:
Series A convertible preferred stock: par value $0.001, 24,543,626 shares authorized, 23,863,302 shares issued and outstanding as of December 31, 2012 and 2013 (Liquidation value of $14,556,614)		23,863			23,863
Series B convertible preferred stock: par value $0.001, 227,000,000 shares authorized, 171,199,348 shares issued and outstanding as of December 31, 2012 and 2013 (Liquidation value of $8,559,967)		171,199			171,199
Common stock: par value $0.001, 612,000,000 shares authorized, 6,555,305 shares issued and outstanding as of December 31, 2012 and 2013		6,556			6,556
Additional paid-in capital		22,308,256			22,395,684
Deficit accumulated during the development stage		(25,588,146	)		(29,904,925	)
Total stockholders’ deficit		(3,078,272	)		(7,307,623	)
Total liabilities and stockholders’ deficit	$	1,060,679		$	1,137,760

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

F-27

viveve, inc.

(a development stage enterprise)

STATEMENT OF OPERATIONS

for the years ended December 31, 2012 and 2013 and, cumulatively,

for the period from September 21, 2005 (Date of Inception) to December 31, 2013

____________

							Cumulative
							for the
							period from
							September 21,
							2005
							(Date of
							Inception) to
							December 31,
	2012			2013			2013
Revenue	$	249,408		$	152,270		$	421,678
Cost of revenue		118,272			182,329			321,433
Gross margin		131,136			(30,059	)		100,245
Operating expenses:
Research and development		1,396,179			771,695			14,192,193
General and administrative		3,076,875			3,129,234			14,288,499
Total operating expenses		4,473,054			3,900,929			28,480,692
Loss from operations		(4,341,918	)		(3,930,988	)		(28,380,447	)
Interest income		527			8			92,252
Interest expense		(743,359	)		(447,340	)		(2,208,688	)
Other income (expense), net		124,731			61,541			591,958
Net loss	$	(4,960,019	)	$	(4,316,779	)	$	(29,904,925	)

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

F-28

VIVEVE, INC.

(a development stage enterprise)

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

Cumulative for the period from September 21, 2005 (Date of Inception) to December 31, 2013

____________

																	Deficit
	Convertible				Convertible												Accumulated			Total
	Preferred Stock				Preferred Stock										Additional		During the			Shareholders’
	Series A				Series B				Common Stock						Paid-In		Development			Equity
	Shares		Amount		Shares		Amount		Shares			Amount			Capital		Stage			(Deficit)
Issuance of restricted common stock at $0.001 per share for cash in February and June 2006		-	$	-		-	$	-		4,000,000		$	4,000		$	-	$	-		$	4,000
Stock-based compensation expense		-		-		-		-		-			-			360		-			360
Comprehensive and net loss		-		-		-		-		-			-			-		(497,345	)		(497,345	)
Balances at December 31, 2006		-		-		-		-		4,000,000			4,000			360		(497,345	)		(492,985	)
Issuance of Series A convertible preferred stock at $0.61 per share in August 2007 for cash and conversion of $501,873 of notes payable, net of warrants and issuance costs of $610,609		7,380,119		7,380		-		-		-			-			3,883,884		-			3,891,264
Stock-based compensation expense		-		-		-		-		-			-			2,522		-			2,522
Comprehensive and net loss		-		-		-		-		-			-			-		(884,971	)		(884,971	)
Balances at December 31, 2007		7,380,119		7,380		-		-		4,000,000			4,000			3,886,766		(1,382,316	)		2,515,830
Stock-based compensation expense		-		-		-		-		-			-			10,866		-			10,866
Comprehensive and net loss		-		-		-		-		-			-					(3,145,042	)		(3,145,042	)
Balances at December 31, 2008		7,380,119		7,380		-		-		4,000,000			4,000			3,897,632		(4,527,358	)		(618,346	)
Issuance of Series A convertible preferred stock at $0.61 per share, net of warrants and issuance costs of $70,082, in April 2009		2,459,017		2,459		-		-		-			-			1,427,460		-			1,429,919
Issuance of Series A convertible preferred stock at $0.61 per share, net of issuance costs of $15,825, in August 2009		7,377,048		7,377		-		-		-			-			4,476,799		-			4,484,176
Repurchase of common stock		-		-		-		-		(565,833	)		(565	)		-		-			(565	)
Exercise of stock options at $0.06 per share in August 2009		-		-		-		-		322,395			322			19,021		-			19,343
Stock-based compensation expense		-		-		-		-		-			-			20,834		-			20,834
Comprehensive and net loss		-		-		-		-		-			-			-		(5,684,452	)		(5,684,452	)
Balances at December 31, 2009		17,216,184		17,216		-		-		3,756,562			3,757			9,841,746		(10,211,810	)		(349,091	)

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

F-29

VIVEVE, INC.

(a development stage enterprise)

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT), CONTINUED

Cumulative for the period from September 21, 2005 (Date of Inception) to December 31, 2013

____________

																		Deficit
	Convertible				Convertible													Accumulated			Total
	Preferred Stock				Preferred Stock										Additional			During the			Shareholders’
	Series A				Series B				Common Stock						Paid-In			Development			Equity
	Shares		Amount		Shares		Amount		Shares			Amount			Capital			Stage			(Deficit)
Balances at December 31, 2009		17,216,184		17,216		-		-		3,756,562			3,757			9,841,746			(10,211,810	)		(349,091	)
Issuance of Series A convertible preferred stock at $0.61 per share, net of issuance costs of $59,978 in April, May and June 2010		6,647,118		6,647		-		-		-			-			3,988,116			-			3,994,763
Exercise of stock options in March 2011		-		-		-		-		173,455			173			(173	)		-			-
Stock-based compensation expense		-		-		-		-		-			-			28,770			-			28,770
Comprehensive and net loss		-		-		-		-		-			-			-			(5,414,535	)		(5,414,535	)
Balances at December 31, 2010		23,863,302		23,863		-		-		3,930,017			3,930			13,858,459			(15,626,345	)		(1,740,093	)
Exercise of stock options in March and April 2011		-		-		-		-		9,000			9			-			-			9
Repurchase of restricted stock options in
September 2011		-		-		-		-		(5,250	)		(5	)		(311	)		-			(316	)
Stock-based compensation expense		-		-		-		-		-			-			31,238			-			31,238
Comprehensive and net loss		-		-		-		-		-			-			-			(5,001,782	)		(5,001,782	)
Balances at December 31, 2011		23,863,302		23,863		-		-		3,933,767			3,934			13,889,386			(20,628,127	)		(6,710,944	)
Issuance of Series B convertible preferred stock at $0.05 per share, net of issuance costs of $85,807 in April, June and July 2012		-		-		171,199,348		171,199		-			-			8,302,960			-			8,474,159
Exercise of stock options in April 2012		-		-		-		-		1,866,903			1,867			7,468			-			9,335
Stock-based compensation expense		-		-		-		-		754,635			755			108,442			-			109,197
Comprehensive and net loss		-		-		-		-		-			-			-			(4,960,019	)		(4,960,019	)
Balances at December 31, 2012		23,863,302		23,863		171,199,348		171,199		6,555,305			6,556			22,308,256			(25,588,146	)		(3,078,272	)
Stock-based compensation expense		-		-		-		-		-			-			87,428			-			87,428
Comprehensive and net loss		-		-		-		-		-			-			-			(4,316,779	)		(4,316,779	)
Balances at December 31, 2013		23,863,302	$	23,863		171,199,348	$	171,199		6,555,305		$	6,556		$	22,395,684		$	(29,904,925	)	$	(7,307,623	)

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

F-30

VIVEVE, INC.

(a developmental stage enterprise)

STATEMENTS OF CASH FLOWS

for the years ended December 31, 2012 and 2013 and, cumulatively,

for the period from September 21, 2005 (Date of Inception) to December 31, 2013

____________

							Cumulative for the
							period from
							September 21, 2005
							(Date of
							Inception) to
	2012			2013			December 31, 2013
Cash flows from operating activities:
Net loss	$	(4,960,019	)	$	(4,316,779	)	$	(29,904,925	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		57,173			66,120			239,475
Stock-based compensation expense		109,197			87,428			291,215
Revaluation of warrant liability		(156,163	)		(61,541	)		(622,824	)
Noncash interest expense		545,165			305,917			1,228,529
Loss on disposal of property and equipment		31,433			-			31,433
Changes in assets and liabilities:
Accounts receivable		(849	)		849			-
Inventory		(242,861	)		71,247			(288,967	)
Prepaid and other current assets		123,605			(243,661	)		(308,183	)
Other noncurrent assets		(48,300	)		13,930			(43,783	)
Accounts payable		(13,175	)		481,738			967,315
Accrued liabilities		(888,960	)		(159,868	)		337,095
Net cash used in operating activities		(5,443,754	)		(3,754,620	)		(28,073,620	)
Cash flows from investing activities:
Proceeds from sale of property and equipment		50			-			50
Purchase of property and equipment		(23,331	)		(4,213	)		(337,678	)
Net cash used in investing activities		(23,281	)		(4,213	)		(337,628	)
Cash flows from financing activities:
Net proceeds from issuance of common stock		-			-			4,000
Proceeds from exercise of stock options		9,335			-			28,687
Repurchase of common stock		-			-			(565	)
Repurchase of restricted stock options		-			-			(316	)
Proceeds from issuance of convertible preferred A stock  and warrants, net of issuance costs		-			-			13,726,160
Proceeds from notes payable		2,135,159			-			6,107,159
Proceeds from issuance of convertible preferred B stock and warrants, net of issuance costs		3,764,191			-			3,764,191
Proceeds from related party convertible bridge notes and warrants		2,000,000			3,875,000			9,375,400
Repayments of notes payable		(2,165,475	)		(134,814	)		(4,163,361	)
Net cash provided by financing activities		5,743,210			3,740,186			28,841,355
Net increase (decrease) in cash and cash equivalents		276,175			(18,647	)		430,107
Cash and cash equivalents
Beginning of period		172,579			448,754			-
End of period	$	448,754		$	430,107		$	430,107

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

F-31

VIVEVE, INC.

(a developmental stage enterprise)

STATEMENTS OF CASH FLOWS, CONTINUED

for the years ended December 31, 2012 and 2013 and, cumulatively,

for the period from September 21, 2005 (Date of Inception) to December 31, 2013

____________

					Cumulative for the
					period from
					September 21, 2005
					(Date of
					Inception) to
	2012		2013		December 31, 2013
Supplemental disclosure
Cash paid for interest	$	198,194	$	141,423	$	783,482
Cash paid for income taxes	$	800	$	800	$	6,400
Supplemental schedule of noncash investing and financing activities:
Issuance of warrants in connection with bridge loans	$	-	$	-	$	20,069
Conversion of bridge loans and interest into Series A convertible preferred stock	$	-	$	-	$	501,873
Cancellation of warrants in connection with bridge loans	$	-	$	-	$	15,091
Issuance of warrants in connection with notes payable	$	-	$	-	$	100,584
Issuance of warrants in connection with Series A convertible preferred stock financing	$	-	$	-	$	70,082
Conversion of bridge loans and interest into Series B convertible preferred stock	$	4,709,968	$	-	$	4,709,968
Issuance of warrants in connection with related party convertible bridge notes	$	167,090	$	-	$	670,090
Tranfer of equipment between inventory and property and equipment	$	-	$	60,804	$	60,804

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

F-32

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________

1. Formation and Business of the Company

Viveve, Inc. (the “Company”) was incorporated in the state of Delaware on September 21, 2005 for the purpose of the design, development, manufacture and marketing of medical devices for the non-invasive treatment of vaginal laxity.

The Company is considered to be in the development stage and, since inception, has devoted substantially all of its time and effort to developing products, raising capital and recruiting personnel. The Company has not generated substantial revenues to date from its planned principal operations. As such, it is subject to risks common to companies in the development stage including but not limited to, development of new products, markets and distribution channels, dependence on key personnel, and the ability to obtain additional capital to fund its product plans. The Company may require additional resources to complete the commercialization of its proposed products. Therefore, the Company may need to raise additional capital in the future to fund its operations. The Company may at that time be unable to raise such funds when needed or on acceptable terms. If the Company fails to raise additional funds as needed it may have to delay or terminate its product development.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred recurring losses and negative cash flows from operations since inception. The Company has not generated significant revenues and has funded its operating losses through the sale of preferred stock and the issuance of debt. The Company has a limited operating history and its prospects are subject to risks, expenses and uncertainties frequently encountered by companies in the industry. These risks include, but are not limited to, the uncertainty of availability of additional financing and the uncertainty of achieving future profitability. Management of the Company intends to raise additional funds through the issuance of equity securities. There can be no assurance that such financing will be available or on terms which are favorable to the Company. Failure to generate sufficient cash flows from operations, raise additional capital or reduce certain discretionary spending could have a material adverse effect on the Company’s ability to achieve its intended business objectives. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not contain any adjustments that might result from the outcome of this uncertainty.

2. Summary of Significant Accounting Policies

Basis of Presentation and Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less, at the time of purchase, to be cash equivalents. The Company’s cash and cash equivalents are deposited in demand and money market accounts at one financial institution. Deposits in this institution may, from time to time, exceed the federally insured amounts.

F-33

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________ 

2. Summary of Significant Accounting Policies, continued

Concentration of Credit Risk and Other Risks and Uncertainties

To achieve profitable operations, the Company must successfully develop, manufacture, and market its products. There can be no assurance that any such products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products will be successfully marketed. These factors could have a material adverse effect upon the Company’s financial results, financial position, and future cash flows.

The Company’s future products may require approval from the U.S. Food and Drug Administration or other international regulatory agencies prior to commencing commercial sales. There can be no assurance that the Company’s future products will receive any of these required approvals. If the Company was denied such approvals or such approvals were delayed, it would have a material adverse impact on the Company’s financial results, financial position and future cash flows.

The Company is subject to risks common to companies in the medical device industry including, but not limited to, new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, uncertainty of market acceptance of products, product liability, and the need to obtain additional financing. The Company’s ultimate success is dependent upon its ability to raise additional capital and to successfully develop and market its products.

During the years ended December 31, 2012 and 2013, three customers accounted for 100% of the Company’s revenue.

Inventory

Inventory is stated at the lower of cost or market. Cost is determined on a standard cost basis which approximates actual cost on a first-in, first-out method. Lower of cost or market is evaluated by considering obsolescence, excessive levels of inventory, deterioration and other factors. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolescence or impaired inventory. Excess and obsolete inventory is charged to cost of revenue and a new, lower-cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

As part of the Company’s normal business, the Company generally utilizes various finished goods inventory as sales demos to facilitate the sale of its products to prospective customers. The Company is amortizing these demos over an estimated useful life of five years. The amortization of the demos is charged to general and administrative expense and the demos are included in the medical equipment line of the property and equipment balance on the balance sheet as of December 31, 2013.

Fair Value of Financial Instruments

Carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, prepaid and other current assets, accounts payable and accrued liabilities approximate fair value due to their short maturities. Based on borrowing rates currently available to the Company for loans with similar terms, the carrying value of the notes payable approximates fair value.

F-34

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________ 

2. Summary of Significant Accounting Policies, continued

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation of property and equipment is computed using the straight line method over their estimated useful lives of three to five years. Leasehold improvements are amortized on a straight-line basis over the lesser of their useful life or the life of the lease. Upon sale or retirement of assets, the cost and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss is reflected in operations. Maintenance and repairs are charged to operations as incurred.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. When such an event occurs, management determines whether there has been an impairment by comparing the anticipated undiscounted future net cash flows to the related asset’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. The Company has not identified any such impairment losses to date.

Preferred Stock Warrants

Freestanding warrants and other similar instruments related to shares that are redeemable are classified as liabilities at fair value on the balance sheets. The warrants are subject to re-measurement at each balance sheet date and any change in fair value is recognized as a component of other income (expense), net on the statements of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the preferred stock warrants.

Income Taxes

The Company accounts for income taxes using the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established to reduce deferred tax assets when management estimates, based on available objective evidence, that it is more-likely-than-not that the benefit will not be realized for the deferred tax assets.

In September of 2013, the U.S. Department of the Treasury issued final regulations on the deduction and capitalization of expenditures related to tangible property for income tax purposes. These regulations apply to the Company’s fiscal year beginning on January 1, 2014. The Company is currently assessing the financial statement impact of these regulations, but does not expect that the new regulations will have a material impact on the effective rate.

Revenue

The Company recognizes revenue from the sale of its product, the Viveve System ®, which has received the European CE (Conformité Européenne) approval. Revenue is recognized upon delivery, provided that persuasive evidence of an arrangement exists, the price is fixed or determinable and collection of the resulting receivable is reasonably assured.

F-35

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________ 

2. Summary of Significant Accounting Policies, continued

Revenue, continued

The Company does not provide its customers with a contractual right of return.

Shipping and Handling Costs

The Company includes amounts billed for shipping and handling in revenues and shipping and handling costs in cost of revenue.

Product Warranty

The Company’s products are generally subject to a one year warranty, which provides for the repair, rework or replacement of products (at its option) that fail to perform within stated specification. The Company has assessed the historical claims and assumes that there is no outstanding products to be replaced that are subject to claims as of December 31, 2013. The Company will continue to assess if there should be a warranty accrual going forward.

Advertising Costs

Advertising costs are charged to general and administrative expenses as incurred. Advertising costs for the years ended December 31, 2012 and 2013 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2013 were $264,834, $7,812, and $918,013, respectively.

Research and Development

Research and development costs are charged to operations as incurred. Research and development costs include, but are not limited to, payroll and personnel expenses, prototype materials, laboratory supplies, consulting costs, and allocated overhead, including rent, equipment depreciation, and utilities.

Stock-Based Compensation

The Company accounts for stock-based employee compensation arrangements which requires the recognition of compensation expense, using a fair-value based method for costs related to all employee share-based payments, including stock options. The Company estimates the fair value of share-based payment awards on the date of grant using an option-pricing model. All option grants have been expensed on a straight-line basis over their vesting period. Equity instruments issued to nonemployees are recorded at their fair value on the measurement date and are subject to periodic adjustment as the underlying equity instruments vest.

Comprehensive Loss

Comprehensive loss is the changes in equity of an enterprise, except those resulting from stockholder transactions. Accordingly, comprehensive loss may include certain changes in equity that are excluded from net loss. For the years ended December 31, 2012 and 2013 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31 2013, the Company’s comprehensive loss is the same as its net loss. There were no components of comprehensive loss for any of the periods presented.

F-36

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________

3. Fair Value Measurements

The Company recognizes and discloses the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). Each level of input has different levels of subjectivity and difficulty involved in determining fair value.

Level 1 Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date. Therefore, determining fair value for Level 1 investments generally does not require significant judgment, and the estimation is not difficult.

Level 2 Pricing is provided by third party sources of market information obtained through investment advisors. The Company does not adjust for or apply any additional assumptions or estimates to the pricing information received from its advisors.

Level 3 Inputs used to measure fair value are unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. The determination of fair value for Level 3 instruments involves the most management judgment and subjectivity.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and considers factors specific to the asset or liability.

The Company’s Level 1 financial asset is a money market fund with a fair value that is based on quoted market prices. The money market fund is included in cash and cash equivalents on the Company’s balance sheets. The Company’s Level 3 liability consists of convertible preferred stock warrant liabilities. The valuation of the warrant liabilities is discussed in Note 9. The following tables set forth the Company’s financial instruments that were measured at fair value on a recurring basis at December 31, 2012 and 2013 by level within the fair value hierarchy:

	Assets and Liabilities at Fair Value as of December 31, 2012
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
	Level 1		Level 2		Level 3		Total
Assets
Money market fund	$	503	$	-	$	-	$	503
Total assets	$	503	$	-	$	-	$	503
Liabilities
Preferred stock warrant liabilities	$	-	$	-	$	685,213	$	685,213
Total liabilities	$	-	$	-	$	685,213	$	685,213

F-37

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________

3. Fair Value Measurements, continued

	Assets and Liabilities at Fair Value as of December 31, 2013
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
	Level 1		Level 2		Level 3		Total
Assets
Money market fund	$	324	$	-	$	-	$	324
Total assets	$	324	$	-	$	-	$	324
Liabilities
Preferred stock warrant liabilities	$	-	$	-	$	623,672	$	623,672
Total liabilities	$	-	$	-	$	623,672	$	623,672

The change in the fair value of the preferred stock warrant liabilities is summarized below:

Fair value as of December 31, 2011	$	646,844
Fair value of warrants issued		194,532
Change in fair value recorded in other income (expense), net		(156,163	)
Fair value as of December 31, 2012		685,213
Fair value of warrants issued		-
Change in fair value recorded in other income (expense), net		(61,541	)
Fair value as of December 31, 2013	$	623,672

 All assets and liabilities have been valued using a market approach, except for Level 3. The following table describes the valuation techniques used to calculate fair value for Level 3 liabilities. For Level 3 liabilities, the Company determines the fair value measurement valuation policies and procedures. Annually, the Board of Directors assess and approve the fair value measurement policies and procedures. At least annually, the Company determines if the current valuation techniques used in the fair value measurements are still appropriate and evaluates and adjusts the unobservable inputs used in the fair value measurements based on current market conditions and third-party information.

	Fair Value as of				Range
	December 31, 2012		Valuation	Unobservable	(Weighted-Average)
Preferred stock	$	685,213	Black-Scholes	Preferred series
warrant liabilities			option pricing model	prices		$0.04-0.44 ($0.06)
				Volatility		74.2%-91.6% (83%)

F-38

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________  

3. Fair Value Measurements, continued

	Fair Value as of				Range
	December 31, 2013		Valuation	Unobservable	(Weighted-Average)
Preferred stock	$	623,672	Black-Scholes	Preferred series
warrant liabilities			option pricing model	prices	$	0.04-0.44 ($0.06)
				Volatility		70.6%-84.2% (76%)

There were no changes in the valuation technique and related inputs from prior periods.

4. Balance Sheet Components

Property and Equipment, Net

	2012			2013
Medical equipment	$	215,639		$	276,443
Computer equipment		30,871			32,143
Furniture and fixtures		13,293			13,293
		259,803			321,879
Less: Accumulated depreciation and amortization		(131,176	)		(194,355	)
Net property and equipment	$	128,627		$	127,524

Depreciation and amortization expense for the years ended December 31, 2012 and 2013 and for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013 was $57,173, $66,120 and $239,475, respectively.

Accrued Liabilities

	2012		2013
Accrued settlement related costs	$	263,560	$	-
Accrued interest		8,987		312,075
Accrued severence pay		-		58,846
Accrued vacation		54,153		81,499
Accrued loan restructuring fees		-		27,288
Deferred rent		18,034		15,284
Other accruals		910		21,160
Total accrued liabilities	$	345,644	$	516,152

5. Note Payable

In December 2008, the Company entered into a loan and security agreement with a financial institution for $1,500,000. In connection with the agreement, the Company issued a warrant to the lender to purchase a total of 196,721 shares of the Company’s Series A convertible preferred stock at $0.61 per share (Note 9). The borrowings were repayable over 27 months at a rate of 8.5% per annum. An additional $75,000 was due as final payment at the end of the loan term. All borrowings under the agreement were collateralized by substantially all of the Company’s assets, excluding intellectual property.

F-40

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________  

5. Note Payable, continued

The agreement contained a material adverse change clause, as defined in the agreement, which would result in an event of default if the bank deems a material adverse change to have occurred to the Company’s business. The Company was also required to comply with certain affirmative and negative covenants, including obtaining additional equity financing of at least $6,000,000 on or before March 31, 2009. The Company did not meet this covenant and subsequently obtained a forbearance agreement from the bank extending the equity financing requirement to July 31, 2009. In November 2010, the Company paid off the outstanding principal amount, interest accrued and final payment and paid a prepayment penalty.

In November 2010, the Company entered into a loan and security agreement with a financial institution for $2,000,000. The borrowings were repayable over 36 months at a rate of 9.5% per annum. An additional $80,000 was due as final payment at the end of the loan term. In connection with the agreement, the Company issued a warrant to the lender to purchase a total of 163,934 shares of the Company’s Series A convertible preferred stock at $0.61 per share (Note 9). All borrowings under the agreement are collateralized by substantially all of the Company’s assets, excluding intellectual property. The Company used a portion of the proceeds received to repay, in full, amounts outstanding under the December 2008 loan agreement. As of December 31, 2012 and 2013, the note payable had an outstanding balance of $0.

In April 2012, the Company entered into a loan and security agreement for up to $2,135,159 in term loans. The full amount was drawn down in April 2012. In connection with the agreement, the Company issued a warrant to the lender to purchase a total of 73,770 shares of the Company’s Series A convertible preferred stock at $0.61 per share (Note 9). The borrowings were repayable in interest only payments until May 1, 2012 and then 30 equal installments of principal and interest at a rate of 9.5% per annum. An additional 4% of the principal or approximately $85,000 will be due as final payment at the end of the loan term. The Company recorded $41,127, $35,345 and $76,472 as additional interest expense during the years ended December 31, 2012 and 2013 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2013, respectively, related to the $85,000 payment. The Company will continue to accrue the balance of the $85,000 cash payment over the remaining term of the loan using the effective interest rate method. The Company will continue to accrue the balance of the $85,000 cash payment over the remaining term of the loan using the effective interest rate method. As of December 31, 2012, $41,172 was recorded as accrued liabilities, noncurrent on the balance sheet relating to this payment. As of December 31, 2013, $76,472 was recorded as accrued liabilities on the balance sheet relating to this payment. The Company used the proceeds from these term loans to pay off an existing loan with the financial institution. All borrowings under the agreement are collateralized by substantially all of the Company’s assets, including intellectual property. As of December 31, 2012 and 2013, the note payable had an outstanding balance of $1,606,612 and $1,471,798, respectively.

In February 2013, the Company and lender amended the loan and security agreement to defer up to 3 months of principal payments contingent upon the receipt of bridge loan proceeds in increments of $500,000, up to $1,500,000 on or before April 30, 2013, beginning March 1, 2013. This amendment also includes a $15,000 restructuring fee that will be due upon loan maturity currently scheduled for October 1, 2014.

In May 2013, the Company and lender amended the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more, on or before June 30, 2013. The principal payments was to be deferred and payable on August 1, 2013. This amendment also included a $10,000 restructuring fee that would be due upon loan maturity currently scheduled for October 1, 2014.

F-41

5.     Note Payable, continued

In July 2013, the Company and lender agreed to further amend the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more, on or before August 28, 2013, and an additional month deferral provided a 2013 equity event was completed resulting in net cash proceeds of not less than $10 million from the sale of the Company’s equity securities consummated by September 27, 2013. Principal payments would be deferred and payable on October 1, 2013, provided both of these conditions were met. This amendment also included an additional restructuring fee of $10,000 that would be due upon loan maturity currently scheduled for October 1, 2014.

In September 2013, the Company and lender agreed to further amend the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more on or before August 28, 2013 and another $500,000 or more on or before October 28, 2013. Principal payments would be deferred until December 1, 2013. This amendment also includes an additional $10,000 in restructuring fees that would be due upon maturity currently scheduled for October 1, 2014.

In November 2013, the Company and lender agreed to further amend the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more on or before December 27, 2013 and upon the consummation of a 2014 equity event requiring the receipt of not less than $7 million in net cash proceeds by no later than January 24, 2014. Principal payments would be deferred until February 1, 2014. This amendment also includes an additional $10,000 in restructuring fees or $55,000 in total as of December 31, 2013 that will be due upon loan maturity currently scheduled for October 1, 2014. The Company recorded $27,288 as additional interest expense during the year ended December 31, 2013 related to the $55,000 restructuring payment. The Company will continue to accrue the balance of the $55,000 cash restructuring payment over the remaining term of the loan using the effective interest rate method. As of December 31, 2013, $27,288 was recorded as accrued liabilities on the balance sheets relating to this payment.

F-42

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________

The Agreement contains a material adverse change clause, as defined in the agreement, which would result in an event of default if the bank deems a material adverse change to have occurred to the Company’s business. The continuing liquidity issues the Company faces could be construed by note holder as a material adverse change which could trigger an acceleration of all of the outstanding debt. As such, the Company has classified all of its outstanding debt balance as a current liability as of December 31, 2013.

As of December 31, 2013, future minimum payments under the note payable are as follows:

Year ending December 31, 2014	$	1,597,196
Less: Amount representing interest		(125,398	)
Present value of obligations		1,471,798
Less: Unamortized debt discount		(8,554	)
		1,463,244
Less: Notes payable, current portion		1,463,244
Notes payable, noncurrent portion	$	-

6. Related Party Convertible Bridge Notes

In May 2011 (“May 2011 note”), the Company issued a convertible promissory note in the amount of $1,000,000. The note bears an interest rate of 8% per annum. The May 2011 note was amended in June 2011 and September 2011 to issue another $1,000,000 on each amendment date, for an aggregate of $3,000,000. In conjunction with the notes, the Company issued a warrant to the investor to purchase Series B convertible preferred stock with a warrant coverage amount equal to 10% and 20% of the principal amount of the notes for the initial and subsequent closings, respectively. In April 2012, the principal and accrued interest of $3,188,494 on these notes were converted to 63,769,863 shares of Series B convertible preferred stock at a conversion price of $0.05 per share.

In November 2011 (“November 2011 note”), the Company issued a convertible promissory note for $250,000 in two closings during November 2011 and December 2011 for an aggregate of $500,000. The note bears an interest rate of 8%. In conjunction with the notes, the Company issued a warrant to investors to purchase Series B convertible preferred stock with a warrant coverage amount equal to 20% of the principal amount of the notes for each of the closings, respectively.

In January 2012 and March 2012, the Company amended the November 2011 notes to provide the sale and issuance of up to $500,000 of convertible promissory notes and warrants under the same terms as the original agreement. In three separate closings during January 2012, February 2012 and April 2012, convertible promissory notes totaling $1,000,000 were issued. In conjunction with the notes, the Company issued a warrant to investors to purchase Series B convertible preferred stock with a warrant coverage amount equal to 20% of the principal amount of the notes for each of the closings, respectively. The aggregate principal amount of the November 2011 notes including the January and March amendments was $1,500,000, prior to the conversion. In April, 2012, the principal and accrued interest of $1,521,474 on these notes were converted to 30,429,485 shares of Series B convertible preferred stock at a conversion price of $0.05 per share.

In April 2012, June 2012 and July 2012, the Company issued an aggregate of 171,199,348 shares of Series B convertible preferred stock at a purchase price of $0.05 per share, which included 94,199,348 shares being issued upon the conversion of principal and accrued interest of $4,709,968 on the May 2011 notes and November 2011 notes.

In November 2012, the Company issued $1,000,000 in convertible promissory notes to related parties. The notes accrue interest at 8% per annum and mature at the earlier of the date upon which the majority note holders demand repayment after May 15, 2013 or the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000. As of December 31, 2012 and 2013, the outstanding principal balance was $1,000,000. Because the holders have the ability to demand repayment after May 15, 2013, the Company has classified all of the outstanding debt balance and related accrued interest of $8,987 and $88,986 as a current liability as of December 31, 2012 and 2013, respectively.

F-43

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________  

6. Related Party Convertible Bridge Notes, continued

On February 13, 2013, the Company entered into a note purchase agreement (“2013 Note Purchase Agreement”) with related parties to which it was authorized to issue and sell convertible promissory notes up to $1,500,000 in the aggregate, of which $1,000,000 was issued. These notes were intended as bridge financing to a planned alternative public offering (“APO”) in the second quarter of 2013. The notes accrue interest at 8% per annum and mature at the earlier of the date upon which the majority note holders demand repayment after August 13, 2013 or the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000 excluding the conversion of these notes and the November 2012 notes. The notes convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which is defined as 80% of the purchase price in the qualified financing. If the Company does not execute a qualified financing, the holders may elect conversion of the notes prior to the maturity date of August 13, 2013. Under the elective conversion, the notes convert into the number of the next equity financing shares or shares of Series B convertible preferred stock that are equal to the principal and the unpaid accrued interest divided by the conversion price. The conversion price is defined as 80% of the price paid by the investors in the next equity financing series or $0.05, if the notes are converted into the Series B convertible preferred stock. In April 2013, the Company completed another closing of the 2013 Note Purchase Agreement for $500,000. On June 3, 2013, the Company entered into an amendment to the 2013 Note Purchase Agreement to increase the total amount of the convertible promissory notes up to $2,000,000 in the aggregate if issued before June 30, 2013. In June 2013, the Company completed another closing of the 2013 Note Purchase Agreement for $500,000. On August 7, 2013, the Company entered into an amendment to the 2013 Note Purchase Agreement to increase the total amount of the convertible promissory notes up to $2,500,000 in the aggregate if issued before August 28, 2013. In August 2013, the Company completed another closing of the 2013 Note Purchase Agreement for $500,000. As of December 31, 2013, the outstanding principal balance was $2,500,000. Because the holders have the ability to demand repayment after August 13, 2013, the Company has classified all of the outstanding debt balance and related accrued interest of $130,466 as a current liability as of December 31, 2013.

On September 27, 2013, the Company entered into a note purchase agreement (“September 2013 Note Purchase Agreement”) with related parties to which it was authorized to issue and sell convertible promissory notes up to $500,000 in the aggregate. These notes were intended as bridge financing to a planned alternative public offering (“APO”) in the third quarter of 2013. The notes accrue interest at 8% per annum and mature at the earlier of the date upon which the majority note holders demand repayment after March 31, 2014 or the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000 excluding the conversion of these notes, the November 2012 notes and the 2013 Note Purchase Agreement. The notes convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which is defined as 70% of the purchase price in the qualified financing. If the Company does not execute a qualified financing, the holders may elect conversion of the notes prior to the maturity date of March 31, 2014. Under the elective conversion, the notes convert into the number of the next equity financing shares or shares of Series B convertible preferred stock that are equal to the principal and the unpaid accrued interest divided by the conversion price. The conversion price is defined as 70% of the price paid by the investors in the next equity financing series or $0.05, if the notes are converted into the Series B convertible preferred stock. As of December 31, 2013, the outstanding principal balance was $500,000. Because the holders have the ability to demand repayment after March 31, 2014, the Company has classified all of the outstanding debt balance and related accrued interest of $10,411 as a current liability as of December 31, 2013.

F-44

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________

6. Related Party Convertible Bridge Notes, continued

On November 12, 2013, the Company entered into a note purchase agreement (“November 2013 Note Purchase Agreement”) with related parties to which it was authorized to issue and sell convertible promissory notes up to $500,000 in the aggregate. These notes were intended as bridge financing to a planned alternative public offering (“APO”) in the forth quarter of 2013. The notes accrue interest at 8% per annum and mature at the earlier of the date upon which the majority note holders demand repayment after March 31, 2014 or the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000 excluding the conversion of these notes, the November 2012 notes and the 2013 Note Purchase Agreement. The notes convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which is defined as 70% of the purchase price in the qualified financing. If the Company does not execute a qualified financing, the holders may elect conversion of the notes prior to the maturity date of March 31, 2014. Under the elective conversion, the notes convert into the number of the next equity financing shares or shares of Series B convertible preferred stock that are equal to the principal and the unpaid accrued interest divided by the conversion price. The conversion price is defined as 70% of the price paid by the investors in the next equity financing series or $0.05, if the notes are converted into the Series B convertible preferred stock. As of December 31, 2013, the outstanding principal balance was $500,000. Because the holders have the ability to demand repayment after March 31, 2014, the Company has classified all of the outstanding debt balance and related accrued interest of $5,370 as a current liability as of December 31, 2013.

On December 27, 2013, the Company entered into a note purchase agreement (“December 2013 Note Purchase Agreement”) with related parties to which it was authorized to issue and sell convertible promissory notes up to $375,000 in the aggregate. These notes were intended as bridge financing to a planned alternative public offering (“APO”) in the first quarter of 2014. The notes accrue interest at 9% per annum and mature at the earlier of the date upon which the majority note holders demand repayment after March 31, 2014 or the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000 excluding the conversion of these notes, the November 2012 notes and the 2013 Note Purchase Agreement. The notes convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which is defined as 70% of the purchase price in the qualified financing. If the Company does not execute a qualified financing, the holders may elect conversion of the notes prior to the maturity date of March 31, 2014. Under the elective conversion, the notes convert into the number of the next equity financing shares or shares of Series B convertible preferred stock that are equal to the principal and the unpaid accrued interest divided by the conversion price. The conversion price is defined as 70% of the price paid by the investors in the next equity financing series or $0.05, if the notes are converted into the Series B convertible preferred stock. As of December 31, 2013, the outstanding principal balance was $375,000. Because the holders have the ability to demand repayment after March 31, 2014, the Company has classified all of the outstanding debt balance and related accrued interest of $370 as a current liability as of December 31, 2013.

F-45

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________

6. Related Party Convertible Bridge Notes, continued

Pursuant to the Company’s amendment to the note purchase agreement dated November 20, 2012, effective February 13, 2013, the above notes payable would be redeemable upon a change of control of the Company at an amount equal to 300% of the outstanding principal amount and accrued and unpaid interest on the notes as of the time of a change of control. A change of control will occur in the event the Company enters into a transaction where the holders of the voting securities no longer own a majority of the total outstanding voting securities once the transaction is completed or a disposition of substantially all assets occurs. The sale of stock for capital raising purposes or an alternative public offering involving a reverse merger into a public shell company for capital raising purposes is excluded from the Company’s definition of a change of control. The Company has determined that the value of this provision is not material and as such has not recorded a liability on the Company’s financial statements as of December 31, 2012 and 2013.

7. Commitments and Contingencies

Operating Lease

In January 2012, the Company relocated and entered into a lease agreement for a new facility. The new lease commenced in March 2012 and will terminate in February 2015. Rent expense for the years ended December 31, 2012 and 2013 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2013 was $166,398, $173,896, and $744,602, respectively.

At December 31, 2013, future minimum payments under the lease are as follows:

Year Ending December 31,
2014	$	184,002
2015		30,952
	$	214,954

F-46

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________ 

7. Commitments and Contingencies, continued

Indemnification Agreements

The Company enters into standard indemnification arrangements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with performance of services within the scope of the agreement, breach of the agreement by the Company, or noncompliance of regulations or laws by the Company, in all cases provided the indemnified party has not breached the agreement and/or the loss is not attributable to the indemnified party’s negligence or willful malfeasance. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these arrangements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the estimated fair value of these agreements is minimal.

Contingencies

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

8. Common Stock

In April 2012, the Company amended and restated its Certificate of Incorporation to increase the number of authorized common stock to 612,000,000 shares. The common stockholders, voting as a separate class, are entitled to elect one member of the Company’s Board of Directors. The preferred stockholders also have rights to elect two members of the Board of Directors. Pursuant to these rights, both classes of stock will vote together as one class to elect all remaining directors. The holders of common stock are also entitled to receive dividends whenever funds are legally available, as, when, and if declared by the Board of Directors. As of December 31, 2013, no dividends have been declared to date. Additionally, shares of common stock were issued under restricted stock purchase agreements. These shares are subject to a right of repurchase by the Company, which typically lapses over a four year period. In June 2009, the Company repurchased 565,833 shares of common stock. As of December 31, 2012 and 2013, the Company had 194,441 and 666 shares of common stock, respectively, subject to repurchase.

As of December 31, 2013, the Company had reserved common stock for future issuance as follows:

Conversion of Series A convertible preferred stock	291,132,255
Conversion of Series B convertible preferred stock	171,199,348
Exercise of options under stock plan	45,146,118
Issuance of options under stock plan	36,449,336
Exercise and conversion of convertible preferred stock warrants	24,299,963
	568,227,020

9. Convertible Preferred Stock

In April 2012, the Company amended and restated its Certificate of Incorporation to decrease the number of authorized Series A convertible preferred stock (“Series A”) to 24,543,626 and create a new series of preferred stock, to be designated Series B convertible preferred stock (“Series B”), consisting of 227,000,000 authorized shares.

The holders of preferred stock have various rights and preferences as follows:

Dividends

The preferred stockholders are entitled to receive, when and as declared by the Board of Directors, out of funds legally available, cash dividends in the amount of $0.0488 and $0.004, respectively, per share, per year for each share of Series A and Series B outstanding in preference and priority to any declaration or payment of any distribution on common stock in such calendar year. These dividends are noncumulative. No distributions shall be made to common stock unless all declared dividends on preferred stock have been paid or set aside for payment. No dividends have been declared to date.

Liquidation

Upon liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the holders of the Series A and Series B are entitled to receive an amount per share equal to the original issuance price for the preferred stock (as adjusted for any stock dividends, stock splits or recapitalization and similar events), plus all declared and unpaid dividends thereon to the date fixed for such distribution. If upon the liquidation event, there are insufficient funds to permit the payment to stockholders of the full preferential amounts, then the entire assets and funds of the Company will be distributed ratably among the holders of preferred stock.

F-47

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________ 

9. Convertible Preferred Stock, continued

Conversion

At the option of the holder thereof, each share of preferred stock shall be convertible, at the option of the holder at any time after the date of issuance into fully paid and non-assessable shares of common stock as determined by dividing the applicable original issue price for such series by the conversion price for such series. The conversion price is $0.05 for Series A and Series B.

Each share of preferred stock shall automatically be converted into shares of common stock at their respective conversion price immediately upon the earlier of (A) immediately prior to the closing of a firm commitment underwritten initial public offering pursuant to a registration statement under the Securities Act of 1933 covering the offering and sale of the Company’s common stock provided the aggregate gross proceeds to the Company and/or selling stockholders are not less than $30,000,000 prior to underwriters’ commissions and expenses, or (B) upon receipt of a written request for conversion from the holders of a majority of the voting power of the outstanding shares of preferred stock.

Voting

Each holder of preferred stock shall be entitled to the number of votes equal to the number of shares of common stock into which such holder’s shares of preferred stock could be converted as of the record date. The holders of shares of the preferred stock shall be entitled to vote on all matters on which the common stock shall be entitled to vote. The holders of preferred stock, voting as a separate class, shall be entitled to elect two members of the Board of Directors. The holders of common stock, voting as a separate class, shall be entitled to elect one member of the Board of Directors. Any additional members of the Board of Directors shall be elected by the holders of common stock and preferred stock, voting together as a single class.

Warrants for Convertible Preferred Stock

In connection with the issuance of Series A in August 2007, the investors acquired the rights to purchase additional shares of Series A at $0.61 per share. Such rights lapsed upon the achievement of certain milestones which occurred in April 2009. The Company calculated the fair value of these rights to be $357,829 using the Black-Scholes option pricing model with the following assumptions: dividend yield of 0%, expected volatility of 46%, risk free interest rate of 3.9% and a contractual life of 1.4 years. This amount was revalued as of December 31, 2007 and 2008 and $23,143 and $266,293 was recorded to other income (expense), net, respectively. The warrant was revalued upon the achievement of the milestones and $68,393 was recorded to other income (expense), net, during the year ended December 31, 2009.

F-48

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________ 

9. Convertible Preferred Stock, continued

Warrants for Convertible Preferred Stock, continued

In connection with the loan and security agreement entered into in December 2008, the Company issued a warrant to purchase a total of 196,721 shares of Series A at an exercise price of $0.61 per share. The warrant has a contractual life of ten years and is exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrant on the date of issuance to be $53,863 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 79%, risk free interest rate of 2.7% and a contractual life of ten years. The warrant expires on December 2, 2018. The fair value of the warrant was recorded as a debt issuance cost in other assets and was amortized to interest expense over the draw down term of the loan. The entire amount of the warrant was amortized to interest expense in the year ended December 31, 2008. The fair value of the warrant was re-measured as of December 31, 2012 and 2013 and ($4,131) and $6,885 were recorded to other income (expense), net, respectively, and $9,797 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In connection with the Series A offering in 2009, the Company issued warrants to purchase 245,900 shares of Series A for $0.61 per share in April 2009. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the fair value of the warrants on the date of issuance to be $70,082 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 79%, risk free interest rate of 2.8% and a contractual life of ten years. The warrants expire on April 2, 2019. The fair value of the warrants was recorded as an equity issuance cost. The fair value of the warrants was re-measured as of December 31, 2012 and 2013 and ($5,900) and $8,607 were recorded to other income (expense), net, respectively, and $11,804 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In connection with the loan and security agreement entered into in November 2010, the Company issued a warrant to purchase a total of 163,934 shares of Series A at an exercise price of $0.61 per share. The warrant has a contractual life of ten years and is exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrant on the date of issuance to be $46,721 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 79%, risk free interest rate of 2.9% and a contractual life of ten years. The warrant expires on November 19, 2020. The fair value of the warrant was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrant was re-measured as of December 31, 2012 and 2013 and ($6,485) and $2,131 were recorded to other income (expense), net, respectively, and $328 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In connection with the loan and security agreement entered into in April 2012, the Company issued a warrant to purchase a total of 73,770 shares of Series A at an exercise price of $0.61 per share. The warrant has a contractual life of ten years and is exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrant on the date of issuance to be $27,443 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 92%, risk free interest rate of 1.98% and a contractual life of ten years. The warrant expires on April 19, 2022. The fair value of the warrant was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrant was re-measured as of December 31, 2012 and 2013 and $591 and $1,918 was recorded to other income (expense), net, respectively, and $2,509 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

F-49

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________

9. Convertible Preferred Stock, continued

Warrants for Convertible Preferred Stock, continued

In May 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 2,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $84,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 3.2% and a contractual life of ten years. The warrants expire on May 9, 2021. The fair value of the warrants was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of December 31, 2012 and 2013 and $23,000 and $6,000 were recorded to other income (expense), net, respectively, and $30,000 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In June 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 4,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $168,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 3.2% and a contractual life of ten years. The warrants expire on June 30, 2021. The fair value of the warrants was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of December 31, 2012 and 2013 and $46,000 and $12,000 were recorded to other income (expense), net, respectively, and $60,000 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In September 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 4,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $168,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 2.0% and a contractual life of ten years. The warrants expire on September 9, 2021. The fair value of the warrants was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of December 31, 2012 and 2013 and $46,000 and $12,000 was recorded to other income (expense), net, respectively, and $60,000 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

F-50

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________ 

9. Convertible Preferred Stock, continued

Warrants for Convertible Preferred Stock, continued

In November 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 1,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $42,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 2.1% and a contractual life of ten years. The warrants expire on November 30, 2021. The fair value of the warrants was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of December 31, 2012 and 2013 and $11,000 and $2,000 were recorded to other income (expense), net, respectively, and $14,000 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In December 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 1,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $41,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 1.8% and a contractual life of ten years. The warrants expire on December 19, 2021. The fair value of the warrants was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of December 31, 2012 and 2013 and $11,000 and $2,000 were recorded to other income (expense), net, respectively, and $13,000 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In January 2012, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 910,445 shares of Series B at an exercise price of $0.05 per share. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $37,328 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 1.8% and a contractual life of ten years. The warrants expire on January 1, 2022. The fair value of the warrants was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of December 31, 2012 and 2013 and $7,283 and $1,821 was recorded to other income (expense), net, respectively, and $9,104 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

F-51

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________

9. Convertible Preferred Stock, continued

Warrants for Convertible Preferred Stock, continued

In February 2012, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 738,535 shares of Series B at an exercise price of $0.05 per share. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $31,018 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 1.98% and a contractual life of ten years. The warrants expire on February 27, 2022. The fair value of the warrants was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of December 31, 2012 and 2013 and $6,646 and $1,477 was recorded to other income (expense), net, respectively, and $8,123 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In April 2012, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 2,351,019 shares of Series B at an exercise price of $0.05 per share. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $98,743 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 2.0% and a contractual life of ten years. The warrants expire on April 16, 2022. The fair value of the warrants was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of December 31, 2012 and 2013 and $21,159 and $4,702 was recorded to other income (expense), net, respectively, and $25,861 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

Convertible preferred stock warrants outstanding as of December 31, 2012 were as follows:

	Series				Number of		Fair Value as of
	Exercisable	Expiration	Exercise		Warrants		December 31,
Issuance Date	for	Date	Price		Outstanding		2012
December 2008	Series A	December 2, 2018	$	0.61		196,721	$	50,951
April 2009	Series A	April 2, 2019		0.61		245,900		66,885
November 2010	Series A	November 19, 2020		0.61		163,934		48,524
May 2011	Series B	May 6, 2021		0.05		2,000,000		60,000
June 2011	Series B	June 30, 2021		0.05		4,000,000		120,000
September 2011	Series B	September 9, 2021		0.05		4,000,000		120,000
November 2011	Series B	November 30, 2021		0.05		1,000,000		30,000
December 2011	Series B	December 19, 2021		0.05		1,000,000		30,000
January 2012	Series B	January 31, 2022		0.05		910,445		30,045
February 2012	Series B	February 28, 2022		0.05		738,535		24,372
April 2012	Series B	April 16, 2022		0.05		2,351,019		77,584
April 2012	Series A	April 19, 2022		0.61		73,770		26,852
						16,680,324	$	685,213

F-52

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________ 

9. Convertible Preferred Stock, continued

Warrants for Convertible Preferred Stock, continued

Convertible preferred stock warrants outstanding as of December 31, 2013 were as follows:

	Series				Number of		Fair Value as of
	Exercisable	Expiration	Exercise		Warrants		December 31,
Issuance Date	for	Date	Price		Outstanding		2013
December 2008	Series A	December 2, 2018	$	0.61		196,721	$	44,066
April 2009	Series A	April 2, 2019		0.61		245,900		58,278
November 2010	Series A	November 19, 2020		0.61		163,934		46,393
May 2011	Series B	May 6, 2021		0.05		2,000,000		54,000
June 2011	Series B	June 30, 2021		0.05		4,000,000		108,000
September 2011	Series B	September 9, 2021		0.05		4,000,000		108,000
November 2011	Series B	November 30, 2021		0.05		1,000,000		28,000
December 2011	Series B	December 19, 2021		0.05		1,000,000		28,000
January 2012	Series B	January 31, 2022		0.05		910,445		28,224
February 2012	Series B	February 28, 2022		0.05		738,535		22,895
April 2012	Series B	April 16, 2022		0.05		2,351,019		72,882
April 2012	Series A	April 19, 2022		0.61		73,770		24,934
						16,680,324	$	623,672

10. Stock Option Plan

In February 2006, the Company adopted the 2006 Stock Option Plan (the “Plan”) under which the Board of Directors may issue incentive and nonqualified stock options to employees, directors, and consultants. The Board of Directors has the authority to determine to whom options will be granted, the number of options, the term and the exercise price. If an individual owns stock representing more than 10% of the outstanding shares, the price of each option shall be at least 110% of the fair market value, as determined by the Board of Directors. The exercise price of an incentive stock option and a nonqualified stock option shall not be less than 100% and 85%, respectively, of the fair market value of the common stock on the date of grant. All options granted have a term of ten years, other than options granted to individuals holding more than 10% of the total outstanding shares which have a term of five years. Options granted generally vest over four years.

F-53

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________ 

10. Stock Option Plan, continued

Activity under the Plan is as follows:

				Outstanding Options
									Weighted-
	Shares						Weighted-		Average
	Available			Number			Average		Remaining
	for			of			Exercise		Contractual
	Grant			Shares			Price		Term (years)
Shares reserved at plan inception		1,000,000			-		$	-
Options granted		(51,500	)		51,500			0.001
Balances as of December 31, 2006		948,500			51,500			0.001		9.96
Additional shares reserved		2,000,000			-			-
Options granted		(867,000	)		867,000			0.06
Options forfeited		5,000			(5,000	)		0.001
Balances as of December 31, 2007		2,086,500			913,500			0.06		9.82
Options granted		(72,500	)		72,500			0.06
Balances as of December 31, 2008		2,014,000			986,000			0.06		8.87
Options granted		(1,892,029	)		1,892,029			0.06
Options exercised		-			(322,395	)		0.06
Options forfeited		377,605			(377,605	)		0.06
Balances as of December 31, 2009		499,576			2,178,029			0.06		9.00
Additional shares reserved		461,957			-			-
Options granted		(771,412	)		771,412			0.05
Options exercised		-			(173,455	)		0.001
Options forfeited		12,500			(12,500	)		0.06
Balances as of December 31, 2010		202,621			2,763,486			0.06		8.40
Additional shares reserved		500,000			-			-
Options granted		(345,000	)		345,000			0.12
Options exercised		-			(9,000	)		0.001
Options forfeited		139,000			(139,000	)		0.06
Repurchase of restricted stock options		5,250			-
Balances as of December 31, 2011		501,871			2,960,486			0.07		7.70
Additional shares reserved		80,000,000			-			-
Options granted		(43,694,521	)		43,694,521			0.01
Options exercised		-			(1,866,903	)		0.07
Balances as of December 31, 2012		36,807,350			44,788,104			0.01		9.74
Options granted		(11,873,890	)		11,873,890			0.01
Options cancelled		11,515,876			(11,515,876	)		0.01
Balances as of December 31, 2013		36,449,336			45,146,118		$	0.01		8.80
Options vested and expected to vest as of December 31, 2013					43,338,910		$	0.01		8.80
Options vested as of December 31, 2013					15,025,985		$	0.02		8.60

F-54

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________ 

10. Stock Option Plan, continued

The options outstanding and exercisable as of December 31, 2013 are as follows:

		Options Outstanding				Options Vested
				Weighted-
				Average				Weighted-
				Remaining				Average
Exercise		Number		Contractual		Number		Exercise
Price		Outstanding		Life (Years)		of Options		Price
$	0.001		40,000		2.95		40,000	$	0.001
	0.06		980,250		5.68		921,104		0.06
	0.15		514,833		7.94		447,055		0.15
	0.01		43,611,035		8.89		13,617,826		0.01
			45,146,118		8.80		15,025,985	$	0.02

Stock-Based Compensation Associated with Awards to Employees

During the years ended December 31, 2012 and 2013, the Company granted stock options to employees to purchase 38,996,262 and 11,788,890 shares of common stock with a weighted-average grant date fair value of $0.03262 and $0.00559 per share, respectively. Stock-based compensation expense recognized during the years ended December 31, 2012 and 2013 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2013, includes compensation expense for stock-based awards granted to employees of $102,511, $94,021 and $282,032 respectively. As of December 31, 2013, there was total unrecognized compensation costs of $129,937 related to these stock options. These costs are expected to be recognized over a period of approximately 1.74 years. The total fair value of employee options vested during the years ended December 31, 2012 and 2013 was $54,199 and $139,914, respectively. The aggregate intrinsic value of options outstanding and exercisable as of December 31, 2012 and 2013 was $2,322 and $322, respectively. The aggregate intrinsic value of options exercised during the years ended December 31, 2012 and 2013 was $0.

The Company estimated the fair value of stock options using the Black-Scholes option pricing model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period of the awards. The fair value of employee stock options granted was estimated using the following assumptions:

							Cumulative for the Period
							September 21, 2005
							(Date of Inception) to
	2012			2013			December 31, 2013
Expected term (in years)		5.00			5.00			5.00 - 6.25
Expected volatility		68	%		67	%		60% - 79	%
Risk-free interest rate		0.76% - 0.84	%		0.84	%		0.76% - 4.7	%
Dividend yield		0	%		0	%		0	%

F-55

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________ 

10. Stock Option Plan, continued

Expected Term

The expected term of stock options represents the weighted-average period the stock options are expected to remain outstanding. The Company derived the expected term based on expected terms for similar entities, referred to as “guideline” companies, as the Company did not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. In evaluating similarity, the Company considered factors such as industry, stage of life cycle and size.

Volatility

Since the Company is a private entity with no historical data regarding the volatility of its common stock, the expected volatility used is based on volatility of similar entities, referred to as “guideline” companies. In evaluating similarity, the Company considered factors such as industry, stage of life cycle and size.

Risk-Free Interest Rate

The risk-free rate is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options.

Dividend Yield

The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future and, therefore, used an expected dividend yield of zero in the valuation model.

Forfeitures

The Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest. All stock-based payment awards are amortized on a straight-line basis over the requisite service periods of the awards, which are generally the vesting periods. If the Company’s actual forfeiture rate is materially different from its estimate, the stock-based compensation expense could be significantly different from what the Company has recorded in the current period.

F-56

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________ 

10. Stock Option Plan, continued

Stock-Based Compensation for Nonemployees

During the years ended December 31, 2012 and 2013, the Company granted options to purchase 4,698,259 and 85,000 shares of common stock to nonemployees, respectively. Stock-based compensation expense related to stock options granted to nonemployees is recognized as the stock options are earned. The Company believes that the fair value of the stock options is more reliably measurable than the fair value of the services received. The stock-based compensation expense will fluctuate as the estimated fair value of the common stock fluctuates. During the years ended December 31, 2012 and 2013 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2013, the Company recorded $6,686, ($6,593) and $9,183, respectively, of stock-based compensation expense related to nonemployees. The fair value of nonemployee stock options granted was estimated using the following assumptions:

					Cumulative for the Period
					September 21, 2005
					(Date of Inception) to
	2012		2013		December 31, 2013
Contractual term (in years)		4 - 10		3 - 10		3 - 10
Expected volatility		68%		67%		60% - 79%
Risk-free interest rate		0.72% - 1.78%		0.78% - 3.04%		0.56% - 4.7%
Dividend yield		0%		0%		0%

11. Income Taxes

The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets are as follows:

	2012			2013
Net operating loss carryforwards	$	3,951,000		$	4,203,000
Research and development credits		162,000			162,000
Start-up expenses capitalized		5,726,000			7,156,000
Accruals and reserves		150,000			99,000
Property and equipment		(22,000	)		(11,000	)
		9,967,000			11,609,000
Less: Valuation allowance		(9,967,000	)		(11,609,000	)
	$	-		$	-

Based on a number of factors, including the lack of history of profits and the fact that the Company competes in a developing market that is characterized by rapidly changing technology, management believes that there is sufficient uncertainty regarding the realization of deferred tax assets such that a full valuation allowance has been provided. The valuation allowance increased by $1,789,000 and $1,642,000 during the years ended December 31, 2012 and 2013, respectively.

F-57

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________ 

11. Income Taxes, continued

As of December 31, 2013, the Company had net operating loss carryforwards of approximately $10,554,000 and $10,543,000 available to offset future taxable income, if any, for both federal and California state income tax purposes, respectively. The Company’s federal and state net operating loss carryforwards begin to expire in 2027 and 2017, respectively, and valuation allowances have been provided, where necessary.

As of December 31, 2013, the Company also had federal and state research and development credit carryforwards of approximately $142,000 and $136,000, respectively, available to reduce future taxable income. The federal credit carryforward begins to expire in 2027, the California credit will carryforward indefinitely and valuation allowances have been provided, where necessary.

Utilization of the net operating loss carryforward may be subject to an annual limitation due to the ownership percentage change limitations provided by the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of the net operating loss before utilization.

No liability related to uncertain tax positions is recorded on the financial statements. As of December 31, 2013, the Company had an unrecognized tax benefit of $70,000. It is the Company’s policy to include penalties and interest expense related to income taxes as a component of other expense and interest expense, respectively, as necessary.

All of the Company’s tax years will remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating loss or credits.

12. Related Party Transactions

From March 2006 through March 2008, the Company leased office space from the Company’s then Chief Executive Officer. Rent payments made to the Chief Executive Officer for the year ended December 31, 2008 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2008 were $12,000 and $72,391, respectively. There were no rental payments made to the Chief Executive Officer after March 2008.

In June 2006, the Company entered into a Development and Manufacturing Agreement with Stellartech Research Corporation (the “Agreement”). The Agreement was amended on October 4, 2007. Under the Agreement, Viveve agreed to purchase 300 units of generators manufactured by Stellartech. In conjunction with the Agreement, Stellartech purchased 300,000 shares of common stock at par value. These shares were subject to a right of repurchase by the Company, which lapsed over a four-year period. As of December 31, 2012, none of the shares of common stock were subject to repurchase. Under the Agreement, the Company has paid Stellartech $325,936, $33,000 and $6,920,619 for goods and services in the years ended December 31, 2012 and 2013 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2013, respectively.

F-58

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________ 

12. Related Party Transactions, continued

In April 2012, the Viveve-Parmer Arbitration (a dispute between the Company and its original Chief Executive Officer) was settled and resulted in the award and judgment in favor of Dr. Parmer. In accordance with the Settlement Agreement and General Release, the Company paid Dr. Parmer $1,000,000, less applicable withholdings (payment executed April 20, 2012), issued a subordinated unsecured note of $150,000 payable in three equal installments on March 31, 2013, June 30, 2013 and September 30, 2013, all of which were paid, and issued 754,635 shares of restricted common stock. In addition, if the Company closes an equity financing, the Company shall issue Dr. Parmer a number of shares equal to $150,000 divided by the price per share.

In June 2012, the Company entered into a Supply and Purchase Agreement with Donna Bella International, Limited (“Donna Bella”). Under the agreement, Donna Bella will have exclusivity to purchase the Company’s products in Hong Kong, provided Donna Bella purchases $1,000,000 of the Company’s Series B. In addition, Donna Bella will have exclusivity to purchase the Company’s products in China, provided that (a) Donna Bella purchases $1,000,000 of the Company’s Series B and (b) the Company obtains registration with the State Food and Drug Administration (“SFDA”) for its products with the assistance of Donna Bella. The parties agree to negotiate minimum purchases for the China market upon receipt of SFDA clearance. Donna Bella agrees to designate a subsidiary of Donna Bella in China with legal independent legal standing, to assist the Company in obtaining the registration with SFDA at Donna Bella’s subsidiary’s cost. Such designated subsidiary of Donna Bella shall start the registration process on behalf of the Company immediately after the signing of this agreement, subject to the request of and approval by the Company. In July 2012, Donna Bella purchased $1,000,000 of the Company’s Series B.

On March 14, 2013, the Company entered into a Separation and Release Agreement with a former executive officer (the “Separation Agreement”). In accordance with the terms and conditions of the Separation Agreement, the employee resigned as an officer of the Company and observer to the Company’s Board of Directors. The Company agreed to pay a severance payment equal to an aggregate of $271,346 (the “Severance Payment”) payable as follows: (1) $25,000 for each month for the ten months following April 15, 2013 (the “Separation Date”) and (2) $21,346 for the 11th month following the Separation Date. In the event that the employee engages in any activities that compete with the Company anytime during the eleven months following the Separation Date, the Company’s obligation to pay any further amounts in connection with the Severance Payment shall cease.

In addition to the above, an aggregate of 5,278,330 options of the 11,015,646 options previously granted to the former executive officer vested effective as of the Separation Date. The former executive officer agreed to release and discharge the Company from any and all claims, debts, obligations or liabilities, known and unknown, which relate to employment with the Company or the termination of that employment.

13. Subsequent Events

On January 31, 2014, the Company and lender agreed to further amend the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more on or before February 25, 2014 and consummation of an equity event by April 25, 2014. On February 25, 2014, a further extension to defer principal payments through March 31, 2014 was verbally agreed upon.

F-59

VIVEVE, INC.

(a development stage enterprise)

NOTES TO FINANCIAL STATEMENTS

as of and for the years ended December 31, 2012 and 2013 and, cumulatively, for the period

from September 21, 2005 (Date of Inception) to December 31, 2013

____________ 

13. Subsequent Events, continued

On March 5, 2014, the Company entered into a note purchase agreement in which it was authorized to issue and sell convertible promissory notes up to $500,000 in the aggregate of which $100,000 was issued on March 5, 2014. The notes accrue interest at 9% per annum and will convert into a subsequent equity financing, which the Company expects to complete by June 30, 2014.

The Company has evaluated all events occurring subsequent to December 31, 2013 through March 18, 2014, the date these accompanying financials were available to be issued and did not identify any additional material recognizable subsequent events.

F-60

VIVEVE MEDICAL, INC.

12,347,121 Shares

Common Stock

PROSPECTUS

_________________, 2014

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13.     OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the costs and expenses payable by us in connection with the issuance and distribution of the securities being registered. None of the following expenses are payable by the selling stockholders. All of the amounts shown are estimates, except for the Commission registration fee.

SEC registration fee	$	645.63
Legal fees and expenses*	$	*35,000
Accounting fees and expenses*	$	*15,000
Miscellaneous*	$	*2,500
TOTAL	$	53,145.63

*Estimated

ITEM 14.     INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Yukon Business Corporation Act (the “Business Corporations Act”), Section 126, enables a corporation to indemnify a director or officer or a former director or officer of the corporation, or a person who acts or acted at the corporation’s request as a director or officer of a body corporate of which the corporation is or was a stockholder or creditor, and his heirs and personal representatives (collectively, a “Person”), against all costs, charges and expenses, including an amount paid to settle an action or to satisfy a judgment reasonably incurred by him in any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been such a director or officer if:

(a)     he acted honestly and in good faith with a view to the best interests of the corporation; and

(b)     in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful.

The Business Corporations Act also enables a corporation, with the approval of the Supreme Court of the Yukon Territory, to indemnify a Person in respect of an action by or on behalf of the corporation or body corporate to procure a judgment in its favor, to which he is made a party by reason of being or having been a director or officer of the corporation or body corporate, against all costs, charges and expenses reasonably incurred by him in connection with the action if he fulfills the conditions set forth in subparagraphs (a) and (b) above. Furthermore, the Business Corporation Act provides that a Person is entitled to indemnity from the corporation in respect of all costs, charges and expenses reasonably incurred by him in connection with the defense of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a director or officer of the corporation or body corporate if the person seeking indemnification:

(a)     fulfills the conditions set forth in subparagraphs (a) and (b) above;

(b)     was substantially successful on the merits in his defense of the action or proceeding; and

(c)     is fairly and reasonably entitled to indemnity.

The Business Corporations Act also provides that a corporation may purchase and maintain insurance for the benefit of a Person against liability incurred by him:

(a)     in his capacity as a director or officer of the corporation, except when the liability relates to his failure to act honestly and in good faith with a view to the best interests of the corporation; or

(b)     in his capacity as a director or officer of another body corporate if he acts or acted in that capacity at the corporation’s request, except where the liability relates to his failure to act honestly and in good faith with a view to the best interests of the body corporate.

Our bylaws provide that none of our directors shall be liable for the acts, receipts, neglects or defaults of any other director or officer or employee, or for joining in any receipt or other act for conformity, or for any loss, damage or expense happening to us through the insufficiency or deficiency of title to any property acquired for or on behalf of us, or for the insufficiency or deficiency of any security in or upon which any of our moneys shall be invested, or for any loss or damage arising from the bankruptcy, insolvency or tortuous acts of any person with whom any of the our moneys, securities or effects are deposited, or for any loss occasioned by any error of judgment or oversight on his or her part, or for any other loss, damage or misfortune whatever which shall happen in the execution of the duties of his or her office or in relation thereto, unless the same are occasioned by his or her own willful neglect or default or from any breach of his or her duty to act in accordance with the Business Corporations Act and the regulations thereunder.

Our bylaws provide that, subject to the limitations contained in the Business Corporations Act, and to the extent he or she is otherwise fairly and reasonably entitled thereto, we shall indemnify a director or officer, a former director or officer, or a person who acts or acted our request as a director or officer of a body corporate of which we are or were a shareholder or creditor (or a person who undertakes or has undertaken any liability on behalf of us or any such body corporate) and his or her heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him or her in respect of any civil, criminal or administrative action or proceeding to which he or she is made a party by reason of being or having been our director or officer or such body corporate, if

(1)     he or she acted honestly and in good faith with a view to our best interests; and

(2)     in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he or she had reasonable grounds for believing that his or her conduct was lawful.

Furthermore, our bylaws provide that directors may rely upon the accuracy of any statement of fact represented by an officer of the Company to be correct or upon statements in a written report of the Company’s auditor and shall not be responsible or held liable for any loss or damage resulting from the paying of any dividends or otherwise acting in good faith upon any such statement.

Our bylaws also provide that subject to the limitations contained in the Business Corporations Act, we may purchase and maintain insurance for the benefit of our directors and officers as the board of directors may from time to time determine. We have obtained on behalf of our directors and officers insurance protection against certain liabilities arising out of the discharge of their duties. However, to the extent such coverage is inadequate to cover claims against directors or officers, we may be required pursuant to our bylaws to reimburse the directors or officers for the uninsured portion of such claims.

ITEM 15.     RECENT SALES OF UNREGISTERED SECURITIES.

The securities transactions described below that were entered into prior to September 23, 2014 have been retroactively adjusted to take into account the one-for-100 reverse stock split effective September 23, 2014.

On February 22, 2011, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with GCP IV LLC (“GCP”), an accredited investor, pursuant to which we (i) issued and sold to GCP an aggregate of $4 million in principal amount (the “Principal Amount”) of 5% Senior Secured Convertible Debentures (the “Debentures”), and (ii) we issued to GCP a five-year warrant to purchase up to 4 million shares of our common stock at an exercise price (subject to adjustment) of $15 per share. At any time prior to the repayment of the Principal Amount, GCP had the right to convert any portion of the Principal Amount outstanding into fully-paid and non-assessable restricted shares of our common stock at an initial conversion price of $10 per share. The securities were issued in a transaction that was exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act inasmuch as the securities were offered and sold to a single accredited investor and we did not engage in any form of general solicitation or general advertising in making the offering. In connection with arranging this financing we paid Natixis Bleichroeder, LLC $320,000

On March 6, 2012, we entered into an agreement with Garden State Securities Inc., whereby Garden State Securities, Inc. agreed to provide certain financial advisory services to us in consideration for the issuance of up to 125,000 unregistered shares of our common stock, to be issued as follows: (a) 3,125 shares upon execution of the letter agreement; and (b) 1,042 shares at the end of each month starting on the last day of the fourth month through the twelfth month of the term of the agreement.Also, on March 6, 2012, we entered into a consulting agreement with JFS Investments, Inc., whereby JFS Investments, Inc. agreed to provide certain investor relations and related consulting services to us in consideration for the issuance of up to 125,000 unregistered shares of our  common stock to be issued as follows: (a) 3,125 shares upon execution of the consulting agreement; and (b) 1,042 shares at the beginning of each month starting on the first day of the fourth month through the twelfth month of the term of the agreement. On March 6, 2012 the per share value of our common stock was $35. The securities were issued in a transaction that was exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act inasmuch as the securities were offered and sold to two accredited investors and we did not engage in any form of general solicitation or general advertising in making the offering.

On July 2, 2012 we entered into an Amendment and Waiver to Securities Purchase Agreement (the “Amendment”) with GCP, which amended the Securities Purchase Agreement dated February 22, 2011 described above. Pursuant to the Amendment, we (i) issued and sold to GCP an aggregate of $1 million in principal amount of our 5% Senior Secured Convertible Debentures, (ii) we issued to GCP a five-year warrant to purchase up to 1 million shares of our common stock at an exercise price of $15 per share, and (iii) we issued to GCP a five-year warrant to purchase up to 1 million shares of our common stock at an exercise price of $25 per share. The securities were issued in a transaction that was exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act inasmuch as the securities were offered and sold to a single accredited investor and we did not engage in any form of general solicitation or general advertising in making the offering.

On January 16, 2013 we entered into an Amendment and Waiver to Securities Purchase Agreement with GCP which amends the Securities Purchase Agreement dated as of February 22, 2011, as amended by the Amendment dated July 2, 2012 (both described above), and pursuant to which we (i) sold to GCP an aggregate of $250,000 in principal amount of our 5% Senior Secured Convertible Debentures, and (ii) we issued to GCP a five-year warrant to purchase up to 250,000.shares of our common stock at an exercise price of $15 per share. The securities were issued in a transaction that was exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act inasmuch as the securities were offered and sold to a single accredited investor and we did not engage in any form of general solicitation or general advertising in making the offering.

On February 22, 2013, we entered into Securities Purchase Agreements with accredited investors, whereby we sold an aggregate of 269,333 shares of common stock and warrants to purchase an additional 269,333 shares of common stock with gross proceeds to us of $4,040,000. After payment of placement agent fees to Palladium Capital Advisors and other expenses, we received net proceeds of approximately $3.5 million. Each share of common stock was sold for a purchase price of $15 per share. In addition, each investor also received a five-year warrant to purchase 100% percent of the number of shares of common stock purchased at an exercise price of $20 per share. As part of the fee for its placement agent services, Palladium Capital Advisors also received a warrant to purchase 18,853 shares of our common stock on the same terms and conditions as the investors. The securities were issued in a transaction that was exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder inasmuch as the securities were offered and sold solely to accredited investors and we did not engage in any form of general solicitation or general advertising in making the offering.

Also on February 22, 2013, GCP entered into an Amendment and Waiver Agreement with us pursuant to which GCP agreed to, among other things, (i) increase the number of shares exercisable under the warrants issued to GCP in 2011 and 2012 from 500,000 shares to 815,789 shares and to modify both the exercise price and the “VWAP price” of the warrants to $98 and $155, respectively, (ii) return to us for forfeiture the remaining warrants previously issued to GCP to purchase 125,000 shares of common stock and (iii) relinquish its right to purchase up to an additional $750,000 in debentures under the terms of the original 2011 Securities Purchase Agreement.

On September 18, 2013, we entered into Securities Purchase Agreements with accredited investors, whereby we sold an aggregate of 291,668 shares of common stock and warrants to purchase an additional 291,668 shares of common stock for gross proceeds to us of $1,750,000. After payment of placement agent fees to Palladium Capital Advisors and other expenses, we received net proceeds of approximately $1,575,000. Each share of common stock was sold for a purchase price of $6 per share. In addition, each investor also received a five-year warrant to purchase 100% of the number of shares of common stock purchased at an exercise price of $8 per share. In addition to the cash fee for its placement agent services, Palladium Capital Advisors also received a warrant to purchase 14,583 shares of common stock on the same terms and conditions as the investors. As required under the terms of the Securities Purchase Agreement we entered into on February 22, 2013 with certain accredited investors (the “February 2013 Investors”), we issued to the February 2013 Investors an additional 404,000 shares of common stock. In addition, the antidilution provisions of the warrants issued to the February 2013 Investors resulted in the aggregate number of shares issuable upon the exercise of these warrants increasing to 673,334 shares of common stock. The securities were issued in a transaction that was exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder inasmuch as the securities were offered and sold solely to accredited investors and we did not engage in any form of general solicitation or general advertising in making the offering.

On April 14, 2014 we sold to GCP (i) a 5% Senior Secured Convertible Debenture with a principal amount of $250,000 and (ii) a five-year warrant to purchase up to 41,667 shares of our common stock at an exercise price of $9 per share, for a total purchase price of $250,000. The debenture is convertible, at GCP’s option, into shares of common stock at an initial conversion price of $6 per share. The securities were issued in a transaction that was exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act inasmuch as the securities were offered and sold to a single accredited investor and we did not engage in any form of general solicitation or general advertising in making the offering.

On May 9, 2014, we issued to GBS Venture Partners Limited (“GBS Venture”), a convertible debenture holder and stockholder of Viveve, Inc., a warrant to purchase shares of common stock equal to 5% of the outstanding shares of our common stock on a post-Merger basis in consideration for the cancellation of Convertible Promissory Notes issued by Viveve, Inc. in the aggregate principal amount of $1,750,000 held by GBS Venture. At the effective time of the Merger, the warrant issued to GBS Venture automatically converted into 943,596 shares of common stock. The securities were issued in a transaction that was exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act inasmuch as the securities were offered and sold to a single accredited investor and we did not engage in any form of general solicitation or general advertising in making the offering.

Also on May 9, 2014, we and the holders of certain outstanding warrants to purchase shares of our common stock entered into a Warrant-Equity Exchange Agreement pursuant to which the warrant holders agreed to exchange warrants for shares of our common stock equal to two-thirds the number of shares of common stock underlying the warrants, or an aggregate of 891,971 shares of common stock (the “Exchange Shares”), as soon as practicable following the date of the agreement.

In conjunction with the Warrant-Equity Exchange Agreement, we entered into a Right to Shares Agreement with GCP dated May 9, 2014. Pursuant to the Right to Shares Agreement, in lieu of issuing 432,479 shares of common stock to GCP under the Warrant-Equity Exchange Agreement, we granted a right to GCP to receive up to 432,479 shares of our common stock, subject to the beneficial ownership limitation of 4.99% of the outstanding shares of our common stock. No additional consideration will be paid by GCP upon its exercise of this right.

Finally, on May 9, 2014 we and certain accredited investors entered into Securities Purchase Agreements pursuant to which the investors agreed to purchase an aggregate of approximately 11,320,755 shares of our common stock at a price of $0.53 per share to the investors and five-year warrants to purchase up to 940,188 shares of common stock to certain of the investors, at an exercise price of $0.53 per share for aggregate gross proceeds of approximately $6 million, consisting of $4,500,000 in cash payments and the conversion of approximately $1,500,000 outstanding amount of principal and interest of certain Viveve, Inc. promissory notes. This offering closed on September 23, 2014, the effective date of the Merger. Palladium Capital Advisors, LLC and Middlebury Securities acted as placement agents in connection with this offering. The securities were issued in a transaction that was exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder inasmuch as the securities were offered and sold solely to accredited investors and we did not engage in any form of general solicitation or general advertising in making the offering.

On May 27, 2014, we sold to GCP (i) a 5% Senior Secured Convertible Debenture with a principal amount of $250,000, and (ii) a five-year warrant to purchase up to 41,667 shares of our common stock at an exercise price of $9 per share for a total purchase price of $250,000. The debenture was convertible into shares of common stock at a conversion price of $6 per share. The securities were issued in a transaction that was exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act inasmuch as the securities were offered and sold to a single accredited investor and we did not engage in any form of general solicitation or general advertising in making the offering.

On July 15, 2014, we sold to GCP (i) a 5% Senior Secured Convertible Debenture with a principal amount of $125,000 and (ii) a five-year common stock purchase warrant to purchase up to 20,833 shares of our common stock at an exercise price of $9 per share for a total purchase price of $125,000. The debenture was convertible, at GCP’s option, into shares of common stock at an initial conversion price of $6 per share. The securities were issued in a transaction that was exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act inasmuch as the securities were offered and sold to a single accredited investor and we did not engage in any form of general solicitation or general advertising in making the offering.

On August 6, 2014, we sold to GCP (i) a 5% Senior Secured Convertible Debenture with a principal amount of $125,000, and (ii) a five-year common stock purchase warrant to purchase up to 20,833 shares of our common stock at an initial exercise price of $9 per share for a total purchase price of $125,000. The debenture was convertible, at GCP’s option, into shares of our common stock at a conversion price of $6 per share. The securities were issued in a transaction that was exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act inasmuch as the securities were offered and sold to a single accredited investor and we did not engage in any form of general solicitation or general advertising in making the offering.

On September 23, 2014, we completed the Merger with Viveve, Inc. Pursuant to the Merger Agreement:

● each share of Viveve, Inc. common stock issued and outstanding immediately prior to the effective time of the Merger was converted into the right to receive either (i) 0.0080497 (the “Exchange Ratio”) shares of our common stock, no par value per share, if held by an accredited investor, as defined in Rule 501 of Regulation D as promulgated under the Securities Act of 1933, as amended, or (ii) a cash payment in an amount equal to the product of the Exchange Ratio and $0.53, if held by a non-accredited investor; and

● each outstanding option to purchase a share of Viveve, Inc.’s common stock, whether vested or unvested, immediately prior to the effective time, was converted into an option to purchase a number of shares of common stock (rounded down to the nearest whole share) equal to (i) the number of shares of Viveve, Inc.’s common stock for which such option was exercisable immediately prior to the effective time of the Merger multiplied by (ii) the Exchange Ratio, at an exercise price equal to (y) the exercise price of the Viveve, Inc. option immediately prior to the effective time divided by (z) the Exchange Ratio (rounded up to the nearest cent).

At the effective time of the Merger, the former stockholders of Viveve, Inc. were issued 3,743,282 shares of our common stock. We issued the shares of common stock in connection with the Merger in reliance upon the exemptions from registration afforded by Section 4(a)(2) and Rule 506 promulgated under the Securities Act of 1933, as amended.

As a condition to the Merger, pursuant to an Agreement of Reorganization, dated September 23, 2014, we transferred certain of the assets and liabilities and all of the outstanding shares of RenalGuard Solutions, Inc., our former subsidiary, which became the owner of the RenalGuard business through its holdings of 100% of the outstanding equity in PLC Medical Systems, Inc. and PLC Systemas Medicos Inernacionais, to GCP in exchange for the cancellation of all of the 5% Senior Secured Convertible Debentures held by GCP, and a release of liens on substantially all of our assets.

Immediately prior to the Merger, the remaining holders of our debentures converted the principal and interest owed pursuant to the debentures into an aggregate of 40,731 shares of common stock, cancelling the debentures in full.

In conjunction with the receipt of a $5 million term loan from Square 1 Bank, on September 30, 2014 we issued a ten-year warrant to Square 1 Bank the purchase of 471,698 shares of our common stock at an exercise price of $0.53 per share. The securities were issued in a transaction that was exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act inasmuch as the securities were offered and sold to a single accredited investor and we did not engage in any form of general solicitation or general advertising in making the offering.

ITEM 16.      Exhibits

Exhibit No.	Description
2.1	Agreement and Plan of Merger dated May 9, 2014 by and among Viveve, Inc., PLC Systems, Inc. and PLC Systems Acquisition Corporation (14)
2.1.1	Amendment to Agreement and Plan of Merger (14)
2.2	RenalGuard Reorganization Agreement (15)
3.1	Articles of Continuance (2)
3.1.1	Articles of Amendment to Articles of Continuance (3)
3.2	Bylaw No. 1 (4)
3.2.1	Bylaw No. 2*
4.1	Form of 5% Senior Secured Convertible Debenture issued on February 22, 2011, July 2, 2012, January 16, 2013, April 14, 2014, May 27, 2014, July 15, 2014 and August 6, 2014 (5)
4.2	Form of Common Stock Purchase Warrant issued on February 22, 2011, July 2, 2012, January 16, 2013, April 14, 2014, May 27, 2014, July 15, 2014 and August 6, 2014 (5)
4.3	Form of Common Stock Purchase Warrant issued on September 18, 2013 (6)
4.4	Form of Common Stock Purchase Warrant issued on September 23, 2014 to GBS Venture Partners Limited (7)
4.5	Conversion Agreement dated May 9, 2014 between the Registrant and holders of the Registrant’s 5% Senior Secured Convertible Debentures (7)
4.6	Warrant Exchange Agreement dated May 9, 2014 between the Registrant and certain holders of the Registrant’s warrants (7)
4.7	Form of Common Stock Purchase Warrant issued to investors in the private offering of the Registrant’s common stock which closed on September 23, 2014 (7)
4.8	Warrant to Purchase Stock issued September 30, 2014 to Square 1 Bank (8)
4.9	Form of Common Stock Purchase Warrant issued on February 22, 2013 (11)
5.1	Opinion of MacDonald & Company
10.1	Form of Securities Purchase Agreement for the purchase of 5% Senior Secured Convertible Debentures (5)
10.2	Amendment and Waiver to Securities Purchase Agreement for the purchase of 5% Senior Secured Convertible Debentures dated July 2, 2012 (9)
10.3	Amendment and Waiver to Securities Purchase Agreement for the purchase of 5% Senior Secured Convertible Debentures dated January 16, 2013 (10)
10.4	Form of Securities Purchase Agreement dated February 22, 2013 (11)
10.5	Right to Shares Letter Agreement dated February 22, 2013 between the Registrant and GCP IV LLC (11)
10.6	Amendment and Waiver to Securities Purchase Agreement for the purchase of 5% Senior Secured Convertible Debentures dated February 22, 2013 (1)
10.7	Securities Purchase Agreement dated September 18, 2013 (6)
10.8	Amendment and Waiver to Securities Purchase Agreement for the purchase of 5% Senior Secured Convertible Debentures dated September 18, 2013 (6)
10.9	Right to Shares Letter Agreement dated September 18, 2013 between the Registrant and GCP IV LLC (6)
10.10	Financial Advisory Agreement dated May 9, 2014 between the Registrant and Bezalel Partners, LLC (1)
10.11	Form of Securities Purchase Agreement dated May 9, 2014 (1)
10.12	Securities Purchase Agreement, dated May 9, 2014, by and among the Registrant and GBS Venture Partners as trustee for GBS BioVentures III Trust (1)
10.13	Escrow Deposit Agreement, dated May 9, 2014 by and among the Registrant, Palladium Capital Advisors LLC, Middlebury Securities and Signature Bank, as escrow agent (1)

10.14	Registration Rights Agreement, dated May 9, 2014 (1)
10.15	Right to Shares Letter Agreement dated May 9, 2014 between the Registrant and GCP IV LLC (1)
10.16	Promissory Note in the principal amount of $250,000 issued to GCP IV LLC on September 2, 2014 (12)
10.17	Form of Debenture Amendment Agreement dated September 2, 2014 (12)
10.18	Amendment dated September 10, 2014 to Securities Purchase Agreement dated February 22, 2013 (13)
10.19	Amendment dated September 11, 2014 to Securities Purchase Agreement dated February 22, 2013 (13)
10.20	PLC Systems Inc. 2013 Stock Option and Incentive Plan, as amended*
10.21	Offer of Employment dated May 14, 2012 from Viveve, Inc. to Patricia K. Scheller (3)
10.22	Offer of Employment dated January 23, 2013 from Viveve, Inc. to Scott C. Durbin (3)
10.23	Loan and Security Agreement dated September 30, 2014 between Viveve, Inc. and Square 1 Bank (8)
10.24	Intellectual Property Security Agreement dated September 30, 2014 between Viveve, Inc. and Square 1 Bank (8)
10.25	Unconditional Guaranty issued by the Registrant in favor of Square 1 Bank (8)
10.26	Intellectual Property Assignment and License Agreement dated February 10, 2006, as amended, between Dr. Edward Knowlton and TivaMed, Inc.*
10.27	Development and Manufacturing Agreement dated June 12, 2006 between TivaMed, Inc. and Stellartech Research Corporation*
10.28	Amended and Restated Development and Manufacturing Agreement dated October 4, 2007 between TivaMed, Inc. and Stellartech Research Corporation*
10.29	Right to Shares Letter Agreement, dated as of September 23, 2014 by and between the Registrant and GCP IV LLC*
10.30	Right to Shares Letter Agreement, dated as of September 23, 2014 by and between the Registrant and G-Ten Partners LLC*
21	List of the Registrant’s Subsidiaries*
23.1	Consent of Burr Pilger Mayer, Inc.*
23.2	Consent of MacDonald & Company (included in Exhibit 5.1)
24.1	Power of Attorney*
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*

*Filed herewith.

(1) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 14, 2014.

(2) Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2004 filed with the Securities and Exchange Commission on March 25, 2005.

(3) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 29, 2014.

(4) Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1999 filed with the Securities and Exchange Commission on March 30, 2000.

(5) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 23, 2011.

(6) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 18, 2013.

(7) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 14, 2014.

(8) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 3, 2014.

(9) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 3, 2012.

(10) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 17, 2013.

(11) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 25, 2013.

(12) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 8, 2014.

(13) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 16, 2014.

(14) Incorporated by reference to Annex A to the Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on August 11, 2014.

(15) Incorporated by reference to Annex B to the Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on August 11, 2014.

ITEM 17.     UNDERTAKINGS.

The undersigned registrant hereby undertakes:

(1)     To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2)     That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)     To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)     That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(5)     That, for the purpose of determining any liability under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:  The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (§ 230.424 of this chapter);

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(6)     Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Sunnyvale, State of California on the 21 day of November, 2014.

VIVEVE MEDICAL, INC.
By:	/s/ Patricia Scheller
	Patricia Scheller, Chief Executive Officer
By:	/s/ Scott Durbin
	Scott Durbin, Chief Financial Officer

Each person whose signature appears below constitutes and appoints Patricia Scheller and Scott Durbin as his or her true and lawful attorneys-in-fact and agents, each acting alone, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments to the Registration Statement, and all pre-effective and post-effective amendments thereto, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, each acting alone, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Patricia Scheller	Chief Executive Officer
Patricia Scheller	(Principal Executive Officer)	November 21, 2014
/s/ Scott Durbin	Chief Financial Officer
Scott Durbin	(Principal Financial and Accounting Officer)	November 21, 2014
/s/ Brigitte Smith
Brigitte Smith	Director	November 21, 2014
/s/ Mark Colella
Mark Colella	Director	November 21, 2014
/s/ Carl Simpson
Carl Simpson	Director	November 21, 2014
/s/ Daniel Janney
Daniel Janney	Director	November 21, 2014

EX-3

Exhibit 3.2.1

BY-LAW NO. 2

BE IT ENACTED AND IT IS HEREBY ENACTED as a by-law of VIVEVE MEDICAL, INC. (formerly PLC Systems Inc.) (hereinafter called the "Corporation") as follows:

NAME CHANGE

1. By-Law No. 1 of the by-laws of the Corporation is hereby amended by changing the name referenced throughout from PLC Systems Inc. to Viveve Medical, Inc.;

ELECTION AND TERM

2. By-Law No. 1 of the by-laws of the Corporation is hereby amended by deleting paragraph 4.03 of By-Law No. 1 and replacing it with the following:

"4.03 Election and Term - Each Director named in the Notice of Directors filed at the time of continuance shall hold office from the date of the Certificate of Continuance until the first Meeting of Shareholders thereafter. An election of Directors shall take place at such first Meeting of Shareholders and at each annual meeting of Shareholders thereafter and all the Directors then in office shall retire but, if qualified, shall be eligible for re-election. A Director shall retain office only until the election of his successor. The number of Directors to be elected at any such meeting shall be the number of Directors then in office unless the Directors or the Shareholders otherwise determine. The election shall be by ordinary resolution of the Shareholders. If an election of Directors is not held at the proper time, the incumbent Directors shall continue in office until their successors are elected."

3. By-law No. 1, as amended from time to time, of the by-laws of the Corporation and this by-law shall be read together and shall have effect, so far as practicable, as though all the provisions thereof were contained in one by-law of the Corporation. All terms contained in this by-law which are defined in By-law No. 1, as amended from time to time, of the by-laws of the Corporation shall, for all purposes hereof, have the meanings given to such terms in the said By-law No. 1 unless expressly stated otherwise or the context otherwise requires.

This amendment to By-Law No. 1 of the Corporation shall come into force upon being passed by the Directors in accordance with the Business Corporations Act (Yukon) (the “Act”).

ENACTED by the Board on the 7^th day of August, 2014.

/s/ Mark R. Tauscher

Chairperson of the Directors Meeting

CONFIRMED AND RATIFIED by the Shareholders in accordance with the Act of the 18^th day of September, 2014.

/s/ Mark R. Tauscher

Chairperson of the Shareholders Meeting

EX-5

Exhibit 5.1

MACDONALD & COMPANY

Lawyers

Grant Macdonald, Q.C. Gareth C. Howells Suite 200, Financial Plaza 204 Lambert Street Whitehorse, YT  Y1A 3T2 Telephone: (867) 667-7885 Fax: (867) 667-7600 Email: ghowells@anton.yk.ca

November 21, 2014

Gentlemen:

We have acted as counsel to Viveve Medical, Inc., a Yukon Territory corporation (the “Company”), in connection with the preparation and filing with the Securities and Exchange Commission (the “Commission”) on November 21, 2014 under the Securities Act of 1933, as amended (the “Securities Act”), of the Company’s registration statement on Form S-1 (the “Registration Statement”) relating to the registration of an aggregate of 12,347,121 shares of common stock of the Company, no par value (“Common Stock”) that may be offered for sale from time to time by the selling stockholders named therein (the “Selling Stockholders”) consisting of (i) 10,450,578 shares of Common Stock that have been issued to the Selling Stockholders (the “Outstanding Shares”); (ii) 956,354 shares of common stock (the “Issuable Shares”) issuable to certain Selling Stockholder in accordance with those certain Rights to Shares Agreements, dated as of September 23, 2014 by and between the Company and each of G-Ten Partners LLC and GCP IV LLC (the “Rights to Shares Agreements”) and (iii) 940,189 shares of Common Stock that are issuable upon exercise of the warrants (the “Warrants”) that were issued to certain Selling Stockholders (the “Warrant Shares” and together with the Outstanding Shares and the Issuable Shares, the “Shares”). This opinion is delivered pursuant to the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.

As your counsel in connection with this opinion, we have examined such corporate records, documents, and instruments of the Company and reviewed such questions of law as we have deemed necessary for the purpose of rendering the opinions set forth herein and we have examined the proceedings proposed to be taken by the Company relating to the issuance and sale by the Company of the Securities.  We have also examined the Registration Statement as filed with the Commission in accordance with the provisions of the Securities Act of 1933, as amended (the “Act”), and the rules and regulations of the Commission thereunder.

We have assumed that the Outstanding Shares and the Warrants were issued, and the Issuable Shares will be issued, to the Selling Shareholders in accordance with the terms of the private placement of securities by the Company on September 23, 2014 and related transactions.

We have examined such documents and considered such legal matters as we have deemed necessary and relevant as the basis for the opinion set forth below.  With respect to such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as reproduced or certified copies, and the authenticity of the originals of those latter documents.  As to questions of fact material to this opinion, we have, to the extent deemed appropriate, relied upon certain representations of certain officers and employees of the Company.

-2-

Based upon the foregoing, and subject to the limitations, qualifications, exceptions and assumptions expressed herein, we are of the opinion that:

1. The Outstanding Shares are validly issued, fully paid and non-assessable.

2.  The Issuable Shares when issued in accordance with the terms of the Rights to Shares Agreements and the Warrant Shares, when issued upon exercise of the warrants in accordance with the terms of the warrants, will be validly issued, fully paid and non-assessable shares of Common Stock of the Company.

This opinion is given as of the date hereof and we have no obligation to update this opinion to take into account any change in applicable law or facts that may occur after the date hereof.

The opinions expressed herein are limited to the laws of the Yukon Territory and we express no opinion as to the laws of any other jurisdiction.

We hereby consent to the use of this opinion as an exhibit to the Registration Statement, to the use of our name as your counsel and to all references made to us in the Registration Statement and in the prospectus forming a part thereof.  In giving this consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Act, or the rules and regulations promulgated thereunder.  This opinion is given as of the effective date of the Registration Statement, and we are under no duty to update the opinions contained herein.

Yours very truly,

MACDONALD & COMPANY

/s/ Gareth C. Howells

Gareth C. Howells

GCH/mls

EX-10

Exhibit 10.20

PLC SYSTEMS INC.

2013 STOCK OPTION AND INCENTIVE PLAN

SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS

The name of the plan is the PLC Systems Inc. 2013 Stock Option and Incentive Plan (the “Plan”). The purpose of the Plan is to encourage and enable the officers, employees, Non-Employee Directors and other key persons (including consultants and prospective employees) of PLC Systems Inc. (the “Company”) and its Subsidiaries upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business to acquire a proprietary interest in the Company. It is anticipated that providing such persons with a direct stake in the Company’s welfare will assure a closer identification of their interests with those of the Company, thereby stimulating their efforts on the Company’s behalf and strengthening their desire to remain with the Company.

The following terms shall be defined as set forth below:

“Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

“Administrator” is defined in Section 2(a).

“Award” or “Awards,” except where referring to a particular category of grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights, Deferred Stock Awards, Restricted Stock Awards, Unrestricted Stock Awards and Dividend Equivalent Rights.

“Board” means the Board of Directors of the Company.

“Cash-Based Award” means an Award entitling the recipient to receive a cash-denominated payment.

“Code” means the Internal Revenue Code of 1986, as amended, and any successor Code, and related rules, regulations and interpretations.

“Committee” means the Compensation Committee of the Board or a similar committee performing the functions of the Compensation Committee and that is comprised of not less than two Non-Employee Directors who are independent.

“Covered Employee” means an employee who is a “Covered Employee” within the meaning of Section 162(m) of the Code.

“Deferred Stock Award” means Awards granted pursuant to Section 8.

“Dividend Equivalent Right” means Awards granted pursuant to Section 12.

“Effective Date” means the date on which the Plan is approved by stockholders as set forth in Section 19.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

“Fair Market Value” of the Stock on any given date means the fair market value of the Stock determined in good faith by the Administrator; provided, however, that if the Stock is traded on a national securities exchange the Fair Market Value of the Stock will equal the closing sales price as reported on the principal exchange or market for the Stock on such date. If there is no trading on such date, the determination shall be made by reference to the last date preceding such date for which there was trading.

“Incentive Stock Option” means any Stock Option designated and qualified as an “incentive stock option” as defined in Section 422 of the Code.

“Non-Employee Director” means a member of the Board who is not also an employee of the Company or any Subsidiary.

“Non-Qualified Stock Option” means any Stock Option that is not an Incentive Stock Option.

“Option” or “Stock Option” means any option to purchase shares of Stock granted pursuant to Section 5.

“Performance Cycle” means one or more periods of time, which may be of varying and overlapping durations, as the Administrator may select, over which the attainment of one or more performance criteria will be measured for the purpose of determining a grantee’s right to and the payment of a Restricted Stock Award or Deferred Stock Award. Each such period shall not be less than three months.

“Restricted Stock Award” means Awards granted pursuant to Section 7.

“Section 409A” means Section 409A of the Code and the regulations and other guidance promulgated thereunder.

“Stock” means the Common Stock, par value $0.0001 per share, of the Company, subject to adjustments pursuant to Section 3.

“Stock Appreciation Right” means any Award granted pursuant to Section 6.

“Subsidiary” means any corporation or other entity (other than the Company) in which the Company has a controlling interest, either directly or indirectly.

“Unrestricted Stock Award” means any Award granted pursuant to Section 9.

SECTION 2. ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE AWARDS

(a) Committee.  The Plan shall be administered by the Compensation Committee (the “Administrator”).

(b) Powers of Administrator.  The Administrator shall have the power and authority to grant Awards consistent with the terms of the Plan, including the power and authority:

(i) to select the individuals to whom Awards may from time to time be granted;

(ii) to determine the time or times of grant, and the extent, if any, of Incentive Stock Options,

(iii) Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Deferred Stock Awards, Unrestricted Stock Awards and Dividend Equivalent Rights, or any combination of the foregoing, granted to any one or more grantees;

(iv) to determine the number of shares of Stock to be covered by any Award;

(v) to determine and modify from time to time the terms and conditions, including restrictions,

(vi) not inconsistent with the terms of the Plan, of any Award, which terms and conditions may differ among individual Awards and grantees, and to approve the form of written instruments evidencing the Awards;

(vii) to accelerate at any time the exercisability or vesting of all or any portion of any Award;

(viii) subject to the provisions of Section 5(a)(ii), to extend at any time the period in which Stock Options may be exercised; and

(ix) at any time to adopt, alter and repeal such rules, guidelines and practices for administration of the Plan and for its own acts and proceedings as it shall deem advisable; to interpret the terms and provisions of the Plan and any Award (including related written instruments); to make all determinations it deems advisable for the administration of the Plan; to decide all disputes arising in connection with the Plan; and to otherwise supervise the administration of the Plan.

All decisions and interpretations of the Administrator shall be binding on all persons, including the Company and Plan grantees.

(c) Delegation of Authority to Grant Awards.  The Administrator, in its discretion, may delegate to the Chief Executive Officer of the Company all or part of the Administrator’s authority and duties with respect to the granting of Awards, to individuals who are not subject to the reporting and other provisions of Section 16 of the Exchange Act or “covered employees” within the meaning of Section 162(m) of the Code. Any such delegation by the Administrator shall include a limitation as to the amount of Awards that may be granted during the period of the delegation and shall contain guidelines as to the determination of the exercise price of any Stock Option or Stock Appreciation Right, the conversion ratio or price of other Awards and the vesting criteria. The Administrator may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Administrator’s delegate or delegates that were consistent with the terms of the Plan.

(d) Indemnification.  Neither the Board nor the Committee, nor any member of either or any delegatee thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with the Plan, and the members of the Board and the Committee (and any delegatee thereof) shall be entitled in all cases to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including, without limitation, reasonable attorneys’ fees) arising or resulting therefrom to the fullest extent permitted by law and/or under the Company’s organizational documents or any directors’ and officers’ liability insurance coverage which may be in effect from time to time and/or any indemnification agreement between such individual and the Company.

SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION

(a)     Stock Issuable.  Subject to adjustment as provided in Section 3(b), the maximum number of shares of Stock reserved and available for issuance under the Plan shall be 11,382,600 shares of Stock. For purposes of this limitation, the shares of Stock underlying any Awards that are forfeited, canceled or otherwise terminated (other than by exercise) shall be added back to the shares of Stock available for issuance under the Plan. Shares tendered or held back upon exercise of an Option or settlement of an Award to cover the exercise price or tax withholding shall not be available for future issuance under the Plan. In addition, upon exercise of Stock Appreciation Rights, the gross number of shares exercised shall be deducted from the total number of shares remaining available for issuance under the Plan.

Subject to such overall limitations, shares of Stock may be issued up to such maximum number pursuant to any type or types of Award; provided, however, that Stock Options or Stock Appreciation Rights with respect to no more than a grant date fair value equivalent of $1,000,000 of shares of Stock may be granted to any one individual grantee during any one calendar year period. The shares available for issuance under the Plan may be authorized but unissued shares of Stock or shares of Stock reacquired by the Company.

(b) Changes in Stock.  Subject to Section 3(c) hereof, if, as a result of any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar change in the Company’s capital stock, the outstanding shares of Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company, or additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of Stock or other securities, or, if, as a result of any merger or consolidation, sale of all or substantially all of the assets of the Company, the outstanding shares of Stock are converted into or exchanged for a different number or kind of securities of the Company or any successor entity (or a parent or subsidiary thereof), the Administrator shall make an appropriate or proportionate adjustment in i) the maximum number of shares reserved for issuance under the Plan, including the maximum number of shares that may be issued in the form of Unrestricted Stock Awards, Restricted Stock Awards or Deferred Stock Awards, (ii) the number of Stock Options or Stock Appreciation Rights that can be granted to any one individual grantee and the maximum number of shares that may be granted under a Performance-based Award, (iii) the number and kind of shares or other securities subject to any then outstanding Awards under the Plan, (iv) the repurchase price, if any, per share subject to each outstanding Restricted Stock Award, (v) the number of Stock Options automatically granted to Non-Employee Directors, and (vi) the price for each share subject to any then outstanding Stock Options and Stock Appreciation Rights under the Plan, without changing the aggregate exercise price (i.e., the exercise price multiplied by the number of Stock Options and Stock Appreciation Rights) as to which such Stock Options and Stock Appreciation Rights remain exercisable. The adjustment by the Administrator shall be final, binding and conclusive. No fractional shares of Stock shall be issued under the Plan resulting from any such adjustment, but the Administrator in its discretion may make a cash payment in lieu of fractional shares.

The Administrator shall also adjust the number of shares subject to outstanding Awards and the exercise price and the terms of outstanding Awards to take into consideration material changes in accounting practices or principles, extraordinary dividends, acquisitions or dispositions of stock or property or any other event if it is determined by the Administrator that such adjustment is appropriate to avoid distortion in the operation of the Plan, provided that no such adjustment shall be made in the case of an Incentive Stock Option, without the consent of the grantee, if it would constitute a modification, extension or renewal of the Option within the meaning of Section 424(h) of the Code.

(c) Mergers and Other Transactions.  In the case of and subject to the consummation of (i) the dissolution or liquidation of the Company, (ii) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (iii) a merger, reorganization or consolidation in which the outstanding shares of Stock are converted into or exchanged for a different kind of securities of the successor entity and the holders of the Company’s outstanding voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the successor entity immediately upon completion of such transaction, or (iv) the sale of all of the Stock of the Company to an unrelated person or entity (in each case, a “Sale Event”), the Plan and all outstanding Awards granted hereunder shall terminate, unless provision is made in connection with the Sale Event in the sole discretion of the parties thereto for the assumption or continuation of Awards theretofore granted by the successor entity, or the substitution of such Awards with new Awards of the successor entity or parent thereof, with appropriate adjustment as to the number and kind of shares and, if appropriate, the per share exercise prices, as such parties shall agree. In the event of such termination, all Options and Stock Appreciation Rights that are not exercisable immediately prior to the effective time of the Sale Event shall become fully exercisable as of the effective time of the Sale Event and all other Awards shall become fully vested and nonforfeitable as of the effective time of the Sale Event, except as the Administrator may otherwise specify with respect to particular Awards in the relevant Award documentation, and each grantee shall be permitted, within a specified period of time prior to the consummation of the Sale Event as determined by the Administrator, to exercise all outstanding Options and Stock Appreciation Rights held by such grantee, including those that will become exercisable upon the consummation of the Sale Event; provided, however, that the exercise of Options and Stock Appreciation Rights not exercisable prior to the Sale Event shall be subject to the consummation of the Sale Event.

Notwithstanding anything to the contrary in this Section 3(c), in the event of a Sale Event pursuant to which holders of the Stock of the Company will receive upon consummation thereof a cash payment for each share surrendered in the Sale Event, the Company shall have the right, but not the obligation, to make or provide for a cash payment to the grantees holding Options and Stock Appreciation Rights, in exchange for the cancellation thereof, in an amount equal to the difference between (A) the value as determined by the Administrator of the consideration payable per share of Stock pursuant to the Sale Event (the “Sale Price”) times the number of shares of Stock subject to outstanding Options and Stock Appreciation Rights (to the extent then exercisable at prices not in excess of the Sale Price) and (B) the aggregate exercise price of all such outstanding Options and Stock Appreciation Rights.

(d) Substitute Awards.  The Administrator may grant Awards under the Plan in substitution for stock and stock based awards held by employees, directors or other key persons of another corporation in connection with the merger or consolidation of the employing corporation with the Company or a Subsidiary or the acquisition by the Company or a Subsidiary of property or stock of the employing corporation. The Administrator may direct that the substitute awards be granted on such terms and conditions as the Administrator considers appropriate in the circumstances. Any substitute Awards granted under the Plan shall not count against the share limitation set forth in Section 3(a).

SECTION 4. ELIGIBILITY

Grantees under the Plan will be such full or part-time officers and other employees, Non-Employee Directors and key persons (including consultants and prospective employees) of the Company and its Subsidiaries as are selected from time to time by the Administrator in its sole discretion.

SECTION 5. STOCK OPTIONS

Any Stock Option granted under the Plan shall be in such form as the Administrator may from time to time approve. Stock Options granted under the Plan may be either Incentive Stock Options or Non-Qualified Stock Options. Incentive Stock Options may be granted only to employees of the Company or any Subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f) of the Code. To the extent that any Option does not qualify as an Incentive Stock Option, it shall be deemed a Non-Qualified Stock Option.

(a) Stock Options Granted to Employees and Key Persons.  The Administrator in its discretion may grant Stock Options to eligible employees and key persons of the Company or any Subsidiary. Stock Options granted pursuant to this Section 5(a) shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable. If the Administrator so determines, Stock Options may be granted in lieu of cash compensation at the optionee’s election, subject to such terms and conditions as the Administrator may establish.

(i) Exercise Price.  The exercise price per share for the Stock covered by a Stock Option granted pursuant to this Section 5(a) shall be determined by the Administrator at the time of grant but shall not be less than 100 percent of the Fair Market Value on the date of grant. If an employee owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10 percent of the combined voting power of all classes of stock of the Company or any parent or subsidiary corporation and an Incentive Stock Option is granted to such employee, the option price of such Incentive Stock Option shall be not less than 110 percent of the Fair Market Value on the grant date.

(ii) Option Term.  The term of each Stock Option shall be fixed by the Administrator, but no Stock Option shall be exercisable more than 10 years after the date the Stock Option is granted. If an employee owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10 percent of the combined voting power of all classes of stock of the Company or any parent or subsidiary corporation and an Incentive Stock Option is granted to such employee, the term of such Stock Option shall be no more than five years from the date of grant.

(iii) Exercisability; Rights of a Stockholder.  Stock Options shall become exercisable at such time or times, whether or not in installments, as shall be determined by the Administrator at or after the grant date. The Administrator may at any time accelerate the exercisability of all or any portion of any Stock Option. An optionee shall have the rights of a stockholder only as to shares acquired upon the exercise of a Stock Option and not as to unexercised Stock Options.

(iv) Method of Exercise.  Stock Options may be exercised in whole or in part, by giving written notice of exercise to the Company, specifying the number of shares to be purchased. Payment of the purchase price may be made by one or more of the following methods to the extent provided in the Option Award agreement:

(A) In cash, by certified or bank check or other instrument acceptable to the Administrator;

(B) Through the delivery (or attestation to the ownership) of shares of Stock that have been purchased by the optionee on the open market or that have been beneficially owned by the optionee for at least six months and are not then subject to restrictions under any Company plan. Such surrendered shares shall be valued at Fair Market Value on the exercise date; or  

(C) By the optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company for the purchase price; provided that in the event the optionee chooses to pay the purchase price as so provided, the optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Administrator shall prescribe as a condition of such payment procedure.

Payment instruments will be received subject to collection. The transfer to the optionee on the records of the Company or of the transfer agent of the shares of Stock to be purchased pursuant to the exercise of a Stock Option will be contingent upon receipt from the optionee (or a purchaser acting in his stead in accordance with the provisions of the Stock Option) by the Company of the full purchase price for such shares and the fulfillment of any other requirements contained in the Option Award agreement or applicable provisions of laws (including the satisfaction of any withholding taxes that the Company is obligated to withhold with respect to the optionee). In the event an optionee chooses to pay the purchase price by previously-owned shares of Stock through the attestation method, the number of shares of Stock transferred to the optionee upon the exercise of the Stock Option shall be net of the number of attested shares. In the event that the Company establishes, for itself or using the services of a third party, an automated system for the exercise of Stock Options, such as a system using an Internet website or interactive voice response, then the paperless exercise of Stock Options may be permitted through the use of such an automated system.

(v) Annual Limit on Incentive Stock Options.  To the extent required for “incentive stock option” treatment under Section 422 of the Code, the aggregate Fair Market Value (determined as of the time of grant) of the shares of Stock with respect to which Incentive Stock Options granted under this Plan and any other plan of the Company or its parent and subsidiary corporations become exercisable for the first time by an optionee during any calendar year shall not exceed $100,000. To the extent that any Stock Option exceeds this limit, it shall constitute a Non-Qualified Stock Option.

(b) Non-transferability of Options.  No Stock Option shall be transferable by the optionee otherwise than by will or by the laws of descent and distribution and all Stock Options shall be exercisable, during the optionee’s lifetime, only by the optionee, or by the optionee’s legal representative or guardian in the event of the optionee’s incapacity. Notwithstanding the foregoing, the Administrator, in its sole discretion, may provide in the Award agreement regarding a given Option that the optionee may transfer his Non-Qualified Stock Options to members of his immediate family, to trusts for the benefit of such family members, or to partnerships in which such family members are the only partners, provided that the transferee agrees in writing with the Company to be bound by all of the terms and conditions of this Plan and the applicable Option.

SECTION 6. STOCK APPRECIATION RIGHTS

(a) Nature of Stock Appreciation Rights.  A Stock Appreciation Right is an Award entitling the recipient to receive shares of Stock having a value equal to the excess of the Fair Market Value of the Stock on the date of exercise over the exercise price of the Stock Appreciation Right, which price shall not be less than 100 percent of the Fair Market Value of the Stock on the date of grant multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised.

(b) Grant and Exercise of Stock Appreciation Rights.  Stock Appreciation Rights may be granted by the Administrator independently of any Stock Option granted pursuant to Section 5 of the Plan.

(c) Terms and Conditions of Stock Appreciation Rights.  Stock Appreciation Rights shall be subject to such terms and conditions as shall be determined from time to time by the Administrator, provided that all Stock Appreciation Rights shall be exercisable during the grantee’s lifetime only by the grantee or the grantee’s legal representative.

(d) Stock Appreciation Rights Term.  The term of each Stock Appreciation Right shall be fixed by the Administrator, but no Stock Appreciation Right shall be exercisable more than ten years after the date the Stock Appreciation Right is granted.

SECTION 7. RESTRICTED STOCK AWARDS

(a) Nature of Restricted Stock Awards.  A Restricted Stock Award is an Award entitling the recipient to acquire, at such purchase price (which may be zero) as determined by the Administrator, shares of Stock subject to such restrictions and conditions as the Administrator may determine at the time of grant (“Restricted Stock”). Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives. The grant of a Restricted Stock Award is contingent on the grantee executing the Restricted Stock Award agreement. The terms and conditions of each such agreement shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees.

(b) Rights as a Stockholder.  Upon execution of a written instrument setting forth the Restricted Stock Award and payment of any applicable purchase price, a grantee shall have the rights of a stockholder with respect to the voting of the Restricted Stock, subject to such conditions contained in the written instrument evidencing the Restricted Stock Award. Unless the Administrator shall otherwise determine, (i) uncertificated Restricted Stock shall be accompanied by a notation on the records of the Company or the transfer agent to the effect that they are subject to forfeiture until such Restricted Stock are vested as provided in Section 7(d) below, and (ii) certificated Restricted Stock shall remain in the possession of the Company until such Restricted Stock is vested as provided in Section 7(d) below, and the grantee shall be required, as a condition of the grant, to deliver to the Company such instruments of transfer as the Administrator may prescribe.

(c) Restrictions.  Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as specifically provided herein or in the Restricted Stock Award agreement. Except as may otherwise be provided by the Administrator either in the Award agreement or, subject to Section 15 below, in writing after the Award agreement is issued, if any, if a grantee’s employment (or other service relationship) with the Company and its Subsidiaries terminates for any reason, any Restricted Stock that has not vested at the time of termination shall automatically and without any requirement of notice to such grantee from or other action by or on behalf of, the Company be deemed to have been reacquired by the Company at its original purchase price from such grantee or such grantee’s legal representative simultaneously with such termination of employment (or other service relationship), and thereafter shall cease to represent any ownership of the Company by the grantee or rights of the grantee as a shareholder. Following such deemed reacquisition of unvested Restricted Stock that are represented by physical certificates, grantee shall surrender such certificates to the Company upon request without consideration.

(d) Vesting of Restricted Stock.  The Administrator at the time of grant shall specify the date or dates and/or the attainment of pre-established performance goals, objectives and other conditions on which the non-transferability of the Restricted Stock and the Company’s right of repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or the attainment of such pre-established performance goals, objectives and other conditions, the shares on which all restrictions have lapsed shall no longer be Restricted Stock and shall be deemed “vested.” Except as may otherwise be provided by the Administrator either in the Award agreement or, subject to Section 15 below, in writing after the Award agreement is issued, a grantee’s rights in any shares of Restricted Stock that have not vested shall automatically terminate upon the grantee’s termination of employment (or other service relationship) with the Company and its Subsidiaries and such shares shall be subject to the provisions of Section 7(c) above.

SECTION 8. DEFERRED STOCK AWARDS

(a) Nature of Deferred Stock Awards.  A Deferred Stock Award is an Award of phantom stock units to a grantee, subject to restrictions and conditions as the Administrator may determine at the time of grant. Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives. The grant of a Deferred Stock Award is contingent on the grantee executing the Deferred Stock Award agreement. The terms and conditions of each such agreement shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees. At the end of the deferral period, the Deferred Stock Award, to the extent vested, shall be paid to the grantee in the form of shares of Stock. To the extent that a Deferred Stock Award is subject to Section 409A, it may contain such additional terms and conditions as the Administrator shall determine in its sole discretion in order for such Award to comply with the requirements of Section 409A.

(b) Election to Receive Deferred Stock Awards in Lieu of Compensation.  The Administrator may, in its sole discretion, permit a grantee to elect to receive a portion of the cash compensation or Restricted Stock Award otherwise due to such grantee in the form of a Deferred Stock Award. Any such election shall be made in writing and shall be delivered to the Company no later than the date specified by the Administrator and in accordance with Section 409A and such other rules and procedures established by the Administrator. The Administrator shall have the sole right to determine whether and under what circumstances to permit such elections and to impose such limitations and other terms and conditions thereon as the Administrator deems appropriate.

(c) Rights as a Stockholder.  During the deferral period, a grantee shall have no rights as a stockholder; provided, however, that the grantee may be credited with Dividend Equivalent Rights with respect to the phantom stock units underlying his Deferred Stock Award, subject to such terms and conditions as the Administrator may determine.

(d) Restrictions.  A Deferred Stock Award may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of during the deferral period.

(e) Termination.  Except as may otherwise be provided by the Administrator either in the Award agreement or, subject to Section 15 below, in writing after the Award agreement is issued, a grantee’s right in all Deferred Stock Awards that have not vested shall automatically terminate upon the grantee’s termination of employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.

SECTION 9. UNRESTRICTED STOCK AWARDS

The Administrator may, in its sole discretion, grant (or sell at par value or such higher purchase price determined by the Administrator) an Unrestricted Stock Award to any grantee pursuant to which such grantee may receive shares of Stock free of any restrictions (“Unrestricted Stock”) under the Plan. Unrestricted Stock Awards may be granted in respect of past services or other valid consideration, or in lieu of cash compensation due to such grantee.

SECTION 10. CASH-BASED AWARDS

The Administrator may, in its sole discretion, grant Cash-Based Awards to any grantee in such number or amount and upon such terms, and subject to such conditions, as the Administrator shall determine at the time of grant. The Administrator shall determine the maximum duration of the Cash-Based Award, the amount of cash to which the Cash-Based Award pertains, the conditions upon which the Cash-Based Award shall become vested or payable, and such other provisions as the Administrator shall determine. Each Cash-Based Award shall specify a cash-denominated payment amount, formula or payment ranges as determined by the Administrator. Payment, if any, with respect to a Cash-Based Award shall be made in accordance with the terms of the Award and may be made in cash or in shares of Stock, as the Administrator determines.

SECTION 11. PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES

Notwithstanding anything to the contrary contained herein, if any Restricted Stock Award, Cash-Based Award or Deferred Stock Award granted to a Covered Employee is intended to qualify as “Performance-based Compensation” under Section 162(m) of the Code and the regulations promulgated thereunder (a “Performance-based Award”), such Award shall comply with the provisions set forth below:

(a) Performance Criteria.  The Administrator shall define in an objective fashion the manner of calculating the Performance Criteria it selects to use for any Performance Cycle. The Administrator, in its discretion, may adjust or modify the calculation of Performance Goals for such Performance Cycle in order to prevent the dilution or enlargement of the rights of an individual (x) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event or development, (y) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or (z) in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions provided however, that the Administrator may not exercise such discretion in a manner that would increase the Performance-Based Award granted to a Covered Employee. The performance criteria used in performance goals governing Performance-based Awards granted to Covered Employees may include any or all of the following: (i) return on equity, assets, capital or investment: (ii) pre-tax or after-tax profit levels; (iii) cash flow, funds from operations or similar measure; (iv) total shareholder return; (v) changes in the market price of the Stock; (vi) revenues, sales or market share; (vii) net income (loss) or earnings per share; (viii) computer support availability; (ix) expense margins or operating efficiency (including budgeted spending limits) or (x) project development milestones, any of which may relate to the Company or any Subsidiary, division, operating unit or business segment of the Company, or any combination of the foregoing, and may be measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group and, for financial measures, may be based on numbers calculated in accordance with U.S. generally accepted accounting principles or on an as adjusted basis.

(b) Grant of Performance-based Awards.  With respect to each Performance-based Award granted to a Covered Employee, the Committee shall select, within the first 90 days of a Performance Cycle (or, if shorter, within the maximum period allowed under Section 162(m) of the Code) the performance criteria for such grant, and the achievement targets with respect to each performance criterion (including a threshold level of performance below which no amount will become payable with respect to such Award). Each Performance-based Award will specify the amount payable, or the formula for determining the amount payable, upon achievement of the various applicable performance targets. The performance criteria established by the Committee may be (but need not be) different for each Performance Cycle and different goals may be applicable to Performance-based Awards to different Covered Employees.

(c) Payment of Performance-based Awards.  Following the completion of a Performance Cycle, the Committee shall meet to review and certify in writing whether, and to what extent, the performance criteria for the Performance Cycle have been achieved and, if so, to also calculate and certify in writing the amount of the Performance-based Awards earned for the Performance Cycle. The Committee shall then determine the actual size of each Covered Employee’s Performance-based Award, and, in doing so, may reduce or eliminate the amount of the Performance-based Award for a Covered Employee if, in its sole judgment, such reduction or elimination is appropriate.

(d) Maximum Award Payable.  The maximum Performance-based Award payable to any one Covered Employee under the Plan for a Performance Cycle is a grant date fair value number of Shares (subject to adjustment as provided in Section 3(b) hereof) equal to $1,000,000 or $1,000,000 in the case of a Performance-Based Award that is a Cash-Based Award.

SECTION 12. DIVIDEND EQUIVALENT RIGHTS

(a) Dividend Equivalent Rights.  A Dividend Equivalent Right is an Award entitling the grantee to receive credits based on cash dividends that would have been paid on the shares of Stock specified in the Dividend Equivalent Right (or other award to which it relates) if such shares had been issued to and held by the grantee. A Dividend Equivalent Right may be granted hereunder to any grantee only as a component of an Unrestricted Stock Award, a Restricted Stock Award or a Deferred Stock Award. The terms and conditions of Dividend Equivalent Rights shall be specified in the Award agreement. Dividend equivalents credited to the holder of a Dividend Equivalent Right may be paid currently or may be deemed to be reinvested in additional shares of Stock, which may thereafter accrue additional equivalents. Any such reinvestment shall be at Fair Market Value on the date of reinvestment or such other price as may then apply under a dividend reinvestment plan sponsored by the Company, if any. Dividend Equivalent Rights may be settled in cash or shares of Stock or a combination thereof, in a single installment or installments. A Dividend Equivalent Right granted as a component of another Award may provide that such Dividend Equivalent Right shall be settled upon exercise, settlement, or payment of, or lapse of restrictions on, such other award, and that such Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions as such other award. A Dividend Equivalent Right granted as a component of another Award may also contain terms and conditions different from such other award.

(b) Interest Equivalents.  Any Award under this Plan that is settled in whole or in part in cash on a deferred basis may provide in the grant for interest equivalents to be credited with respect to such cash payment. Interest equivalents may be compounded and shall be paid upon such terms and conditions as may be specified by the grant.

(c) Termination.  Except as may otherwise be provided by the Administrator either in the Award agreement or, subject to Section 15 below, in writing after the Award agreement is issued, a grantee’s rights in all Dividend Equivalent Rights or interest equivalents granted as a component of another Award that has not vested shall automatically terminate upon the grantee’s termination of employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.

SECTION 13. TAX WITHHOLDING

(a) Payment by Grantee.  Each grantee shall, no later than the date as of which the value of an Award or of any Stock or other amounts received thereunder first becomes includable in the gross income of the grantee for Federal income tax purposes, pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of, any Federal, state, or local taxes of any kind required by law to be withheld with respect to such income. The Company and its Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the grantee. The Company’s obligation to deliver stock certificates to any grantee is subject to and conditioned on tax obligations being satisfied by the grantee.

(b) Payment in Stock.  Subject to approval by the Administrator, a grantee may elect to have the minimum required tax withholding obligation satisfied, in whole or in part, by (i) authorizing the Company to withhold from shares of Stock to be issued pursuant to any Award a number of shares with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the withholding amount due, or (ii) transferring to the Company shares of Stock owned by the grantee with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the withholding amount due.

SECTION 14. TRANSFER, LEAVE OF ABSENCE, ETC.  

For purposes of the Plan, the following events shall not be deemed a termination of employment:

(a) a transfer to the employment of the Company from a Subsidiary or from the Company to a Subsidiary, or from one Subsidiary to another; or

(b) an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the employee’s right to re-employment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Administrator otherwise so provides in writing.

SECTION 15. AMENDMENTS AND TERMINATION

The Board may, at any time, amend or discontinue the Plan and the Administrator may, at any time, amend or cancel any outstanding Award for the purpose of satisfying changes in law or for any other lawful purpose, but no such action shall adversely affect rights under any outstanding Award without the holder’s consent. Except as provided in Section 3(b) or 3(c), in no event may the Administrator exercise its discretion to reduce the exercise price of outstanding Stock Options or Stock Appreciation Rights or effect repricing through cancellation and re-grants or by exchanging a Stock Option or Stock Appreciation Right for any other Award. To the extent required under the rules of any securities exchange or market system on which the Stock is listed, to the extent determined by the Administrator to be required by the Code to ensure that Incentive Stock Options granted under the Plan are qualified under Section 422 of the Code or to ensure that compensation earned under Awards qualifies as performance-based compensation under Section 162(m) of the Code, Plan amendments shall be subject to approval by the Company stockholders entitled to vote at a meeting of stockholders. Nothing in this Section 15 shall limit the Administrator’s authority to take any action permitted pursuant to Section 3(c).

SECTION 16. STATUS OF PLAN

With respect to the portion of any Award that has not been exercised and any payments in cash, Stock or other consideration not received by a grantee, a grantee shall have no rights greater than those of a general creditor of the Company unless the Administrator shall otherwise expressly determine in connection with any Award or Awards. In its sole discretion, the Administrator may authorize the creation of trusts or other arrangements to meet the Company’s obligations to deliver Stock or make payments with respect to Awards hereunder, provided that the existence of such trusts or other arrangements is consistent with the foregoing sentence.

SECTION 17. SECTION 409A AWARDS

To the extent that any Award is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A (a “409A Award”), the Award shall be subject to such additional rules and requirements as specified by the Administrator from time to time in order to comply with Section 409A. In this regard, if any amount under a 409A Award is payable upon a “separation from service” (within the meaning of Section 409A) to a grantee who is then considered a “specified employee” (within the meaning of Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the grantee’s separation from service, or (ii) the grantee’s death, but only to the extent such delay is necessary to prevent such payment from being subject to interest, penalties and/or additional tax imposed pursuant to Section 409A. Further, the settlement of any such Award may not be accelerated except to the extent permitted by Section 409A.

SECTION 18. GENERAL PROVISIONS

(a) No Distribution; Compliance with Legal Requirements.  The Administrator may require each person acquiring Stock pursuant to an Award to represent to and agree with the Company in writing that such person is acquiring the shares without a view to distribution thereof.

No shares of Stock shall be issued pursuant to an Award until all applicable securities law and other legal and stock exchange or similar requirements have been satisfied. The Administrator may require the placing of such stop-orders and restrictive legends on certificates for Stock and Awards as it deems appropriate.

(b) Delivery of Stock Certificates.  Stock certificates to grantees under this Plan shall be deemed delivered for all purposes when the Company or a stock transfer agent of the Company shall have mailed such certificates in the United States mail, addressed to the grantee, at the grantee’s last known address on file with the Company. Uncertificated Stock shall be deemed delivered for all purposes when the Company or a Stock transfer agent of the Company shall have given to the grantee by electronic mail (with proof of receipt) or by United States mail, addressed to the grantee, at the grantee’s last known address on file with the Company, notice of issuance and recorded the issuance in its records (which may include electronic “book entry” records). Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing shares of Stock pursuant to the exercise of any Award, unless and until the Administrator has determined, with advice of counsel (to the extent the Administrator deems such advice necessary or advisable), that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the shares of Stock are listed, quoted or traded. All Stock certificates delivered pursuant to the Plan shall be subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with federal, state or foreign jurisdiction, securities or other laws, rules and quotation system on which the Stock is listed, quoted or traded. The Administrator may place legends on any Stock certificate to reference restrictions applicable to the Stock. In addition to the terms and conditions provided herein, the Administrator may require that an individual make such reasonable covenants, agreements, and representations as the Administrator, in its discretion, deems necessary or advisable in order to comply with any such laws, regulations, or requirements. The Administrator shall have the right to require any individual to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation, as may be imposed in the discretion of the Administrator.

(c) Stockholder Rights.  Until Stock is deemed delivered in accordance with Section 18(b), no right to vote or receive dividends or any other rights of a stockholder will exist with respect to shares of Stock to be issued in connection with an Award, notwithstanding the exercise of a Stock Option or any other action by the grantee with respect to an Award.

(d) Other Compensation Arrangements; No Employment Rights.  Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, including trusts, and such arrangements may be either generally applicable or applicable only in specific cases. The adoption of this Plan and the grant of Awards do not confer upon any employee any right to continued employment with the Company or any Subsidiary.

(e) Trading Policy Restrictions.  Option exercises and other Awards under the Plan shall be subject to such Company’s insider trading policy and procedures, as in effect from time to time.

(f) Designation of Beneficiary.  Each grantee to whom an Award has been made under the Plan may designate a beneficiary or beneficiaries to exercise any Award or receive any payment under any Award payable on or after the grantee’s death. Any such designation shall be on a form provided for that purpose by the Administrator and shall not be effective until received by the Administrator. If no beneficiary has been designated by a deceased grantee, or if the designated beneficiaries have predeceased the grantee, the beneficiary shall be the grantee’s estate.

SECTION 19. EFFECTIVE DATE OF PLAN

This Plan shall become effective upon approval by the holders of a majority of the votes cast at a meeting of stockholders at which a quorum is present. Subject to such approval by the stockholders and to the requirement that no Stock may be issued hereunder prior to such approval, Stock Options and other Awards may be granted hereunder on and after adoption of this Plan by the Board. No Incentive Stock Option may be granted under the Plan after the 10-year anniversary of the most recent prior date on which the Plan was approved by the Board of Directors (provided that the Plan was approved by stockholders within one year of such date) and no other Award may be granted under the Plan after the 10-year anniversary of the most recent prior date on which the Plan was approved by stockholders.

SECTION 20. GOVERNING LAW

This Plan and all Awards and actions taken thereunder shall be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts, applied without regard to conflict of law principles.

FIRST AMENDMENT TO THE

PLC SYSTEMS INC.

2013 STOCK OPTION AND INCENTIVE PLAN

This First Amendment to the PLC Systems Inc. 2013 Stock Option and Incentive Plan (the “Amendment”) is made effective as of September 18, 2014 (the “Effective Date”), by PLC Systems Inc., a Yukon Territory corporation (the “Company”).

WITNESSETH:

WHEREAS, the Board of Directors of the Company (the “Board”) adopted the PLC Systems Inc. 2013 Stock Option and Incentive Plan (the “Plan”) on April 22, 2013, which was approved by the shareholders on June 6, 2013.

WHEREAS, the Board now desires to further amend the Plan to increase the maximum number of shares available under the Plan.

NOW, THEREFORE, pursuant to the authority reserved in Section 15, the Plan is amended as follows:

1.             Effective as of the Effective Date, the definition of “Stock” in Section 1 of the Plan is hereby amended and restated in its entirety as follows:

“Stock” means the Common Stock, no par value per share, of the Company, subject to adjustments pursuant to Section 3.

2.             Effective as of the Effective Date, the first sentence of Section 3 of the Plan is hereby amended and restated in its entirety as follows:

(a) Stock Issuable. Subject to adjustment as provided in Section 3(b), the maximum number of shares of Stock reserved and available for issuance under the Plan shall be 3,111,587 shares of Stock.

3.             Except as otherwise specifically set forth herein, all other terms and conditions of the Plan shall remain in full force and effect.

Adopted by the Board of Directors on April 28, 2013

Submitted for shareholder approval on September 18, 2014

EX-10

Exhibit 10.26

FIRST AMENDMENT TO THE INTELLECTUAL PROPERTY ASSIGNMENT AND LICENSE AGREEMENT

This First Amendment to the Intellectual Property Assignment and License Agreement ("Amendment 1"), entered into as of May 22, 2006 (the "Amendment 1 Date") is entered into by and between TivaMed, Inc., a Delaware corporation, with its principal place of business at 900 Welch Road, Palo Alto, CA 94304 ("TivaMed"), and Edward W. Knowlton, an individual residing at 124 Delissa Court, Stateline, Nevada 89449 ("Knowlton").

RECITALS

WHEREAS, TivaMed and Knowlton entered into that certain Intellectual Property Assignment and License Agreement (the "Agreement") effective as of February 10, 2006; and

WHEREAS, the parties now wish to amend Original IPAL Agreement with this Agreement as set forth herein below.

NOW THEREFORE, in consideration of the covenants and conditions contained herein and other good and valuable consideration the sufficiency and receipt of which is hereby acknowledged, the parties hereby agree to the following:

Amendment

1.        AMENDMENT. The definition of "Field" (Section 1.1) of the Ageement is hereby deleted in its entirety and replaced by the following:

1.1 "Field" means, with respect to the Transferred Property, transmucosal rejuvenation of the vagina or vulva, or any transmucosal vaginal or vulvar application, where "transmucosal" means through a mucosal surface. Field shall exclude one or more of transcutaneous and percutaneous modification of tissue of the female vulva. Field shall exclude one or more of transmucosal, permucosal, transcutaneous, and percutaneous modification of biological tissue other than tissue of the vagina or vulva. Field shall specifically exclude without limitation one or more of the following: transcutaneous contraction, remolding, and ablation of human tissue by applying energy through a skin surface; transmucosal thermal tightening of tissue in the gastrointestinal tract and head and neck. Field shall also exclude without limitation any invasive electrosurgical devices deployed through a surgical incision including guided electrosurgical devices.

2.        EFFECT. Except as specifically amended by this Amendment 1, the Agreement shall remain in full force and effect and, as amended , is hereby ratified, confirmed and approved. No provision of this Amendment 1 may be modified or amended except expressly in a writing signed by both parties nor shall any terms be waived except expressly in writing signed by the party charged therewith.

IN WITNESS WHEREOF, the parties have executed this Amendment 1 as of the Amendment 1 Date.

TivaMed, Inc.	Edward W. Knowlton MD
/s/ Jonathan Parmer	/s/ Edward W. Knowlton MD
Signature	Signature
Jonathan Parmer	Edward W. Knowlton MD
Printed Name	Printed Name
President & CEO
Title

SECOND AMENDMENT TO THE INTELLECTUAL PROPERTY ASSIGNMENT AND LICENSE AGREEMENT

This Second Amendment to the Intellectual Property Assignment and License Agreement ("Amendment 2") is entered into as of July 20, 2007 (the "Amendment 2 Date") by and between TivaMed Inc., a Delaware corporation ("TivaMed") and Edward W. Knowlton, an individual ("Knowlton").

RECITALS

WHEREAS, TivaMed and Knowlton entered into that certain Intellectual Property Assignment and License Agreement effective as of February 10, 2006, and which was subsequently amended by the parties by Amendment 1, dated May 22, 2006, (the foregoing agreement, as amended shall be referred to herein as the "Agreement"); and,

WHEREAS, the parties now wish to amend the Agreement in accordance with the terms set forth herein below.

NOW, THEREFORE, in consideration of the covenants and conditions contained herein and other good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the parties hereby agree to the following:

AMENDMENT

1. Capitalized terms not specifically defined herein shall have the meaning set forth in the Agreement.

2. The License Grant in Section 3 of the Agreement shall be exclusive to TivaMed, even as to Knowlton. Knowlton's ownership of the Knowlton Intellectual Property Rights and Knowlton Technology shall be subject to the licenses granted by Knowlton under the Agreement.

3. The phrase, "In consideration of the sale, assignment, transfer, release, and conveyance and other obligations of Knowlton under this Agreement," at the beginning of Section 4 of the Agreement is hereby deleted in its entirety.

4. The provisions of Section 4.2 are hereby deleted in their entirety and the following shall be inserted under Section 4.2: "[Intentionally omitted] ".

5. The phrase, "In consideration of the sale, assignment, transfer, release, and conveyance and other obligations of Knowlton under this Agreement," at the beginning of Section 5 of the Agreement is hereby deleted in its entirety.

6. The following shall be added after the second sentence of Section 11.2 (No Restrictions on Knowlton Medical Practice): "Notwithstanding any provision of this Agreement to the contrary, Knowlton may not assign within the Field any of the rights granted to him pursuant to this Section 11.2."

7. Except as specifically amended by this Amendment 2, the Agreement shall remain in full force and effect and, as amended hereunder, the Agreement is hereby ratified, confirmed, and approved by the parties. No provision of this Amendment 2 may be modified or amended except in a writing signed by both parties, nor shall any terms be waived except as expressly set forth in a writing signed by the party charged therewith.

8. If there is any inconsistency or conflict between this Amendment 2 and the terms of the Agreement, then the terms of this Amendment 2 shall control with respect to such inconsistency or conflict. Any dispute arising in connection with this Amendment 2 shall be resolved in accordance with the dispute resolution procedures set forth in the Agreement.

IN WITNESS WHEREOF, the parties, through their authorized representatives, have executed this Amendment 2 as of the Amendment 2 Date.

TivaMed Inc.	Edward W. Knowlton, M.D.
/s/ Jonathan Parmer	/s/ Edward W. Knowlton, M.D.
Signature	Signature
Jonathan Parmer
Printed Name
President and CEO
Title

-2-

EX-10

Exhibit 10.27

DEVELOPMENT AND MANUFACTURING AGREEMENT

This Development and Manufacturing Agreement (the "Agreement") is made and entered into as of 12 day of June 2006 (the "Effective Date") by and between Stellartech Research Corporation ("Stellartech"), a California corporation with a principal place of business at 1346 Bordeaux Drive, Sunnyvale, CA 94089, and TiVaMed, Inc. ("Company"), a Delaware Corporation with a principal place of business at 900 Welch Road, Palo Alto, California 94304 (each referred to below as a "party" or collectively as the "parties").

WHEREAS, Company and Stellartech desire to enter into this Agreement for the performance of development and manufacturing services by Stellartech for the Company, and the license of certain intellectual property rights to each party as described below.

WHEREAS, Company and Stellartech have in parallel with the execution of this Agreement entered into a stock purchase agreement (the "Stock Purchase Agreement") pursuant to which Stellartech shall purchase 300,000 shares in the Common Stock of the Company representing 7.5% of the fully diluted outstanding capital stock of the Company as of the Effective Date (the "Shares") under the terms and conditions of the Stock Purchase Agreement, attached hereto and incorporated herein as Exhibit D.

NOW THEREFORE, in consideration of the mutual covenants and undertakings hereinafter set forth, the parties hereby agree as follows:

1.         DEFINITIONS

The capitalized terms in this Agreement which are not otherwise defined in the body hereof shall have the meanings ascribed in Exhibit C below.

2.         DEVELOPMENT AND MANUFACTURING; OBLIGATIONS OF STELLARTECH

2.1     Stellartech, as an independent contractor, agrees to provide to Company (i) the Development Services, and (ii) the Manufacturing Services, (individually, or collectively, the "Services") as described in Exhibit A.

2.2     Stellartech shall use commercially reasonable best efforts to perform and promptly complete the Services.

2.3     Stellartech will determine the method, details and means of performing its Services in accordance with this Agreement.

2.4     Stellartech agrees to accept exclusive liability for the payment of payroll taxes, self-employment taxes, and social security and other contributions that are based on the non-equity based compensation to be paid to Stellartech under this Agreement and on the wages or other compensation paid to any agents or employees of Stellartech. Stellartech agrees to indemnify and defend Company against all such taxes or contributions.

June 12, 2006 CONFIDENTIAL Page 1 of 17

3.1     Company shall use commercially reasonable best efforts to perform and promptly complete the services and obligations it is responsible for as set forth herein and in the Exhibits.

3.2     Company shall supply and make available to Stellartech, at Company's sole expense, access to information, services, systems and reasonable assistance over which Company has control or possession or as reasonably requested by Stellartech for the performance its Services under this Agreement, and as are suitable and adequate for the performance of Stellartech's Services.

3.3     In consideration for Stellartech's Services, Company shall pay to Stellartech the applicable compensation set forth below, and agrees to accept exclusive liability for compliance with all laws, rules and regulations for any equity based consideration provided by Company to Stellartech under the Stock Purchase Agreement and to indemnify and defend Stellartech from and against all such liability.

4.         COMPENSATION

Stellartech shall be paid fees in the amounts and at the times set forth in Exhibit B.

5.        TERM

5.1     Term of Agreement. This Agreement will commence and become effective on the Effective Date and shall continue in effect until three (3) years thereafter, unless earlier terminated as set forth in Section 5.2 (Termination). This Agreement may be renewed for additional periods upon the written agreement by Company and Stellartech, or extended under Section 5.6 (Extension of Term) below.

5.2     Termination. This Agreement may be terminated as follows:

(a)     by either party by giving the other party written notice of termination if any of the following events should occur: (i) if the other party admits in writing its inability to pay its debts as they mature or makes an assignment for the benefit of creditors; (ii) if a petition under the United State Bankruptcy Act, as it now exists or as it may be amended, or any similar law of any other jurisdiction, is filed concerning the other party and, if filed by a third party is not dismissed within sixty (60) days of such filing; or (iii) if a petition is filed by any third party, or an application for a receiver of the other party, is made by anyone and such petition or application is not resolved favorably to that party within sixty (60) days;

(b)     if either party materially breaches this Agreement and, assuming such breach is capable of cure, fails to cure the same within thirty (30) days after written notice specifying the breach, the non-breaching party giving notice may, at its option, terminate this Agreement immediately upon a further written notice to the breaching party;

(c)     at any time, upon the mutual written agreement of the parties;

(d)     by Company for its convenience after the initial twelve (12) months of the Effective Date of the Agreement (the "Initial Term") upon thirty (30) days prior written notice to Stellartech; and

June 12, 2006 CONFIDENTIAL Page 2 of 17

(e)     by Stellartech for its convenience after the Initial Term upon one hundred twenty (120) days prior written notice to Company.

5.3.     Effect of Termination. Upon termination or expiration of this Agreement for any reason:

(a)      Company will pay Stellartech any amounts then due and for any Services rendered and Products and Deliverables developed, manufactured or sold, and the fees, costs and expenses for Services which are then in progress for Stellartech's efficient discontinuation of the Services, up to and including at a minimum the thirty (30) day period following the date of notice of termination;

(b)      all rights and obligations under this Agreement will immediately cease except with respect to those provisions that survive pursuant to Section 11.10 (Survival) below or as expressly provided in this Article 5;

(c)      except as otherwise expressly provided herein each party will promptly cease use of and return all Confidential Information provided by the other party under this Agreement; and

(d)      all licenses granted hereunder will terminate, with the exception of licenses: (i) granted by Stellartech to Company under Section 6.3(b) (Other Technology) which will continue if and only if Company terminates its Repurchase Option of any then Unreleased Shares under the Stock Purchase Agreement or if 100% of the Shares purchased thereunder have otherwise vested in full and are free of any Repurchase Option or risk of forfeiture under the Stock Purchase Agreement, in which case such license rights shall become fully-paid; provided however, such licenses shall not survive in the event of a termination of this Agreement pursuant to Section 5.2(a) or 5.2(b) by Stellartech as a result of Company's bankruptcy or material breach, respectively and (ii) granted by Company to Stellartech under Section 6.4 (Grant of Rights; Intellectual Property). Additionally and notwithstanding the above, if either (i) Stellartech terminates prior to expiration for convenience under Section 5.2 (e) above, or (ii) the Agreement extends until the end of the full term in Section 5.1 (Term of Agreement), then the license to the Company under Section 6.3 (a) (Stellartech Technology) shall survive termination.

(e)      the Company's Repurchase Option under the Stock Purchase Agreement will immediately expire, and 100% of the then-Unreleased Shares shall immediately vest and be released from the Repurchase Option.

(f)      notwithstanding Sections 5.3 (d) and (e) above, Company may opt at the time of termination hereof to relinquish its license rights to the Stellartech Technology and Other Technology granted under Section 6.3(a) (Stellartech Technology) and 6.3(b) (Other Technology), respectively, through written notice to Stellartech. In such event, all license and other rights under Section 6.3 (License Rights to Company) or otherwise granted hereunder shall cease and be immediately revoked, and Stellartech's continued vesting in any then Unreleased Shares under the Stock Purchase Agreement shall cease.

5.4.     Cooperation After Termination. Following (i) a proper notice of termination of the Agreement, or (ii) upon expiration of the Agreement, the parties shall cooperate with each other in the winding up of Stellartech's pending work on behalf of Company including mitigating any amounts incurred by Stellartech with respect thereto, and Stellartech will be compensated at the rates set forth herein and for any expenses and costs incurred; provided that such obligations of Stellartech shall be contingent upon Company having paid to Stellartech all amounts owing to Stellartech hereunder. Without the prior written consent of the other party and except as reasonably necessary to exercise any license surviving hereunder, neither party shall be entitled to retain and shall not retain copies of any Confidential Information or other information owned by the other party at, except in all cases each party may retain one (1) copy of such information for archival purposes, or copies as may be required by law or regulation.

June 12, 2006 CONFIDENTIAL Page 3 of 17

5.5     Return of Materials. Each party agrees that, at the time of termination and at any other time upon request, it will deliver to the other party (and will not keep in its possession or deliver to anyone else) any and all devices, parts, materials, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, equipment, other documents or property, or reproductions of any aforementioned items belonging to the other party, its successors, or assigns, except such materials subject to the rights granted to Stellartech under Section 6.4 (License and Rights to Stellartech; Retained Rights; Nonexciusivity) or reasonably necessary for Company to exercise any surviving licenses under Section 6.3 (License Rights to Company). Without limiting the foregoing, neither party will, during the term of the Agreement or thereafter, deliver or transfer to any person, or use, without authorization by the other party, any property owned by the other party.

5.6     Extension of Term. Except in the event of termination under Section 5.2 (Termination) above, if the requirements in Paragraph 1 (Minimum Commitment) in Exhibit A Section B (Manufacturing Services) have not been fulfilled at the time of Agreement expiration, Stellartech shall have the option to extend the term hereof by written notice until (i) the minimum purchase and exclusive manufacturing requirements in Paragraph 1 (Minimum Commitment) in Exhibit A Section B. (Manufacturing Services) have been fulfilled, or (ii) Stellartech has waived such requirements. If Stellartech does not seek such extension but is permitted to do so, Company nonetheless hereby grants to Stellartech a right of first refusal to manufacture under the terms hereof any Products Company seeks to have manufactured by a third party after termination or expiration of this Agreement, which manufacturing right shall continue until the such requirements in Exhibit A Section. B. 1. (Minimum Commitment) have been fulfilled.

6.        GRANT OF RIGHTS; INTELLECTUAL PROPERTY

6.1     Rights in Deliverables. Effective upon receipt of the corresponding full payment due to Stellartech, and subject to the terms and conditions hereof, Stellartech will and does hereby assign to Company all right, title, and interest in and to any and all inventions, original works of authorship, developments, designs, improvements, trade secrets or other subject matter developed under Company's funding in the course of Stellartech's performance of the Services hereunder (together with all Intellectual Property rights therein, collectively, "Inventions").

6.2     Patent and Copyright Registration. Subject to the terms and conditions hereof, Stellartech agrees to assist Company in every lawful way at Company's request and expense to obtain, prepare and prosecute applications for, and to perfect title to, rights in the United States or foreign countries, letters patent, and copyright registrations covering Inventions assigned hereunder to Company. Such obligations shall continue beyond the expiration or termination of the Agreement upon Company's request, provided that Company shall continue to compensate Stellartech at its normal rates for time actually spent by Stellartech on such assistance.

June 12, 2006 CONFIDENTIAL Page 4 of 17

6.3     License Rights to Company. Effective and contingent upon full payment to Stellartech in connection with such Deliverables, and subject to the terms and conditions hereof, Stellartech hereby grants and Company accepts the following license rights:

(a)     Stellartech Technology:

(1)     a nonexclusive, nontransferable (except in connection with an assignment or transaction permitted under Section 11.8 (Assignment, successors and Assigns)), worldwide, royalty-free license in the Company Field to use the Stellartech Technology incorporated into the Deliverables to use, sell, offer for sale, and distribute Products within the Company Field. Company shall not otherwise be entitled to use, license or commercially exploit the Stellartech Technology without Stellartech's prior written consent, which may be withheld at Stellartech's sole discretion; any such use may result in the revocation of the license rights herein. The license granted shall permit the use of software object code that is used in Products or Deliverables, but not software source code owned or developed by Stellartech. In the event that Stellartech chooses not to perform continuing services for Company after. Product development is complete, Stellartech and Company agree to negotiate in good faith for Company to obtain a nonexclusive, nontransferable license to such source code, for use in conjunction with the Products. For clarity, upon the expiration, termination or revocation of the Company's Repurchase Option under the Stock Purchase Agreement with respect to all Shares subject thereto, the license granted under this Section 6.3(a)(1) shall become fully-paid.

(2)     following and subject to both (i) satisfaction by Company of the Minimum Commitment, and (ii) termination, expiration or revocation by the Company of the Repurchase Option on any Unreleased Shares under the Stock Purchase Agreement, a nonexclusive, nontransferable (except in connection with an assignment or transaction permitted under Section 11.8 (Assignment, successors and Assigns)), worldwide, royalty-free, fully-paid license within the Company Field to use the Stellartech Technology incorporated into the Deliverables to make and have made Products in the Company Field.

(b)     Other Technology:

(1)     an exclusive, nontransferable (except in connection with an assignment or transaction permitted under Section 11.8 (Assignment, successors and Assigns)), worldwide, royalty-free license within the Company Field under Stellartech's license rights in the Other Technology to use any elements of the Other Technology which are incorporated into the Deliverables, solely for the use, sale, offer for sale, importation and distribution within the Company Field of Products. For clarity, upon the expiration, termination or revocation of the Company's Repurchase Option under the Stock Purchase Agreement with respect to all Shares subject thereto, the license granted under this Section 6.3(b)(1) shall become fully-paid.

(2)     following and subject to both (i) satisfaction by Company of the Minimum Commitment, and (ii) termination, expiration or revocation by the Company of the Repurchase Option on any Unreleased Shares under the Stock Purchase Agreement, an exclusive, nontransferable (except in connection with an assignment or transaction permitted under Section 11.8 (Assignment, successors and Assigns)), worldwide, royalty-free, fully-paid license within the Company Field under Stellartech's license rights in the Other Technology to use any elements of the Other Technology which are incorporated into the Deliverables to make and have made products in the Company Field.

(3)     the exclusive right within the Company Field to prosecute infringers of that portion of Stellartech's license rights in the Other Technology which have been exclusively licensed to Company. In connection therewith Stellartech has the right but not the obligation to participate with Company and to allow its licensors to participate in such activities, including where Stellartech or its licensors determine it is necessary or important to bring or maintain any such enforcement proceeding joining as a party-plaintiff.

June 12, 2006 CONFIDENTIAL Page 5 of 17

(4)     without limiting the foregoing provisions of this Section 6.3(b), if Company notifies Stellartech that it reasonably believes that it is necessary or useful for it to obtain the right to sublicense under the licenses granted to Company pursuant to Section 6.3(b)(1) and (2) above to carry out its business and requests such sublicense rights, then Stellartech agrees to consider such request and negotiate in good faith to the extent it has the right to grant such sublicense rights.

(5)     Stellartech shall not amend or otherwise modify or agree to the amendment or other modification of the Thermage Agreement in any manner or take any other action that would detrimentally affect the rights of Company in the Other Technology licensed hereunder.

Company shall not otherwise be entitled to use, license or commercially exploit the Other Technology or Stellartech Technology without Stellartech's prior written consent, which may be withheld at Stellartech's sole discretion; any such use may result in the revocation of the, license rights herein. The license granted in this Section 6.3(b) (Other Technology) above shall permit the use of software object code that is used in Products or Deliverables. In the event that Stellartech chooses not to perform continuing services for Company after Product development is complete, Stellartech and Company agree to negotiate in good faith for Company to obtain a nonexclusive, nontransferable license to the corresponding source code, for use in conjunction with the Products. Stellartech represents that it has not granted and will not grant conflicting rights to the Other Technology.

6.4.     License and Rights to Stellartech; Retained Rights; Nonexclusivity.

(a)      License Rights. Subject to the terms and conditions hereof, Company hereby grants to Stellartech an unlimited, nonexclusive, irrevocable, worldwide, royalty-free, sublicensable license in the Inventions to use, manufacture, have manufactured, sell, have sold and license products utilizing or incorporating the Inventions, and to otherwise commercially exploit the Inventions, for applications outside of the Company Field.

(b)      Manufacturing and Other Rights. In furtherance of this Agreement and in accordance with the terms and conditions hereof, Company hereby grants to Stellartech the right to develop and manufacture all Products and Deliverables, and all license and other rights in the Inventions and Intellectual Property therein necessary to perform the Services hereunder, in each case in accordance with this Agreement.

(c)      Retained Rights. Company acknowledges and agrees that notwithstanding the provisions of Section 6.1 (Rights in Deliverables) above and except as otherwise expressly provided herein, Stellartech and Stellartech's licensors retain all right, title and interest and sole ownership rights in any and all Stellartech Technology and the Other Technology utilized to perform the Services or embodied in the Deliverables and Products delivered to Company.

(d)      Nonexclusivity. Nothing shall restrict or prevent Stellartech from using any ideas, concepts, know-how, methodology, techniques or other Intellectual Property related to the Services, Deliverables or Products (Working Rights), provided that the use of any Working Rights does not infringe any patent, copyright, trademark or trade secret rights exclusively owned Company, or result in an intentional breach of the provisions of Section 7 (Confidential Information). For clarity, this Section 6.4(d) is not intended to expand Stellartech's rights in the Inventions beyond the scope expressly granted in Section 6.4(a).

June 12, 2006 CONFIDENTIAL Page 6 of 17

7.         CONFIDENTIAL INFORMATION

7.1     The parties hereby agree that: (a) any Confidential Information received by either party (the "Receiving Party") from the other party (the "Disclosing Party") under this Agreement, whether for the Receiving Party's own internal use or otherwise, and whether provided orally, in writing or in any other medium, is and shall be treated as the confidential property of the Disclosing Party; (b) the Receiving Party shall hold such Confidential Information in strictest confidence and shall exercise at least the same degree of care as it uses with its own valuable information of a similar nature (but in no event less than reasonable care) to safeguard the confidentiality of such Confidential Information; and (c) except as provided in this Agreement (including as reasonably necessary to fulfill its obligations hereunder or exercise the rights granted hereunder), the Confidential. Information shall not be used, duplicated or in any way disclosed to others in whole or in part without the prior express written permission of Disclosing Party. As used herein, the term "Confidential Information" means, collectively, any technological, business, product or marketing-related information of the Disclosing Party and any documentation, information and intellectual property rights related thereto, or any part or component thereof, as well as all specifications, processes, drawings, memoranda, data, technical or business information or trade secrets, confidential knowledge, data or other proprietary information relating to products, processes, inventions, developments, improvements, know-how, designs, formulas, developmental or experimental work, computer programs, data bases, other original works or authorship, customer lists, business plans, financial information or other subject matter pertaining to or of possible use in any present or prospective business of either party or any of either party's other clients, consultants, or licensee's, in each case received by the Receiving Party directly or indirectly from the Disclosing Party hereunder; provided that: (a) disclosures in written or other tangible form are expressly marked with a confidential or proprietary legend; and (b) oral disclosures and tangible embodiments in a form other than written are identified as confidential or proprietary at the time of disclosure and are thereafter reduced to writing and provided to the Receiving Party within 30 days after the oral disclosure. Notwithstanding the above, Stellartech Technology^.shall be considered Confidential Information without the necessity of marking. Likewise, notwithstanding the above, all Inventions shall be deemed to be Confidential Information of Company without the necessity of marking or otherwise.

7.2     The prohibition on disclosure set forth above shall not apply to disclosures by the Receiving Party to its employees, consultants and other similar third parties who need to know the information to perform the activities contemplated under the Agreement, provided such disclosures are reasonably necessary to the Receiving Party's performance hereunder or use of Products delivered or rights granted hereunder in accordance with this Agreement, and provided further that the Receiving Party shall take all reasonable steps necessary to insure that such persons or entities to whom disclosure is to be made shall have been advised of the confidential nature thereof and shall be under an express written obligation to maintain such confidentiality and to be bound by terms and conditions of confidentiality at least as restrictive as the obligations of this Section 7.

7.3     This Section 7 shall not apply to information received from the Disclosing Party which (a) is or becomes publicly available through no fault of the Receiving Party, (b) is declared not confidential in writing by the Disclosing Party, (c) is lawfully obtained without violation of any confidentiality obligations from third parties, (d) was developed independent of the Confidential Information of the Disclosing Party, as shown by written records prepared contemporaneously with such independent development, or (e) is required by law to be disclosed by Receiving. Party; provided in the event the Receiving Party is required by law to disclose Confidential Information of the Disclosing Party, the Receiving Party may disclose such Confidential Information only to the extent necessary to comply therewith and provided further that to the extent possible the Receiving Party shall provide the Disclosing Party with reasonable advance notice thereof to enable the Disclosing Party to seek a protective order to prevent such disclosure.

June 12, 2006 CONFIDENTIAL Page 7 of 17

8.         ACCEPTANCE

Deliverables shall be deemed accepted by Company fifteen (15) days after delivery or redelivery by Stellartech (the "Acceptance Period"), unless Company provides Stellartech with a written notice during the Acceptance Period of any material defects in the Services or Deliverables which prevent the Services or Deliverables from substantially conforming to the specifications, if any. Upon receipt of such notice and verification by Stellartech of a substantially nonconforming condition, Stellartech will use commercially reasonable efforts to correct and redeliver such Services and/or Deliverables at the applicable time and materials rates and costs under this Agreement. If after the second redelivery of the same Service or Deliverable, the Service or Deliverable still fails to substantially meet the foregoing requirements, Company's sole and exclusive remedy shall be to elect to either (a) mutually agree to continue the above process, or (b) terminate the Agreement. Notwithstanding the above, Company will not be permitted to terminate the Agreement under this Section 8 and Stellartech will not be required to re-perform Services or revise and redeliver Deliverables if the failure of the Services or Deliverables to substantially meet the specifications is the result of (i) modification or repair of the Services or Deliverables by Company or any third party, (ii) problems or errors which are not generated by the Services or Deliverables as delivered by Stellartech to Company, provided that such problems are not caused by the Services or Deliverables, (iii) failure or incompatibility of computer hardware, equipment or software not specified by or supplied by Stellartech, (iv) improper installation or use of the Services or Deliverables, or (v) accident, neglect, failure of electric power, storage or use in improper or adverse environmental conditions, misuse, negligence, or 'act of God. Without limiting the foregoing, upon request by Company, the parties will enter into a quality agreement on mutually acceptable terms and conditions pursuant to which (A) the parties will outline their respective rights and responsibilities with respect to regulatory matters including reporting obligations to regulatory authorities and (B) Stellartech will provide Company access to information and documentation with respect to the Products reasonably necessary for Company to file for and obtain clearances to commercialize the Products. [E&S Note: (A) and (B) - as revised - cover the matter adequately]

9.         WARRANTY

9.1     Stellartech shall perform the Services hereunder in a professional and workmanlike.

9.2     Products sold by Stellartech to Company will have a warranty covering defective materials or workmanship and failure to substantially conform to the production level specification approved by the parties for a period ending either one year after the date Company or Company's distributors or dealers first ships the Product to a customer, or eighteen months after Stellartech ships the Product to Company, whichever period is less (the "Warranty Period"). Upon notification and receipt of a defective Product during the Warranty Period, Stellartech will repair or replace the defective Product at no cost. For all other repairs, Stellartech will repair or replace defective Products using labor and material rates set forth in Exhibit B within the section, entitled "Manufacturing Formula, Manufacturing Direct Labor Rates," or equivalent. The minimum charge for such repair or replacement shall be $250.00.

June 12, 2006 CONFIDENTIAL Page 8 of 17

9.3     Each party represents and warrants to the other that: (i) it has the right to enter into this Agreement, and (ii) the execution and delivery by such party of this Agreement and the performance of all obligations of such party hereunder, have been duly authorized by all necessary corporate and shareholder action.

10.       DISCLAIMERS; LIMITATION OF DAMAGES AND LIABILITY; INDEMNIFICATION

10.1.  DISCLAIMER OF WARRANTIES. WITH THE EXCEPTION OF THE EXPRESS WARRANTIES IN SECTION 9 (WARRANTY) ABOVE, STELLARTECH MAKES NO WARRANTIES WITH RESPECT TO THE SERVICES, PRODUCTS OR THE DELIVERABLES, EXPRESS, IMPLIED OR STATUTORY, AND STELLARTECH EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF NON-INFRINGEMENT OF THIRD PARTY RIGHTS, MERCHANTABILITY, DESCRIPTION AND FITNESS FOR A PARTICULAR PURPOSE. IN THE CASE OF A BREACH OF WARRANTY BY STELLARTECH, COMPANY'S SOLE AND EXCLUSIVE REMEDY SHALL BE, AT STELLARTECH'S OPTION, TO (i) PROVIDE THE WARRANTY SET FORTH IN SECTION 9 (WARRANTY), OR (ii) REPERFORM THE DEFECTIVE SERVICES, OR (ii) RECEIVE A PRO RATA REFUND OF A PORTION OF THE FEES RELEVANT TO THE NONCONFORMING SERVICE, PRODUCT OR DELIVERABLE.

10.2  NO CONSEQUENTIAL OR INCIDENTAL DAMAGES. EXCEPT FOR THE COMPANY'S OBLIGATIONS UNDER SECTION 10.4 (INDEMNIFICATION) BELOW, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES ARISING OUT OF, PURSUANT TO OR IN CONNECTION WITH THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFIT OR OTHER MONETARY LOSS, EVEN IF A PARTY IS ADVISED IN WRITING IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES.

10.3  LIMITATION OF LIABILITY. EXCEPT FOR THE COMPANY'S OBLIGATIONS UNDER SECTION 10.4 (INDEMNIFICATION) BELOW, IN NO EVENT WILL STELLARTECH'S TOTAL, AGGREGATE LIABILITY UNDER THIS AGREEMENT FOR ALL CLAIMS BY THE COMPANY OR ANY THIRD PARTY OF WHATEVER NATURE EXCEED THE LESSER OF THE MONIES RECEIVED BY STELLARTECH FROM COMPANY PURSUANT TO THIS AGREEMENT DURING THE PRIOR THREE (3) MONTH PERIOD PRECEEDING THE EVENT GIVING RISE TO LIABILITY, MINUS ALL CLAIMS PREVIOUSLY PAID HEREUNDER, OR $50,000. THIS LIMITATION IS CUMULATIVE FOR ALL CLAIMS HOWSOEVER ARISING UNDER ALL AGREEMENTS, AND THIS LIMITATION SHALL APPLY EVEN IF THE REMEDIES PROVIDED IN THIS AGREEMENT SHALL FAIL OF THEIR ESSENTIAL PURPOSE.

10.4.  Indemnification.

(a)     For all Products, Deliverables and Services delivered hereunder (and if Company develops a product, process or service based in whole or part on a Product or Deliverable), Company assumes full responsibility for final review, testing and approval. Company also assumes all responsibility for any information and/or specifications it provides to Stellartech regarding the Services, Products or Deliverables and agrees that Stellartech may rely on such information and/or specifications without independent verification.

June 12, 2006 CONFIDENTIAL Page 9 of 17

(b)     Company will indemnify, defend and hold Stellartech harmless from and against any and all claims, damages, losses and expenses (including reasonable attorneys' fees) by a third party arising out of or resulting from or otherwise related to the performance of Services or the provision of Deliverables or the Products to be provided by Stellartech hereunder, or the material breach by Company of any of its representations or warranties hereunder, including, without limitation, (i) claims related to patent or other intellectual property infringement (including any infringement claims by Thermage), product liability, fraud or breach of warranty by Company and (ii) from any liabilities in connection with its or a third party's use of the Services, Products or Deliverables, including but not limited to circumstances where a third party alleges that it has been damaged by a defect in a Product or Deliverable, except to the extent any such claims, damages, losses and expenses are attributable to a material breach by Stellartech of its express warranties under this Agreement or to its gross negligence or willful misconduct. Stellartech may participate in any such defense or settlement with counsel of its own choosing at Stellartech's expense.

(c)     Stellartech will indemnify, defend and hold Company harmless from and against any and all claims, damages, losses and expenses (including reasonable attorneys' fees) by a third party against Company arising out of or resulting from the willful misconduct of Stellartech hereunder. Company may participate in any such defense or settlement with counsel of its own choosing at Company's expense.

11.       GENERAL PROVISIONS.

11.1   Independent Contractor Status. The parties agree that the relationship between Stellartech and Company is that of independent contractors. No employment, joint venture, partnership or similar relationship is formed by this Agreement, and neither party shall have any authority to act for or bind the other.

11.2   Taxes. The fees set forth herein do not include any sales or use taxes now or hereafter enacted, or without limitation any federal, local or other governmental taxes which would normally be the responsibility of Company, including duties, licenses, fees, excises or tariffs, that are applicable to the Services ("Taxes"). Company agrees to pay and indemnify Stellartech from and against all Taxes, and any interest and penalties associated therewith, whether levied or invoiced at or after the time of Stellartech's performance.

11.3   Notices. All notices required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated: (i) by personal delivery when delivered personally; (ii) by overnight courier upon receipt of written verification of receipt; (iii) by facsimile transmission upon receipt when confirmed by telecopier or facsimile transmission; (iv) by certified or registered mail, return receipt requested, upon verification of receipt, or five (5) days after deposit in the mail. The mailing address and fax number for notice to each party is set forth below. Either party may change its mailing address and fax number by notice as provided by this Section.

June 12, 2006 CONFIDENTIAL Page 10 of 17

 

Notices to Stellartech:	Notices to Company:
Stellartech Research Corporation	TiVaMed, Inc.
1346 Bordeaux Drive	900 Welch Road
Sunnyvale, CA 94089	Palo Alto, CA 94304
Attn: President	Attn: Jonathan Parmer
Fax: 408-331-3101	Fax: 650-326-0114

11.4   Governing Law; Dispute Resolution

This Agreement shall be governed by and interpreted in accordance with the laws of the State of California, excluding its conflicts of law principles. Except for actions seeking injunctive relief, disputes involving nonpayment, or suit to compel compliance with this dispute resolution process, the parties agree to use the dispute resolution procedures set forth in this Section with respect to any controversy or claim arising out of or relating to this Agreement or its breach. The parties will endeavor to settle amicably by mutual discussions any disputes, differences, or claims related to this Agreement. In the event of a qualifying dispute between the parties under this Agreement, the parties agree to promptly meet and confer with the goal of settling such dispute. If the parties are unable to reach a prompt, amicable agreement concerning such dispute, the parties agree to submit the matter to non-binding mediation under the auspices of and according to the rules of the Judicial Arbitration and Mediation Service, Inc., through its San Jose, California office ("J.A.M.S."), by a mediator selected by the parties with expertise in technology and consulting agreements. If the parties cannot agree upon a mediator one will be selected according to J.A.M.S. rules. The mediation fee, if any, shall be divided equally between the parties. Failing the resolution of their dispute by mediation, each party may pursue all options available at law or equity, and the parties hereby submit to the jurisdiction of any state or federal court located in Santa Clara County, California. If any action at law or equity is brought by either party in connection with this Agreement, the prevailing party shall be entitled to receive its costs, expert witness fees and reasonable attorneys' fees, including necessary disbursements and costs and fees on appeal, in addition to any other relief to which such party may be entitled.

11.5   Publicity. Except as otherwise required by applicable law, any proposed advertising, press releases or other publicity which discusses the Agreement, a project under this Agreement, or Stellartech's role in the development of Products or Deliverables hereunder shall require the prior written consent of both parties.

11.6   Force Majeure. Neither party shall be liable hereunder by reason of failure or delay in the performance of its obligations hereunder (except for the payment of money) on account of strikes, shortages, riots, insurrection, war, acts of terrorism, fires, flood, storm, explosions, earthquakes, acts of God, governmental action, labor conditions, or any other cause which is beyond the reasonable control of the party.

11.7   Waiver. No term or provision hereof will be considered waived by either party, and no breach excused- by either party, unless such waiver or consent is in writing signed on behalf of the party against whom the waiver is asserted. No consent by either party to, or waiver of, a breach by either party, whether express or implied, will constitute consent to; waiver of, or excuse of any other, different, or subsequent breach by either party.

11.8   Assignment, Successors and Assigns. Neither party may assign its rights or obligations arising under this Agreement without the other party's prior written consent, provided, however, that either party may assign this Agreement without such consent to an entity that acquires a majority of its equity or all or substantially all assets of the assigning party to which this Agreement relates. Any such attempted assignment shall be void. This Agreement will be for the benefit of the permitted successors and assigns, and will be binding on heirs, legal representatives and permitted assignees.

June 12, 2006 CONFIDENTIAL Page 11 of 17

 

11.9   Severability, Headings and Counterparts. If a court of competent jurisdiction finds any provision of this Agreement invalid or unenforceable, that provision will either be amended to achieve as nearly as possible the intent of the parties, or if amendment is not possible the offending provision shall be deemed struck, and the remainder of this Agreement will remain in full force and effect. The captions and other headings in this Agreement are for convenience only and shall not be considered a part of or effect the construction and interpretation of any provision of this Agreement. The Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

11.10 Survival. In addition to the provisions that survive pursuant to Section 5.3, the provisions in Sections 7 (Confidential Information), 10 (Disclaimers; Limitation of Damages and Liability; Indemnification) 11 (General Provisions), and Exhibits A, B, C and D (to the extent expressly provided therein or necessary to affect the purpose of the provisions therein) shall survive the expiration or termination of this Agreement.

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June 12, 2006 CONFIDENTIAL Page 12 of 17

11.11. Entire Agreement. This Agreement and all Exhibits and Attachments thereto constitutes the entire agreement between the parties with regard to its subject matter, supersedes all prior or contemporaneous agreements, commitments, representations, writings, and discussions between the parties, whether oral or written, and there are no other agreements, representations, warranties, or commitments which may be relied upon by either party. The parties expressly acknowledge that they are represented by legal counsel and that they have read and understand the terms of this Agreement. This Agreement may be amended only by an instrument in writing executed by the parties.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the first date written above.

COMPANY		Stellartech Research Corporation
By:	/s/Jonathan Parmer	By:	/s/ Roger A. Stern, Ph.D.
Name:	Jonathan Parmer	Name:	Roger A. Stern, Ph.D.
Title:	President & CEO	Title:	President

June 12, 2006 CONFIDENTIAL Page 13 of 17

Exhibit A

A.    Development Services

Stage 1: Specification and Prototype Development Stage

Research, engineering, design, and specification and prototype development of RF Generators, hand pieces, and treatments tips (the "Product"). Charges will be billed on a time and materials basis using rates in Exhibit B, Section A, "Engineering, Design, and Prototyping Rates".

Stage 2: Clinical Development Stage

Engineering and production of Product, suitable for testing in humans and to include documentation and controls suitable for obtaining Investigational Device Exemption approval, Food and Drug Administration approval to market and "CE" mark approval, as mutually agreed upon. Charges will be billed on a time and materials basis using rates in Exhibit B, Section A, (Engineering, Design, and Prototyping Rates).

B.    Manufacturing Services

1.     Minimum Commitment. Stellartech and Company agree that Stellartech will manufacture at least the first 300 units of the Product for Company (i.e., 300 units of the RF generator component, and all associated hand pieces and treatment tips to be used with the RF generator component until such time as all 300 units of the RF generator component have been purchased from Stellartech). Additionally, for a period of time up to and including thirty-six (36) months following Company's receipt of written notice of regulatory clearance to market the Product in the United States (the "Exclusivity Period"), Stellartech will be the exclusive supplier of Product to Company.

2.     Transfer Price. Stellartech agrees to sell Product to the Company at a per-unit Transfer Price calculated using the formula in Exhibit B, Section B, (Manufacturing Formula, Manufacturing Direct Labor Rates).

3.     Forecasts. To facilitate Stellartech's production scheduling, Company shall provide Stellartech with a quarterly rolling forecast of Company's anticipated quarterly requirements of Products for the following 12 month period commencing on the date of such forecast. This forecast shall be for Stellartech's planning purposes only and non-binding on either party. It is understood that Company shall use reasonable efforts to make each forecast as accurate as possible.

4.     Ordering Process. Company will submit written purchase orders for Products or spare parts to Stellartech with a lead time of at least 90 days prior to the requested delivery date with respect to Products or spare parts ordered therein, and Stellartech shall use commercially reasonable best efforts to deliver any such Products or spare parts in accordance with the terms of corresponding accepted purchase orders.

June 12, 2006 CONFIDENTIAL Page 14 of 17

Exhibit B

A.   Engineering, Design, and Prototyping Rates. Stellartech will bill for design and development services at the following rates.

Administrative Services	$35.00/hr
Assembly	$45.00/hr	Documentation/Drafting	$60.00/hr
Technician	$65.00/hr	Industrial/Graphic Design	$90.00/hr
Engineer	$105.00/hr	Senior Engineer	$125.00/hr
Senior Project Manager	$150.00/hr	Senior Executive Manager	$185.00/hr

Stellartech agrees to hold these prices constant through December 31, 2006. Rate increases may not exceed ten percent (10%) in any given twelve (12) month period without prior written consent of Company. Materials, expenses, and outside services are billed at cost plus twenty percent (20%). Out-of-town trips are charged at ten (10) hours per day.

B.    Manufacturing Formula, Manufacturing Direct Labor Rates. Stellartech agrees to compute a Transfer Price according to the formula:

Transfer Price = [(Direct Labor Costs x 3.0) + (Material Costs x 1.2)] * 1.538

Direct labor rates for manufacturing in effect through December 31, 2006 are:

Assembler	$17.50/hr	Technician	$27.00/hr
Engineer	$35.00/hr

Stellartech agrees to hold these prices constant through December 31, 2006. Rate increases may not exceed ten percent (10%) in any given twelve (12) month period without prior written consent of Company.

C.    Invoicing; Payments; Late Fees. Stellartech shall render invoices for the fees and costs herein monthly, semi-monthly or on such other longer basis as it deems appropriate. All payments shall be due within thirty (30) days of invoicing and shall be deemed in default if not received within fifteen (15) days of the due date. Accounts in default are subject to a service charge on the outstanding balance of the lesser of 1% per month or the maximum amount permitted by law. Stellartech may suspend or cease performance and seek all remedies available for accounts in default and Company agrees to reimburse Stellartech its reasonable expenses, including attorneys' and other fees incurred in collecting amounts due, and payments received after default shall be applied against interest, expenses, and principal as Stellartech determines in its sole discretion.

D.    Equity. Company and Stellartech have in parallel with the execution of this Agreement entered into the Stock Purchase Agreement pursuant to which Stellartech shall purchase 300,000 shares in the Common Stock of the Company representing 7.5% of the fully diluted outstanding capital stock of the Company as of the Effective Date under the terms and conditions of the Stock Purchase Agreement, attached hereto and incorporated herein as Exhibit D.

June 12, 2006 CONFIDENTIAL Page 15 of 17

Exhibit C

Definitions

1.0      Definitions. The capitalized terms in this Agreement which are not otherwise defined in the body of the Agreement shall have the meanings ascribed below.

1.1     "Company Field" means Transmucosal rejuvenation, reconstruction or other treatment of the vagina or vulva, where "Transmucosal" means through a mucosal surface; provided however, the Company Field shall exclude treatment for cosmetic aesthetic surgery and collagen contraction of skin.

1.2     "Deliverable" means a specific, unique deliverable or Product developed and/or manufactured and sold by Stellartech to Company pursuant to the Agreement.

1.3     "Derivative Work" means any modification or extension of any current invention, process, algorithm, software program, trade secret, work of authorship or other Intellectual Property right.

1.4     "Development Services" means the services as described in the corresponding section of Exhibit A to the Agreement.

1.5     "Intellectual Property" means copyright rights in any and all copyrightable works (including, without limitation, rights in written work, designs, software, moral rights, authors rights, and the exclusive, world-wide right to use, reproduce, modify, distribute, publicly display and publicly perform the copyrighted work), trademark rights (including, without limitation, trade names, trademarks, service marks, trade dress and look and feel), patent rights (including, without limitation, the exclusive right to make, have made, use and sell), trade secret rights (including, without limitation, formulae, designs, processes, techniques, ideas, artwork, algorithms, rights to technical developments, designs, business methods, business processes and inventions whether or not patentable), right of publicity, contract and licensing rights, goodwill, know-how, any invention or other new or useful art, discovery or improvement, and all other intellectual property and intangible rights as may exist now and/or hereafter come into existence and all renewals and extensions thereof, regardless of whether such rights arise under the law of the United States or any other state, country or jurisdiction.

1.6     "Manufacturing Services" means the services described in the corresponding section of Exhibit A to the Agreement.

1.7     "Products" means products designed, manufactured and/or sold to Company by or for Stellartech.

1.8     "Stellartech Technology" means any trade secret, process, algorithm, invention, original works of authorship, development, design, improvement, patent, copyright or other Intellectual Property of Stellartech which Stellartech (a) developed or acquired prior to the commencement of this Agreement, (b) acquired after the commencement hereof independent of this Agreement, or (c) developed either alone or in collaboration with others, separate and apart from this Agreement, and all Derivative Works based thereon.

June 12, 2006 CONFIDENTIAL Page 16 of 17

1.9     "Other Technology" means those Intellectual Property license rights granted to Stellartech pursuant to that certain "Development and Supply Agreement" between Stellartech and Thermage dated as of October 1, 1997 (the "Thermage Agreement"), a true and accurate copy of which agreement has been provided to Company.

1.10   "Services" means the Manufacturing Services and/or the Development Services.

June 12, 2006 CONFIDENTIAL Page 17 of 17

EX-10

Exhibit 10.28

AMENDED AND RESTATED DEVELOPMENT AND MANUFACTURING AGREEMENT

This Amended and Restated Development and Manufacturing Agreement (the "Agreement") is made and entered into as of 4^th day of Oct 2007 (the "Execution Date") by and between Stellartech Research Corporation ("Stellartech), a California corporation with a principal place of business at 1346 Bordeaux Drive, Sunnyvale, CA 94089, and TiVaMed, Inc. ("Company"), a Delaware Corporation with a principal place of business at 900 Welch Road, Palo Alto, California 94304 (each referred to below as a "party" or collectively as the "parties").

WHEREAS, Company and Stellartech previously entered into a Development and Manufacturing Agreement dated Tune 12, 2006 (the "Original Agreement") for the performance of development and manufacturing services by Stellartech for the Company, and the license of certain intellectual property rights to each party as described therein.

WHEREAS, Company and Stellartech mutually desire to amend the Original Agreement, and to include additional or different terms as set forth in this amended and restated version of the Original Agreement.

WHEREAS, to the extent possible, all terms in this Agreement shall be deemed to be effective as of the effective date of the Original Agreement (the "Effective Date").

WHEREAS, Company and Stellartech have in parallel with the execution of the Original Agreement entered into a stock purchase agreement (the "Stock Purchase Agreement") pursuant to which Stellartech had the right to purchase 300,000 shares in the Common Stock of the Company representing 7.5% of the fully diluted outstanding capital stock of the Company as of the Effective Date (the "Shares") under the terms and conditions of the Stock Purchase Agreement, attached hereto and incorporated herein as Exhibit D.

NOW THEREFORE, in consideration of the mutual covenants and undertakings hereinafter set forth, the parties hereby agree as follows:

1.         DEFINITIONS

The capitalized terms in this Agreement which arc not otherwise defined in the body hereof shall have the meanings ascribed in Exhibit C below.

2.         DEVELOPMENT AND MANUFACTURING; OBLIGATIONS OF STELLARTECH

2.1     Stellartech, as an independent contractor, agrees to provide to Company (i) the Development Services, and (ii) the Manufacturing Services, (individually, or collectively, the "Services") as described in Exhibit A.

2.2     Stellartech shall use commercially reasonable efforts to perform and promptly complete the Services.

2.3     Stellartech will determine the method, details and means of performing its Services in accordance with this Agreement.

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2.4     Stellartech agrees to accept exclusive liability for the payment of payroll taxes, self-employment taxes, and social security and other contributions that are based on the non-equity based compensation to be paid to Stellartech under this Agreement and on the wages or other compensation paid to any agents or employees of Stellartech. Stellartech agrees to indemnify and defend Company against all such taxes or contributions.

3.         COMPANY RESPONSIBILITIES

3.1     Company shall use commercially reasonable efforts to perform and promptly complete the services and obligations it is responsible for as set forth herein and in the Exhibits.

3.2     Company shall supply and make available to Stellartech, at Company's sole expense, access to information, services, systems and reasonable assistance over which Company has control or possession and as reasonably requested by Stellartech for the performance its Services under this Agreement, and as are suitable and adequate for the performance of Stellartech's Services.

3.3     In consideration for Stellartech's Services, Company shall pay to Stellartech the applicable compensation set forth below, and agrees to accept exclusive liability for compliance with all laws, rules and regulations, applicable to Company, for any equity based consideration provided by Company to Stellartech under the Stock Purchase Agreement.

4.         COMPENSATION

Stellartech shall be paid fees in the amounts and at the times set forth in Exhibit B.

5.         TERM

5.1     Term of Agreement. This Agreement will commence and become effective on the Effective Date and shall continue in effect until three (3) years thereafter, unless earlier terminated as set forth in Section 5.2 (Termination). This Agreement may be renewed for additional periods upon the written agreement by Company and Stellartech, or extended under Section 5.6 (Extension of Term) below.

5.2     Termination. This Agreement may be terminated as follows:

(a)     by a party by giving the other party written notice of termination if any of the following events should occur: (i) if the other party admits in writing its inability to pay its debts as they mature or makes an assignment for the benefit of creditors; (ii) if a petition under the United State Bankruptcy Act, as it now exists or as it may be amended, or any similar law of any other jurisdiction, is filed concerning the other party and, if filed by a third party is not dismissed within sixty (60) days of such filing; or (iii) if a petition is filed by any third party, or an application for a receiver of the other party, is made by anyone and such petition or application is not resolved favorably to that party within sixty (60) days;

(b)     if the other party materially breaches this Agreement and, assuming such breach is capable of cure, fails to cure the same within thirty (30) days after written notice specifying the breach, the non-breaching party giving notice may, at its option, terminate this Agreement immediately upon a further written notice to the breaching party;

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(c)     at any time, upon the mutual written agreement of the parties;

by either party for its convenience, following the completion of Development Services and the onset of Manufacturing Services under the Agreement, at which time the Company may terminate the Agreement with thirty (30) days prior written notice to Stellartech, and Stellartech may terminate the Agreement with one hundred eighty (180) days prior written notice to Company.

5.3     Effect of Termination. Upon termination or expiration of this Agreement for any reason:

(a)     Company will pay Stellartech any undisputed amounts then due and for any Services rendered and Products and Deliverables developed, manufactured or sold, and the fees, costs and expenses for Services which have been actually performed as of the effective date of termination and reasonable wind-down costs, as mutually agreed upon by the parties, for Stellartech's efficient discontinuation of the Services, up to and including the thirty (30) day period following the date of notice of termination;

(b)     all rights and obligations under this Agreement will immediately cease except with respect to those provisions that survive pursuant to Section 11.10 (Survival) below or as expressly provided in this Article 5;

(c)     except as otherwise expressly provided herein each party will promptly cease use of and return all Confidential Information provided by the other party under this Agreement; and

(d)     all licenses granted hereunder will terminate, with the exception of licenses: (i) granted by Stellartech to Company under Section 6.3(b) (Other Technology) which will continue if and only if Company terminates its Repurchase Option of any then Unreleased Shares under the Stock Purchase Agreement or if 100% of the Shares purchased thereunder have otherwi ,o vested in full and are free of any Repurchase Option or risk of forfeiture under the Stork Purchase Agreement, in which case such license rights shall become fully-paid; provided however, such licenses shall not survive in the event of a termination of this Agreement pursuant to Section 5.2(a) or 5.2(b) by Stellartech as a result of Company's bankruptcy or material brcach, respectively and (ii) granted by Company to Stellartech under Section 6.4 (Grant of Rights; Intellectual Property). Additionally and notwithstanding the above, if the Agreement extends until the end of the full term in Section 5.1 (Term of Agreement), then the license to the Company under Section 6.3 (a) (Stellartech Technology) shall survive termination.

(e)     the Company's Repurchase Option under the Stock Purchase Agreement will immediately expire, and 100% of the then-Unreleased Shares shall immediately vest and be released from the Repurchase Option.

(f)     notwithstanding Sections 5.3 (d) and (e) above, Company may opt at the time of termination hereof to relinquish its license rights to the Stellartech Technology and Other Technology granted under Section 6.3(a) (Stellartech Technology) and 6.3(b) (Other Technology), respectively, through written notice to Stellartech. In such event, all license and other rights under Section 6.3 (License Rights to Company) or otherwise granted hereunder shall cease and be immediately revoked, and Stellartech's continued vesting in any then Unreleased Shares under the Stock Purchase Agreement shall cease.

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(g)     notwithstanding anything expressed or implied in this Agreement, such termination or expiration of this Agreement shall not affect any rights, as incorporated in or applicable to the Products, of any third party that, at any time, acquires a Product from Company.

5.4     Cooperation After Termination. Following (i) a proper notice of termination of the Agreement, or (ii) upon expiration of the Agreement, the parties shall cooperate with each other in the winding up of Stellartech's pending work on behalf of Company including mitigating any amounts incurred by Stellartech with respect thereto and assisting Company to transition manufacturing activities, and Stellartech will be compensated at the rates set forth herein and for any expenses and costs incurred; provided that such obligations of Stellartech shall be contingent upon Company having paid to Stellartech all amounts owing to Stellartech hereunder. Without the prior written consent of the other party and except as reasonably necessary to exercise any license surviving hereunder, neither party shall be entitled to retain and shall not retain copies of any Confidential Information or other information owned by the other party at, except in all cases each party may retain one (1) copy of such information for archival purposes, or copies as may be required by law or regulation.

5.5     Return of Materials. Each party agrees that, at the time of termination and at any other time upon request, it will deliver to the other party (and will not keep in its possession or deliver to anyone else) any and all devices, parts, materials, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, equipment, other documents or property, or reproductions of any aforementioned items belonging to the other party, its successors, or assigns, except such materials subject to the rights granted to Stellartech under Section 6.4 (License and Rights to Stellartech; Retained Rights; Nonexclusivity) or reasonably necessary for Company to exercise any surviving licenses under Section 6.3 (License Rights to Company). Without limiting the foregoing, neither party will, during the term of the Agreement or thereafter, deliver or transfer to any person, or use, without authorization by the other party, any property owned by the other party.

5.6     Extension of Term. Except in the event of termination under Section 5.2 (Termination) above, if the requirements in Paragraph 1 (Minimum Commitment) in Exhibit A Section B (Manufacturing Services) have not been fulfilled at the time of Agreement expiration, Stellartech shall have the option to extend the term hereof by written notice until (i) the minimum purchase and exclusive manufacturing requirements in Paragraph 1 (Minimum Commitment) in Exhibit A Section B. (Manufacturing Services) have been fulfilled, or (ii) Stellartech has waived such requirements.

6.         GRANT OF RIGHTS; INTELLECTUAL PROPERTY

6.1     Rights in Deliverables. Effective upon receipt of the corresponding full undisputed payment due to Stellartech, and subject to the terms and conditions hereof, Stellartech will and does hereby irrevocably assign, transfer, and convey to Company all right, title, and interest in and to any and all inventions, original works of authorship, developments, designs, improvements, trade secrets or other subject matter developed under Company's funding in the course of Stellartech's performance of the Services hereunder (together with all Intellectual Property rights therein, collectively, "Inventions").

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6.2     Patent and Copyright Registration. Subject to the terms and conditions hereof, Stellartech agrees to assist Company in every lawful way at Company's request and expense to obtain, prepare and prosecute applications for, and to perfect title to, rights in the United States or foreign countries, letters patent, and copyright registrations covering Inventions assigned hereunder to Company. Such obligations shall continue beyond the expiration or termination of the Agreement upon Company's request, provided that Company shall continue to compensate Stellartech at its normal rates for time actually spent by Stellartech on such assistance.

6.3     License Rights to Company. Effective and contingent upon full payment of undisputed amounts to Stellartech in connection with such Deliverables, and subject to the terms and conditions hereof, Stellartech hereby grants and Company accepts the following license rights.

(a)     Stellartech Technology:

(1)     a nonexclusive, nontransferable (except in connection with an assignment or transaction permitted under Section 11.8 (Assignment, successors and Assigns), or as incorporated in a Product as distributed by Company as permitted hereunder), worldwide, royalty-free license in the Company Field to use the Stellartech Technology incorporated into the Deliverables to use, sell, offer for sale, import, and distribute (itself and through Company's distribution channel) Products within the Company Field. The license granted shall permit the use of software object code of Stellartech Technology that is used in Products or Deliverables, but, unless otherwise provided in this Agreement, not software source code owned by Stellartech. In the event that Stellartech does not perform continuing services for Company after Product development is complete, Stellartech and Company agree to negotiate in good faith for Company to obtain a nonexclusive, nontransferable license to such source code, for use in conjunction with the Products. For clarity, upon the expiration, termination or revocation of the Company's Repurchase Option under the stock Purchase Agreement with respect to all Shares subject thereto, the license granted under this Section 6.3(a)(1) shall become fully-paid.

(2)     following and subject to both (i) satisfaction by Company of the Minimum Commitment, and (ii) termination, expiration or revocation by the Company of the Repurchase Option on any Unreleased Shares under the Stock Purchase Agreement, a nonexclusive, nontransferable (except in connection with an assignment or transaction permitted under Section 11.8 (Assignment, successors and Assigns)), worldwide, royalty-free, fully-paid license within the Company Field to use the Stellartech Technology incorporated into the Deliverables to make and have made Products in the Company Field.

(b)     Other Technology:

(1)     an exclusive (even as to Stellartech), nontransferable (except in connection with an assignment or transaction permitted under Section 11.8 (Assignment, successors and Assigns) or as incorporated in a Product as distributed by Company as permitted hereunder), worldwide, royalty-free license within the Company Field under Stellartech's license rights in the Other Technology to use any elements of the Other Technology which are incorporated into the Deliverables, solely for the use, sale, offer for sale, importation and distribution (by Company and via Company's distribution channel) within the Company Field of Products. For clarity, upon the expiration, termination or revocation of the Company's Repurchase Option under the Stock Purchase Agreement with respect to all Shares subject thereto, the license granted under this Section 6.3(b)(1) shall become fully-paid.

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(2)     following and subject to both (i) satisfaction by Company of the Minimum Commitment, and (ii) termination, expiration or revocation by the Company of the Repurchase Option on any Unreleased Shares under the Stock Purchase Agreement, an exclusive, nontransferable (except in connection with an assignment or transaction permitted under Section 11.8 (Assignment, successors and Assigns)), worldwide, royalty-free, fully-paid license within the Company Field under Stellartech's license rights in the Other Technology to use any elements of the Other Technology which are incorporated into the Deliverables to make and have made Products in the Company Field.

(3)     the exclusive right within the Company Field to prosecute infringers of that portion of Stellartech's license rights in the Other Technology which have been exclusively licensed to Company. In connection therewith Stellartech has the right but not the obligation to participate with Company and to allow its licensors to participate in such activities, including where Stellartech or its licensors determine it is necessary or important to bring or maintain any such enforcement proceeding joining as a party-plaintiff.

(4)     without limiting the foregoing provisions of this Section 6.3(b), if Company notifies Stellartech that it reasonably believes that it is necessary or useful for it to obtain the right to sublicense under the licenses granted to Company pursuant to Section 6.3(b)(I) and (2) above to carry out its business and requests such sublicense rights, then Stellartech agrees to consider such request and negotiate in good faith to the extent it has the right to grant such sublicense rights.

(5)     Stellartech shall not amend or otherwise modify or agree to the amendment or other modification of the Thermage Agreement in any manner or take any other action that would detrimentally affect the rights of Company in the Other Technology licensed hereunder.

Except as otherwise expressly provided in this Agreement, Company shall not otherwise be entitled to use, license or commercially exploit the Other Technology or Stellartech Technology without Stellartech's prior written consent, which may be withheld at Stellartech's sole discretion; any such use may result in the revocation of the license rights herein. The license granted in this Section 6.3(b) (Other Technology) above shall permit the use of software object code for Other Technology that is used in Products or Deliverables. In the event that Stellartech does not perform continuing services for Company after Product development is complete, Stellartech and Company agree to negotiate in good faith for Company to obtain a nonexclusive, nontransferable license to the corresponding source code, for use in conjunction with the Products. Stellartech represents that it has not granted and will not grant conflicting rights to the Other Technology.

6.4     License and Rights to Stellartech; Retained Rights; Nonexclusivity.

(a)     License Rights. Subject to the terms and conditions hereof, Company hereby grants to Stellartech a nonexclusive, non-transferable (except in connection with an assignment or transaction permitted under Section 11.8 (Assignment, successors and Assigns)) worldwide, royalty-free, sublicensable license in the Inventions to use, manufacture, have manufactured, sell, have sold and license products utilizing or incorporating the Inventions, and to otherwise commercially exploit the Inventions, solely for applications outside of the Company Field.

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(b)     Manufacturing and Other Rights. In furtherance of this Agreement and in accordance with the terms and conditions hereof, Company hereby grants to Stellartech the nonexclusive, non-transferable (except in connection with an assignment or transaction permitted under Section 11.8 (Assignment, successors and Assigns)) right to develop and manufacture all Products and Deliverables, and all license and other rights in the Inventions and Intellectual Property therein solely as necessary to perform the Services hereunder, in each case in accordance with this Agreement.

(c)     Retained Rights. Company acknowledges and agrees that notwithstanding the provisions of Section 6.1 (Rights in Deliverables) above and except as otherwise expressly provided herein, Stellartech and Stellartech's licensors retain all right, title and interest and sole ownership rights in any and all Stellartech Technology and the Other Technology utilized to perform the Services or embodied in the Deliverables and Products delivered to Company.

(d)     Nonexclusivity. Nothing in this Agreement shall restrict or prevent Stellartech from using any ideas, concepts, know-how, methodology, techniques or other Intellectual Property related to the Services, Deliverables or Products (Working Rights), provided that the use of any Working Rights does not infringe any patent, copyright, trademark or trade secret rights exclusively owned by Company, or result in an intentional breach of the provisions of Section 7 (Confidential Information). For clarity, this Section 6.4(d) is not intended to expand Stellartech's rights in the Inventions beyond the scope expressly granted in Section 6.4(a).

7.         CONFIDENTIAL INFORMATION

7.1     The parties hereby agree that: (a) any Confidential Information received by either party (the "Receiving Party") from the other party (the "Disclosing Party") under this Agreement, whether for the Receiving Party's own internal use or otherwise, and whether provided orally, in writing or in any other medium, is and shall be treated as the confidential property of the Disclosing Party; (b) the Receiving Party shall hold such Confidential Information in strictest confidence and shall exercise at least the same degree of care as it uses with its own valuable information of a similar nature (but in no event less than reasonable care) to safeguard the confidentiality of such Confidential Information; and (c) except as provided in this Agreement (including as reasonably necessary to fulfill its obligations hereunder or exercise the rights granted hereunder), the Confidential Information shall not be used, duplicated or in any way disclosed to others in whole or in part without the prior express written permission of Disclosing Party. As used herein, the term "Confidential Information" means, collectively, any technological, business, product or marketing-related information of the Disclosing Party and any documentation, information and Intellectual Property rights related thereto, or any part or component thereof, as well as all specifications, processes, drawings, memoranda, data, technical or business information or trade secrets, confidential knowledge, data or other proprietary information relating to products, processes, inventions, developments, improvements, know-how, designs, formulas, developmental or experimental work, computer programs, data bases, other original works or authorship, customer lists, business plans, financial information or other subject matter pertaining to or of possible use in any present or prospective business of either party or any of either party's other clients, consultants, or licensees, in each case received by the Receiving party directly or indirectly from the Disclosing Party hereunder; provided that: (a) disclosures in written or other tangible form are expressly marked with a confidential or proprietary legend; and (b) oral disclosures and tangible embodiments in a form other than written are identified as confidential or proprietary at the time of disclosure and are thereafter reduced to writing and provided to the Receiving Party within 30 days after the oral disclosure. Notwithstanding the above, Stellartech Technology shall be considered Confidential Information without the necessity of marking. Likewise, notwithstanding the above, all Inventions shall be deemed to be Confidential Information of Company without the necessity of marking or otherwise.

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7.2     The prohibition on disclosure set forth above shall not apply to disclosures by the Receiving Party to its employees, consultants and other similar third parties who need to know the information to perform the activities contemplated under the Agreement, provided such disclosures are reasonably necessary to the Receiving Party's performance hereunder or use of products delivered or rights granted hereunder in accordance with this Agreement, and provided further that the Receiving Party shall take all reasonable steps necessary to insure that such persons or entities to whom disclosure is to be made shall have been advised of the confidential nature thereof and shall be under an express written obligation to maintain such confidentiality and to be bound by terms and conditions of confidentiality at least as restrictive as the obligations of this Section 7.

7.3     This Section 7 shall not apply to information received from the Disclosing Party which the Receiving Party can demonstrate: (a) is or becomes publicly available through no fault of the Receiving Party, (b) is declared not confidential in writing by the Disclosing Party, (c) is lawfully obtained without violation of any confidentiality obligations from third parties, (d) was developed independent of the Confidential Information of the Disclosing Party, as shown by written records prepared contemporaneously with such independent development, or (e) is required by law to be disclosed by Receiving Party; provided in the event the Receiving Party is required by law to disclose Confidential Information of the Disclosing Party, the Receiving Party may disclose such Confidential Information only to the extent necessary to comply therewith and provided further that to the extent possible the Receiving Party shall provide the Disclosing Party with reasonable advance notice thereof to enable the Disclosing Party to seek a protective order to prevent such disclosure.

8.       ACCEPTANCE AND CHANGES.

8.1     Acceptance Process for Deliverables and Services. Deliverables shall be deemed accepted by Company fifteen (15) days after delivery or redelivery by Stellartech (the "Acceptance Period"), unless Company provides Stellartech with a written notice during the Acceptance Period of any material defects in the Services or Deliverables which prevent the Services or Deliverables from substantially conforming to the specifications, if any. Upon receipt of such notice and verification by Stellartech of a substantially nonconforming condition, Stellartech will use commercially reasonable efforts to promptly correct and redeliver such Services and/or Deliverables at the applicable time and materials rates and costs under this Agreement. If after the second redelivery of the same Service or Deliverable, the Service or Deliverable still fails to substantially meet the foregoing requirements, Company's sole and exclusive remedy shall be to elect to either (a) mutually agree to continue the above process, or

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(b) terminate the Agreement. Notwithstanding the above, Company will not be permitted to terminate the Agreement under this Section 8 and Stellartech will not be required to re-perform Services or revise and redeliver Deliverables if the failure of the Services or Deliverables to substantially meet the specifications is the result of (i) modification or repair of the Services or Deliverables by Company or any third party, (ii) problems or errors which are not generated by the Services or Deliverables as delivered by Stellartech to Company, provided that such problems are not caused by the Services or Deliverables, (iii) failure or incompatibility of computer hardware, equipment or software not specified by or supplied by Stellartech, (iv) improper installation or use of the Services or Deliverables, or (v) accident, neglect, failure of electric power, storage or use in improper or adverse environmental conditions, misuse, negligence, or act of God. Without limiting the foregoing, upon request by Company, the parties will enter into a quality agreement on mutually acceptable terms and conditions pursuant to which, among other items: (A) the parties will outline their respective rights and responsibilities with respect to regulatory matters including reporting obligations to regulatory authorities and (B) Stellartech will provide Company access to information and documentation with respect to the Products reasonably necessary for Company to file for and obtain clearances to commercialize the Products.

8.2     Post Development Changes. After the development is completed, Company may request or Stellartech may suggest changes in the design or operation of the Products relating to improvements, or the reliability or serviceability thereof. The parties shall promptly discuss such modifications in good faith, and subject to their mutual agreement, Stellartech shall make any modifications requested or approved by Company; provided Company agrees to pay the reasonable costs of implementing such changes (including possible scrapping or reworking of existing units) which may alter the purchase prices hereunder as agreed by the parties. In the event any changes must be made in a Product to comply with official requirements (including governmental regulations or industry standards), Stellartech shall make any such changes thereto. Any such changes, other than those due to Stellartech's negligence, shall be paid for by Company at Stellartech's rates as set forth in Exhibit B. The parties shall equitably adjust pricing and delivery schedule of any Products that have been ordered but not yet delivered, which are subject to such mandatory changes.

9.        WARRANTY

9.1     Stellartech warrants to Company that: (i) Stellartech shall perform the Services hereunder in a professional and workmanlike manner, commensurate with the standard of performance that it uses for performing similar services for its other customers; and (ii) title to all Products sold and actually paid for hereunder shall pass to Company as provided herein free and clear of any security interest, lien, or other encumbrance.

9.2     Production level Products sold by Stellartech to Company shall be new, and will have a warranty covering defective or workmanship and failure to substantially conform to the production level specification approved by the parties for a period ending on: (i) one year after the date Company or Company's distributors or dealers first ships the Product to a customer, or eighteen months after Stellartech ships the Product to Company, whichever period is less (the "Warranty Period"). Upon notification and receipt of a defective Product during the Warranty Period, Stellartech will repair or replace the defective Product at no cost. For all other repairs, Stellartech will repair or replace defective Products using labor and material rates set forth in Exhibit B within the section, entitled "Manufacturing Formula, Manufacturing Direct Labor Rates," or equivalent. The minimum charge for such repair or replacement shall be $250.00.
 
 

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9.3     Each party represents and wan^-ants to the other that: (i) it has the right to enter into this Agreement, (ii) the execution and delivery by such party of this Agreement and the performance of all obligations of such party hereunder, have been duly authorized by all necessary corporate and shareholder action; (iii) it is registered and in good standing with all applicable governmental agencies, including the FDA (if applicable), regarding the performance of its obligations under this Agreement; and, (iv) any employee, subcontractor, or other personnel of such party, who will perform work related to or in connection with this Agreement, will be bound by appropriate and enforceable agreements to maintain the confidentiality of the other party's Confidential Information, and to assign applicable rights, title, and interest to any Inventions or other Intellectual Property hereunder, to such party in order for such party to assign ownership rights and/or grant licenses as set forth herein.

10.       DISCLAIMERS; LIMITATION OF DAMAGES AND LIABILITY; INDEMNIFICATION

10.1 DISCLAIMER OF WARRANTIES. WITH THE EXCEPTION OF THE EXPRESS WARRANTIES IN SECTION 9 (WARRANTY) ABOVE, NEITHER PARTY MAKES ANY WARRANTIES WITH RESPECT TO THE SERVICES, PRODUCTS OR THE DELIVERABLES, OR OTHERWISE UNDER THIS AGREEMENT, WHETHER EXPRESS, IMPLIED OR STATUTORY, AND EACH PARTY EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF NON-INFRINGEMENT OF THIRD PARTY RIGHTS, MERCHANTABILITY, DESCRIPTION AND FITNESS FOR A PARTICULAR PURPOSE. IN THE CASE OF A BREACH OF WARRANTY BY STELLARTECH, COMPANY'S SOLE AND EXCLUSIVE REMEDY SHALL BE, AT STELLARTECH'S OPTION, TO, AS APPLICABLE: (i) REPAIR OR REPLACE THE NON-CONFORMING PRODUCT WITH A PRODUCT THAT CONFORMS TO THE WARRANTY SET FORTH IN SECTION 9 (WARRANTY), OR (ii) REPERFORM THE DEFECTIVE SERVICES, OR (ii) RECEIVE A PRO RATA REFUND OF A PORTION OF THE FEES RELEVANT TO THE NONCONFORMING SERVICE, PRODUCT OR DELIVERABLE.

10.2 NO CONSEQUENTIAL OR INCIDENTAL DAMAGES. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES ARISING OUT OF, PURSUANT TO OR IN CONNECTION WITH THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFIT OR OTHER MONETARY LOSS, EVEN IF A PARTY IS ADVISED IN WRITING IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES.

10.3 LIMITATION OF LIABILITY. EXCEPT FOR THE COMPANY'S OBLIGATIONS UNDER SECTION 10.4 (INDEMNIFICATION) BELOW, IN NO EVENT WILL EITHER PARTY'S TOTAL, AGGREGATE LIABILITY UNDER THIS AGREEMENT FOR ALL CLAIMS BY THE COMPANY OR ANY THIRD PARTY OF WHATEVER NATURE EXCEED THE LESSER OF THE AMOUNT OF MONIES RECEIVED BY STELLARTECH FROM COMPANY PURSUANT TO THIS AGREEMENT DURING THE PRIOR SIX (6) MONTH PERIOD PRECEDING THE EVENT GIVING RISE TO LIABILITY, MINUS ALL CLAIMS PREVIOUSLY PAID HEREUNDER, DURING THE PRIOR THREE (3) MONTH PERIOD PRECEDING THE EVENT GIVING RISE TO LIABILITY, MINUS ALL CLAIMS PREVIOUSLY PAID HEREUNDER, OR $100,000. NOTWITHSTANDING THE ABOVE, IF STELLARTECH WILLFULLY (I) MATERIALLY BREACHES THE LICENSE RIGHTS IT HAS GRANTED TO COMPANY (INCLUSIVE OF A VIOLATION BY STELLARTECH OF THE EXCLUSIVITY RIGHTS GRANTED TO COMPANY), OR (H) MATERIALLY BREACHES THE CONFIDENTIALITY REQUIREMENTS HEREIN, THEN S 1ELLARTECH'S LIABILITY LIMITATION SHALL BE EQUAL TO THE REVENUES RECEIVED BY STELLARTECH DURING THE PRIOR TWELVE (12) MONTH PERIOD PRECEDING THE EVENT GIVING RISE TO LIABILITY MINUS ALL CLAIMS PREVIOUSLY PAID HEREUNDER. THESE LIMITATIONS ARE CUMULATIVE FOR ALL CLAIMS HOWSOEVER ARISING UNDER ALL AGREEMENTS, AND THESE LIMITATIONS SHALL APPLY EVEN IF THE REMEDIES PROVIDED IN THIS AGREEMENT SHALL FAIL OF THEIR ESSENTIAL PURPOSE.

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10.4 Indemnification.

(a)   For all Products, Deliverables and Services delivered hereunder (and if Company develops a product, process or service based in whole or part on a Product or Deliverable), Company assumes full responsibility for final review, testing and approval. Company also assumes all responsibility for any information and/or specifications it provides to Stellartech regarding the Services, Products or Deliverables and agrees that Stellartech may rely on such information and/or specifications without independent verification.

(b)   Company Indemnity. Company will indemnify, defend and hold Stellartech, and its officers, directors, employees, and agents (each, a "Stellartech Indemnitee") harmless from any and all claims, damages, liabilities, costs, and expenses (including, but not limited to, reasonable attorneys' fees) incurred by a Stellartech Indemnitee as a result of any claim, action, suit, or proceeding by a third party arising out of or resulting from or otherwise related to the performance of Services or the provision of Deliverables or the Products to be provided by Stellartech hereunder, or based on any breach or alleged breach of any of Company's representations and warranties provided in this Agreement, including, without limitation, (i) claims related to patent or other intellectual property infringement (including any infringement claims by Thermage), product liability, fraud or breach of warranty by Company and (ii) from any liabilities in connection with its or a third party's use of the Services, Products or Deliverables, including but not limited to circumstances where a third party alleges that it has been damaged by a defect in a Product or Deliverable; provided, however, that Company shall have no obligation to indemnify any Stellartech Indemnitee for any damage, liability, cost or expense to the extent caused by any negligent or willful act or omission by or on behalf of Stellartech. Stellartech may participate in any such defense or settlement with counsel of its own choosing at Stellartech's expense.

(c)   Stellartech Indemnity. Stellartech will indemnify, defend and hold Company, and its officers, directors, employees, and agents (each, a "Company Indemnitee") harmless from any and all damages, liabilities, costs, and expenses (including, but not limited to, reasonable attorneys' fees) incurred by a Company Indemnitee as a result of any claim, action, suit, or proceeding by a third party based on the willful misconduct of Stellartech hereunder, provided, however, that Stellartech shall have no obligation to indemnify any Company Indemnitee for any damage, liability, cost or expense to the extent caused by any negligent or willful act or omission by or on behalf of Company. Stellartech may participate in any such defense or settlement with counsel of its own choosing at Stellartech's expense.

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(d)   Procedure. Any person or entity claiming indemnification under this Section 10.5 (the "Indemnified Party") shall notify the other party (the "Indemnifying Party") of any applicable claim, action, suit or proceeding, (each a "Claim") reasonably promptly after the Indemnified Party is aware thereof, and the Indemnifying Party shall assume the defense of any related claim and the Indemnified Party hereby consents to the Indemnifying Party assuming such defense; provided, however, that an Indemnified Party shall have the right to retain its own counsel at its own expense. The indemnity agreement in this Section 10.5 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the consent of the Indemnifying Party, unless such consent shall have been unreasonably withheld or delayed. The failure of an Indemnified Party to deliver notice to the Indemnifying Party within a reasonable time after becoming aware of any such matter, if prejudicial to the Indemnifying Party's ability to defend such action, shall relieve the Indemnifying Party of any liability to the Indemnified Party that would have been mitigated but for such delay. The Indemnified Party under this Section 10.4 and its employees and agents shall cooperate fully with the Indemnifying Party and its legal representatives in the investigation of any matter covered by this indemnification.

(d) Applicability of Remedy. Each party's indemnification obligation as set forth in this Section 10.5 shall apply notwithstanding any limitation of remedy language set forth in other provisions of this Agreement.

11.       GENERAL PROVISIONS.

11.1 Independent Contractor Status. The parties agree that the relationship between Stellartech and Company is that of independent contractors. No employment, joint venture, partnership, franchise or similar relationship is formed by this Agreement, and neither party shall have any authority to act for or bind the other.

11.2 Taxes. The fees set forth herein do not include any sales or use taxes now or hereafter enacted, or without limitation any federal, local or other governmental taxes which would normally be the responsibility of Company, including duties, licenses, fees, excises or tariffs, that are applicable to the Services ("Taxes"). Company agrees to pay and indemnify Stellartech from and against all Taxes, and any interest and penalties associated therewith, whether levied or invoiced at or after the time of Stellartech's performance.

11.3 Notices. All notices required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated: (i) by personal delivery when delivered personally; (ii) by overnight courier upon receipt of written verification of receipt; (iii) by facsimile transmission upon receipt when confirmed by telecopier or facsimile transmission; (iv) by certified or registered mail, return receipt requested, upon verification of receipt, or five (5) days after deposit in the mail. The mailing address and fax number for notice to each party is set forth below. Either party may change its mailing address and fax number by notice as provided by this Section.

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Notices to Stellartech:	Notices to Company:
Stellartech Research Corporation	TiVaMed, Inc.
1346 Bordeaux Drive	900 Welch Road
Sunnyvale, CA 94089	Palo Alto, CA 94304
Attn: President	Attn: Jonathan Partner
Fax: 408-331-3101	Fax: 650-326-0114

11.4 Governing Law; Dispute Resolution

This Agreement shall be governed by and interpreted in accordance with the laws of the State of California, excluding its conflicts of law principles. Except for actions seeking injunctive relief, disputes involving nonpayment, or suit to compel compliance with this dispute resolution process, the parties agree to use the dispute resolution procedures set forth in this Section with respect to any controversy or claim arising out of or relating to this Agreement or its breach. The parties will endeavor to settle amicably by mutual discussions any disputes, differences, or claims related to this Agreement. In the event of a qualifying dispute between the parties under this Agreement, the parties agree to promptly meet and confer with the goal of settling such dispute. If the parties are unable to reach a prompt, amicable agreement concerning such dispute, the parties agree to submit the matter to non-binding mediation under the auspices of and according to the rules of the Judicial Arbitration and Mediation Service, Inc., through its San Jose, California office ("J.A.M.S."), by a mediator selected by the parties with expertise in technology and consulting agreements. If the parties cannot agree upon a mediator one will be selected according to J.A.M.S. rules. The mediation fee, if any, shall be divided equally between the parties. Failing the resolution of their dispute by mediation, each party may pursue all options available at law or equity, and the parties hereby submit to the jurisdiction of any state or federal court located in Santa Clara County, California. If any action at law or equity is brought by either party in connection with this Agreement, the prevailing party shall be entitled to receive its costs, expert witness fees and reasonable attorneys' fees, including necessary disbursements and costs and fees on appeal, in addition to any other relief to which such party may be entitled.

11.5 Publicity. Except as otherwise required by applicable law, any proposed advertising, press releases or other publicity which discusses the Agreement, a project under this Agreement, or Stellartech's role in the development of Products or Deliverables hereunder shall require the prior written consent of both parties.

11.6 Force Majeure. Neither party shall be liable hereunder by reason of failure or delay in the performance of its obligations hereunder (except for the payment of money) on account of strikes, shortages, riots, insurrection, war, acts of terrorism, fires, flood, storm, explosions, earthquakes, acts of God, governmental action, labor conditions, or any other cause which is beyond the reasonable control of the party.

11.7 Waiver. No term or provision hereof will be considered waived by either party, and no breach excused by either party, unless such waiver or consent is in writing signed on behalf of the party against whom the waiver is asserted. No consent by either party to, or waiver of, a breach by either party, whether express or implied, will constitute consent to, waiver of, or excuse of any other, different, or subsequent breach by either party.

11.8 Assignment, Successors and Assigns. Neither party may assign its rights or obligations arising under this Agreement without the other party's prior written consent, such consent not to be unreasonably withheld or delayed; provided, however, that either party may assign this Agreement without such consent to an entity that acquires a majority of its equity or all or substantially all assets of the assigning party to which this Agreement relates, so long as such assignee agrees in writing to be bound by the terms of this Agreement. Any attempted assignment in violation of the foregoing shall be void. This Agreement will be for the benefit of the permitted successors and assigns, and will be binding on heirs, legal and permitted assignees.

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11.9 Severability; Headings and Counterparts. If a court of competent jurisdiction finds any provision of this Agreement invalid or unenforceable, that provision will either be amended to achieve as nearly as possible the intent of the parties, or if amendment is not possible the offending provision shall be deemed struck, and the remainder of this Agreement will remain in full force and effect. The captions and other headings in this Agreement are for convenience only and not be considered a part of or effect the construction and interpretation of any provision of this Agreement. The Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

11.10 Survival. In addition to the provisions that survive pursuant to Section 5.3, the provisions in Sections 6.1 (Rights in Deliverables), 6.2 (Patent and Copyright Registration), (7 (Confidential Information), 9 (Warranty) to the extent the Warranty Period may extend beyond the date of expiration or termination of this Agreement, (10 (Disclaimers; Limitation of Damages and Liability; Indemnification) 11 (General Provisions), and Exhibits A, B, C and D (to the extent provided therein or necessary to affect the purpose of the provisions therein) shall survive the expiration or termination of this Agreement.

11.11 Entire Agreement. This Agreement and all Exhibits and Attachments thereto constitutes the entire agreement between the parties with regard to its subject matter, supersedes all prior or contemporaneous agreements, commitments, representations, writings, and discussions between the parties, whether oral or written, and there are no other agreements, representations, warranties, or commitments which may be relied upon by either party. The parties expressly acknowledge that they are represented by legal counsel and that they have read and understand the terms of this Agreement. This Agreement may be amended only by an instrument in writing executed by the parties.

WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the first date written above.

COMPANY		Stellartech Research Corporation
By:	/s/ Jonathan Parmer	By:	/s/ Roger A. Stern
Name:	Jonathan Parmer	Name:	Roger A. Stern
Title:	President & CEO	Title:	President

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Exhibit A

A.       Development Services

Stage 1: Specification and Prototype Development Stage

Research, engineering, design, and specification and prototype development of RF Generators, hand pieces, and treatments tips (the "Product"). Charges will be billed on a time and materials basis using rates in Exhibit B, Section A, "Engineering, Design, and Prototyping Rates".

Stage 2: Clinical Development Stage

Engineering and production of Product, suitable for testing in humans and to include documentation and controls suitable for obtaining Investigational Device Exemption approval, Food and Drug Administration approval to market and "CE mark approval, as mutually agreed upon. Charges will be billed on a time and materials basis using rates in Exhibit B, Section A, (Engineering, Design, and Prototyping Rates).

B.        Manufacturing Services

1.     Minimum Commitment. Stellartech and Company agree that Stellartech will manufacture at least the first 300 units of the Product for Company (i.e., 300 units of the RF generator component, and all associated hand pieces and treatment tips to be used with the RF generator component until such time as all 300 units of the RF generator component have been purchased from Stellartech). Additionally, for a period of time up to and including thirty-six (36) months following Company's receipt of written notice of regulatory clearance to market the Product in the United States (the "Exclusivity Period"), Stellartech will be the exclusive supplier of Product to Company.

2.     Transfer Price. Stellartech agrees to sell Product to the Company at a per-unit Transfer Price using the formula in Exhibit B, Section B, (Manufacturing Formula, Manufacturing Direct Labor Rates).

3.     Forecasts. To facilitate Stellartech's production scheduling, Company shall provide Stellartech with a quarterly rolling forecast of Company's anticipated quarterly requirements of Products for the following 12 month period commencing on the date of such forecast. This forecast shall be for Stellartech's planning purposes only and non-binding on either party. It is understood that Company shall use reasonable efforts to make each forecast as accurate as possible.

4.     Ordering Process. Company will submit written purchase orders for Products or spare parts to Stellartech with a lead time of at least 90 days prior to the requested delivery date with respect to products or spare parts ordered therein, and Stellartech shall use commercially reasonable best efforts to deliver any such Products or spare parts in accordance with the terms of corresponding accepted purchase orders.

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5.     Quality Assurance. Stellartech agrees to utilize its quality assurance program in performance hereof. Such program shall require Stellartech to prepare and maintain written records sufficient to enable Company to trace the history of each Product.

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Exhibit B

A.  Engineering, Design, and Prototyping Rates.  Stellartech will bill for design and development services at the following rates.

Administrative Services	$35.00/hr
Assembly	$45.00/hr	Documentation/Drafting	$65.00/hr
Technician	$75.00/hr	Industrial/Graphic Design	$95.00/hr
Engineer	$115.00/hr	Senior Engineer	$135.00/hr
Senior Project Manager	$160.00/hr	Senior Executive Manager	$185.00/hr

Stellartech agrees to hold these prices constant through June 30, 2008. Rate increases may not exceed ten percent (10%) in any given twelve (12) month period without prior written consent of Company. Materials, expenses, and outside services are billed at cost plus twenty percent (20%). Out-of-town trips are charged at ten (10) hours per day.

B.  Manufacturing Formula, Manufacturing Direct Labor Rates.  Stellartech agrees to compute a Transfer Price according to the formula:

Transfer Price = [(Direct Labor Costs x 3.0) + (Material Costs x 1.2)1 * 1.538

Direct labor rates for manufacturing in effect through December 31, 2007 are:

Assembler	$17.50/hr	Technician	$27.00/hr
Engineer	$35.00/hr

Stellartech agrees to hold these prices constant through June 30, 2008. Rate increases may not exceed ten percent (10%) in any given twelve (12) month period without prior written consent of Company.

C.   Invoicing; Payments; Late Fees. Stellartech shall render invoices for the fees and costs herein monthly, semi-monthly or on such other longer basis as it deems appropriate. All undisputed payments shall be due within thirty (30) days of invoicing and shall be deemed in default if not received within fifteen (15) days of the due date. Accounts in default are subject to a service charge on the balance of the lesser of 1% per month or the maximum amount permitted by law. Stellartech may suspend or cease performance and seek all remedies available for accounts in default and Company agrees to reimburse Stellartech its reasonable expenses, including attorneys' and other fees incurred in collecting amounts due, and payments received after default shall be applied against interest, expenses, and principal as Stellartech determines in its sole discretion.

D.   Equity. Company and Stellartech have in parallel with the execution of this Agreement entered into the Stock Purchase Agreement pursuant to which Stellartech shall purchase 300,000 shares in the Common Stock of the Company representing 7.5% of the fully diluted outstanding capital stock of the Company as of the Effective Date under the terms and conditions of the Stock Purchase Agreement, attached hereto and incorporated herein as Exhibit D.

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Exhibit C

Definitions

1.0      Definitions. The capitalized terms in this Agreement which are not otherwise defined in the body of the Agreement shall have the meanings ascribed below.

1.1     "Company Field" means Transmucosal rejuvenation, reconstruction or other treatment of the vagina or vulva, where "Transmucosal" means through a mucosal surface; provided however, the Company Field shall exclude treatment for cosmetic aesthetic surgery and collagen contraction of skin.

1.2     "Deliverable" means a specific, unique deliverable or Product developed and/or manufactured and sold by Stellartech to Company pursuant to the Agreement.

1.3     "Derivative Work" means any modification or extension of any current invention, process, algorithm, software program, trade secret, work of authorship or other Intellectual Property right.

1.4     "Development Services" means the services as described in the corresponding section of Exhibit A to the Agreement.

1.5     "Intellectual Property" means copyright rights in any and all copyrightable works (including, without limitation, rights in written work, designs, software, moral rights, authors rights, and the exclusive, world-wide right to use, reproduce, modify, distribute, publicly display and publicly perform the copyrighted work), trademark rights (including, without limitation, trade names, trademarks, service marks, trade dress and look and feel), patent rights (including, without limitation, the exclusive right to make, have made, use and sell), trade secret rights (including, without limitation, formulae, designs, processes, techniques, ideas, artwork, algorithms, rights to technical developments, designs, business methods, business processes and inventions whether or not patentable), right of publicity, contract and licensing rights, goodwill, know-how, any invention or other new or useful art, discovery or improvement, and all other intellectual property and intangible rights as may exist now and/or hereafter come into existence and all renewals and extensions thereof, regardless of whether such rights arise under the law of the United States or any other state, country or jurisdiction.

1.6     "Manufacturing Services" means the services described in the corresponding section of Exhibit A to the Agreement.

1.7     "Products" means products designed, manufactured and/or sold to Company by or for Stellartech.

1.8     "Stellartech Technology" means any trade secret, process, algorithm, invention, original works of authorship, development, design, improvement, patent, copyright or other Intellectual Property of Stellartech which Stellartech (a) developed or acquired prior to the commencement of this Agreement, (b) acquired after the commencement hereof independent of this Agreement, or (c) developed either alone or in collaboration with others, separate and apart from this Agreement, and all Derivative Works based thereon.

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1.9     "Other Technology" means those Intellectual Property license rights granted to Stellartech pursuant to that certain "Development and Supply Agreement" between Stellartech and Thermage dated as of October 1, 1997 (the "Thermage Agreement"), a true and accurate copy of which agreement has been provided to Company.

1.10   "Services" means the Manufacturing Services and/or the Development Services.

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EX-10

Exhibit 10.29

RIGHT TO SHARES LETTER AGREEMENT

This Right to Shares Letter Agreement, dated as of September 23, 2014 (this “Agreement”) constitutes an agreement between Viveve Medical, Inc. (formerly PLC Systems Inc.) (the “Company”) and GCP IV LLC (the “Purchaser”).

WHEREAS, the Company, the Purchaser and other investors entered into that certain Securities Purchase Agreement, dated as of May 9, 2014, as amended on September 22, 2014 (the “Purchase Agreement”), pursuant to which the Purchaser subscribed for 943,397 shares of the Company’s common stock, no par value (the “Common Stock”), plus shares of Common Stock issuable upon the conversion of accrued but unpaid interest of certain convertible notes (the “Shares”), equal to a subscription amount of $500,000 plus the accrued but unpaid interest, as applicable (the “Subscription Amount”).

WHEREAS, in accordance with Section 5.7 of the Purchase Agreement, the Purchaser transferred a portion of the Shares and Subscription Amount, which decreased the Purchaser’s subscription at Closing (as defined in the Purchase Agreement) to 390,316 shares.

WHEREAS, in lieu of issuing 390,316 shares of Common Stock purchased by the Purchaser at the Closing, the Company and the Purchaser have agreed to enter into this Agreement whereby, subject to the terms and conditions set forth herein, from time to time, the Company shall be obligated to issue and the Purchaser shall have the right to the issuance of up to 390,316 Shares, subject to adjustment hereunder (the “Reserved Shares” and such right of the Purchaser, the “Right”).

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and intending to be legally bound, the parties hereto agree as follows:

Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Purchase Agreement, as amended, modified or supplemented from time to time in accordance with its terms.

Section 2.     Issuance of Reserved Shares.

Section 2.1     Issuance of Right in Lieu of Share Issuance. In lieu of issuing 390,316 shares to the Purchaser at the Closing, the Company hereby grants the Right to the Purchaser. The Company and the Purchaser hereby agree that no additional consideration is payable in connection with the issuance of the Reserved Shares. The Purchaser acknowledges and agrees that the Company has no obligation to repay the Subscription Amount to the Purchaser, or any assignee or successor to the Purchaser.

Section 2.2     Right of Issuance of Shares. Subject to the terms hereof, the exercise of the Right may be made, in whole or in part, at any time or times on or after the date hereof by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Purchaser at the address of the Purchaser appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Issuance Form annexed hereto requesting the issuance of Reserved Shares. Partial exercises of the Right resulting in issuances of a portion of the total number of Reserved Shares available hereunder shall have the effect of lowering the outstanding number of Reserved Shares purchasable hereunder in an amount equal to the applicable number of Reserved Shares issued. The Purchaser and the Company shall maintain records showing the number of Reserved Shares issued and the date of such issuances. The Company shall deliver any objection to any Notice of Issuance Form within two (2) Business Days of receipt of such notice. The Purchaser and any assignee, by assignment of this Agreement, acknowledge and agree that, by reason of the provisions of this paragraph, following the issuance of a portion of the Reserved Shares hereunder, the number of Reserved Shares available for issuance hereunder at any given time may be less than the amount stated in Section 2 hereof.

Section 2.3     Delivery of Certificates. Certificates for the Reserved Shares issued hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Reserved Shares to or resale of the Reserved Shares by the Purchaser or (B) the Reserved Shares are eligible for resale by the Purchaser without volume or manner-of-sale limitations pursuant to Rule 144, and otherwise by physical delivery to the address specified by the Purchaser in the Notice of Issuance by the date that is three (3) Trading Days after the delivery to the Company of the Notice of Issuance (such date, the “Share Delivery Date”). The Reserved Shares shall be deemed to have been issued, and Purchaser or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Right has been exercised.

Section 2.4     Compensation for Buy-In on Failure to Timely Deliver Certificates. In addition to any other rights available to the Purchaser, if the Company fails to cause the Transfer Agent to transmit to the Purchaser a certificate or the certificates representing the Reserved Shares pursuant to an exercise on or before the Share Delivery Date, and if after such date and prior to the delivery of such certificate or certificates the Purchaser is required by its broker to purchase (in an open market transaction or otherwise) or the Purchaser’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Purchaser of the Reserved Shares which the Purchaser anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Purchaser the amount, if any, by which (x) the Purchaser’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Reserved Shares that the Company was required to deliver to the Purchaser in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Purchaser, either reinstate the portion of the Right and equivalent number of Reserved Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded, and the Purchaser shall promptly return to the Company the certificates issued to such Purchaser pursuant to the rescinded Notice of Issuance) or deliver to the Purchaser the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Purchaser purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Purchaser $1,000. The Purchaser shall provide the Company written notice indicating the amounts payable to the Purchaser in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Purchaser’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Right as required pursuant to the terms hereof.

Section 2.5     Charges, Taxes and Expenses. Issuance of certificates for Reserved Shares shall be made without charge to the Purchaser for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Purchaser or in such name or names as may be directed by the Purchaser; provided, however, that in the event certificates for Reserved Shares are to be issued in a name other than the name of the Purchaser, subject to the terms of Section 4.1(a) of the Purchase Agreement, the Purchaser shall deliver the Assignment Form attached hereto duly executed by the Purchaser and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Issuance.

Section 2.6     Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of the Right, pursuant to the terms hereof.

Section 2.7     Purchaser’s Limitations. The Purchaser shall not have the right to exercise any portion of the Right, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Issuance, the Purchaser (together with the Purchaser’s Affiliates, and any other Persons acting as a group together with the Purchaser or any of the Purchaser’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Purchaser and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of the Right with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of the Right beneficially owned by the Purchaser or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Purchaser or any of its Affiliates.  The Company shall not be liable for any instruction received by the Purchaser. Except as set forth in the preceding sentence, for purposes of this Section 2.7, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Purchaser that the Company is not representing to the Purchaser that such calculation is in compliance with Section 13(d) of the Exchange Act and the Purchaser is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2.7 applies, the determination of whether the Right is exercisable (in relation to other securities owned by the Purchaser together with any Affiliates) and of which portion of the Right is exercisable shall be in the sole discretion of the Purchaser, and the submission of a Notice of Issuance shall be deemed to be the Purchaser’s determination of whether the Right is exercisable (in relation to other securities owned by the Purchaser together with any Affiliates) and of which portion of the Right is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2.7, in determining the number of outstanding shares of Common Stock, the Purchaser may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of the Purchaser, the Company shall within two Trading Days confirm orally and in writing to the Purchaser the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including the Right, by the Purchaser or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of the Right. The Purchaser, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2.7. Any such increase or decrease will not be effective until the 61^st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2.7 to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor assignee of this Agreement.

Section 3.     Certain Adjustments.

Section 3.1.     Stock Dividends and Splits. If the Company, at any time while the Right exists: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the number of Reserved Shares issuable upon exercise of the Right shall be proportionately adjusted. Any adjustment made pursuant to this Section 3.1 shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution (provided that if the declaration of such dividend or distribution is rescinded or otherwise cancelled, then such adjustment shall be reversed upon notice to the Purchaser of the termination of such proposed declaration or distribution as to any unexercised portion of the Right at the time of such rescission or cancellation) and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

Section 3.2     Benefit of Contractual Rights.  All contractual rights granted to the investors under the Purchase Agreement are hereby granted to the Purchaser with respect to the Reserved Shares, including, without limitation, Section 4.15 of the Purchase Agreement.  If requested by the Purchaser, at the time of any Dilutive Issuance, the Company and Purchaser shall enter into an agreement similar this Agreement with respect to any shares that would have otherwise been issuable to the Purchaser under Sections 4.15 of the Purchase Agreement had the Purchaser been issued Shares at Closing instead of entering into this Agreement with respect to the Reserved Shares.

Section 3.3     Subsequent Rights Offerings. If Section 3.1 above does not apply, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Purchaser will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Purchaser could have acquired if the Purchaser had held the number of shares of Common Stock acquirable upon complete exercise of the Right (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Purchaser’s right to participate in any such Purchase Right would result in the Purchaser exceeding the Beneficial Ownership Limitation, then the Purchaser shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Purchaser until such time, if ever, as its right thereto would not result in the Purchaser exceeding the Beneficial Ownership Limitation).

Section 3.4     Fundamental Transaction. If, at any time while the Right remains outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of the Right, the Purchaser shall have the right to receive, for each Reserved Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Purchaser (without regard to any limitation in Section 2.7 on the exercise of the Right), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of one share of Common Stock. Upon the occurrence of any such Fundamental Transaction, the any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”)shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Agreement and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Agreement and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

Section 3.5     Notice to Allow Exercise of Right. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Purchaser at its address on the signature page to the Purchase Agreement, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Purchaser shall remain entitled to exercise the Right during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

Section 4.     Transfer of Right.

Section 4.1     Transferability. Subject to compliance with any applicable securities laws of the United States or any state thereof and to the provisions of Section 4.1 of the Purchase Agreement, the Right and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon written assignment substantially in the form attached hereto duly executed by the Purchaser or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer of this Agreement delivered to the principal office of the Company or its designated agent. Upon such assignment and, if required, such payment, the Company shall enter into a new agreement with the assignee or assignees, as applicable, and this Agreement shall promptly be cancelled. The Right, if properly assigned in accordance herewith, may be exercised by a new holder for the issue of Reserved Shares without having a new agreement executed.

Section 4.2     Division of Rights. The Right may be divided or combined with other rights upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which such Rights are to be granted, signed by the Purchaser or its agent or attorney.

Section 5.     Reserved.

Section 6.     Effect on Transaction Documents. This Agreement shall be deemed for all purposes as a Transaction Document (as defined in the Purchase Agreement) and all representations and warranties made by the Company and the Purchaser shall apply with respect to this Agreement.

Section 7.     Miscellaneous.

Section 7.1     No Rights as Stockholder Until Exercise. This Agreement does not entitle the Purchaser to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2.

Section 7.2     Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

Section 7.3     Authorized Shares.

The Company covenants that, during the period the Right is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Reserved Shares upon the exercise of the Right. The Company further covenants that its issuance of the Right shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Reserved Shares upon the due exercise of the Right. The Company will take all such reasonable action as may be necessary to assure that such Reserved Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Reserved Shares which may be issued upon the exercise of the Right represented by this Agreement will, upon exercise of the Right, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

Except and to the extent as waived or consented to by the Purchaser, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Agreement, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Purchaser as set forth in this Agreement against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Reserved Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Reserved Shares upon the exercise of the Right and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Agreement.

Before taking any action which would result in an adjustment in the number of Reserved Shares for which the Right provides for, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

Section 7.4     Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined in accordance with the provisions of the Purchase Agreement.

Section 7.5     Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Purchaser shall operate as a waiver of such right or otherwise prejudice the Purchaser’s rights, powers or remedies. Without limiting any other provision of this Agreement or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Agreement, which results in any material damages to the Purchaser, the Company shall pay to the Purchaser such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Purchaser in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

Section 7.6     Notices. Any notice, request or other document required or permitted to be given or delivered to the Purchaser by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

Section 7.7     Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have caused this Right to Shares Letter Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

VIVEVE MEDICAL, INC. (formerly PLC Systems Inc.)		Address for Notice:
		150 Commercial Street Sunnyvale, California 94086
By:	/s/ Scott Durbin	Fax: (408) 530-1919
Name:	Scott Durbin
Title:	Chief Financial Officer
With a copy to (which shall not constitute notice):
Richardson & Patel, LLP 1100 Glendon Avenue Suite 850 Los Angeles, CA 90024 Attn: Kevin Friedmann, Esq. FAX: (310) 208-1154

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

[PURCHASER SIGNATURE PAGES TO VIVEVE MEDICAL, INC.

RIGHT TO SHARES LETTER AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Right to Shares Letter Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Purchaser: ________________________________________________________________

Signature of Authorized Signatory of Purchaser: __________________________________________

Name of Authorized Signatory: _______________________________________________________

Title of Authorized Signatory: ________________________________________________________

NOTICE OF ISSUANCE

To:     VIVEVE MEDICAL, INC.

(1)     The undersigned hereby elects in accordance with the terms and conditions of the Right to Shares Letter Agreement, dated as of September 23, 2014 (the “Letter Agreement”), to exercise its Right to the issuance of ________ Reserved Shares of the Viveve Medical, Inc., a Yukon Territory corporation (the “Company”) pursuant to the terms of the Letter Agreement, and tenders all applicable transfer taxes, if any.

(2)     Please issue a certificate or certificates representing ___________ of the Shares, comprising said Reserved Shares in the name of the undersigned registered holder or in such other name as is specified below:

_______________________________

The Reserved Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

_______________________________

_______________________________

_______________________________

(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]

Name of Registered Holder: __________________________________________________________

Signature of Authorized Signatory of Registered Holder: ___________________________________

Name of Authorized Signatory: _______________________________________________________

Title of Authorized Signatory: ________________________________________________________

Date: __________________________________________________________________________

ASSIGNMENT FORM

(To assign the foregoing Right, execute
this form and supply required information.
Do not use this form to exercise the Right.)

VIVEVE MEDICAL, INC.

FOR VALUE RECEIVED, the undersigned, hereby assigns in accordance with the terms and conditions of the Right to Shares Letter Agreement, dated as of September 23, 2014 (the “Letter Agreement”) [____] all of or [_______] shares of the Right (as defined in the Letter Agreement) and all rights evidenced thereby to

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

Dated: ______________, _______

Purchaser’s Signature:     _____________________________

Purchaser’s Address:       _____________________________

 _____________________________

Signature Guaranteed: ___________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it appears on purchaser signature page the Letter Agreement, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Right.

EX-10

Exhibit 10.30

RIGHT TO SHARES LETTER AGREEMENT

This Right to Shares Letter Agreement, dated as of September 23, 2014 (this “Agreement”) constitutes an agreement between Viveve Medical, Inc. (formerly PLC Systems Inc.) (the “Company”) and G-Ten Partners LLC (the “Purchaser”).

WHEREAS, pursuant to that certain Subscription Assignment and Joinder Agreement, dated September 22, 2014 (the “Joinder Agreement”), in accordance with Section 5.7 of that certain Securities Purchase Agreement, dated as of May 9, 2014, as amended on September 22, 2014 (the “Purchase Agreement”), the Purchaser was transferred and assigned a subscription for 566,038 shares (the “Shares”) of the Company’s common stock, no par value per share (the “Common Stock”), equal to a subscription amount of $300,000 (the “Subscription Amount”).

WHEREAS, in lieu of issuing the Shares purchased by Purchaser at the Closing (as defined in the Purchase Agreement), the Company and the Purchaser have agreed to enter into this Agreement whereby, subject to the terms and conditions set forth herein, from time to time, the Company shall be obligated to issue and the Purchaser shall have the right to the issuance of up to 566,038 Shares, subject to adjustment hereunder (the “Reserved Shares” and such right of the Purchaser, the “Right”).

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and intending to be legally bound, the parties hereto agree as follows:

Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Purchase Agreement, as amended, modified or supplemented from time to time in accordance with its terms.

Section 2.     Issuance of Reserved Shares.

Section 2.1     Issuance of Right in Lieu of Share Issuance. In lieu of issuing 566,038 Shares to the Purchaser at the Closing, the Company hereby grants the Right to the Purchaser. The Company and the Purchaser hereby agree that no additional consideration is payable in connection with the issuance of the Reserved Shares. The Purchaser acknowledges and agrees that the Company has no obligation to repay the Subscription Amount to the Purchaser, or any assignee or successor to the Purchaser.

Section 2.2     Right of Issuance of Shares. Subject to the terms hereof, the exercise of the Right may be made, in whole or in part, at any time or times on or after the date hereof by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Purchaser at the address of the Purchaser appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Issuance Form annexed hereto requesting the issuance of Reserved Shares. Partial exercises of the Right resulting in issuances of a portion of the total number of Reserved Shares available hereunder shall have the effect of lowering the outstanding number of Reserved Shares purchasable hereunder in an amount equal to the applicable number of Reserved Shares issued. The Purchaser and the Company shall maintain records showing the number of Reserved Shares issued and the date of such issuances. The Company shall deliver any objection to any Notice of Issuance Form within two (2) Business Days of receipt of such notice. The Purchaser and any assignee, by assignment of this Agreement, acknowledge and agree that, by reason of the provisions of this paragraph, following the issuance of a portion of the Reserved Shares hereunder, the number of Reserved Shares available for issuance hereunder at any given time may be less than the amount stated in Section 2 hereof.

Section 2.3     Delivery of Certificates. Certificates for the Reserved Shares issued hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Reserved Shares to or resale of the Reserved Shares by the Purchaser or (B) the Reserved Shares are eligible for resale by the Purchaser without volume or manner-of-sale limitations pursuant to Rule 144, and otherwise by physical delivery to the address specified by the Purchaser in the Notice of Issuance by the date that is three (3) Trading Days after the delivery to the Company of the Notice of Issuance (such date, the “Share Delivery Date”). The Reserved Shares shall be deemed to have been issued, and Purchaser or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Right has been exercised.

Section 2.4     Compensation for Buy-In on Failure to Timely Deliver Certificates. In addition to any other rights available to the Purchaser, if the Company fails to cause the Transfer Agent to transmit to the Purchaser a certificate or the certificates representing the Reserved Shares pursuant to an exercise on or before the Share Delivery Date, and if after such date and prior to the delivery of such certificate or certificates the Purchaser is required by its broker to purchase (in an open market transaction or otherwise) or the Purchaser’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Purchaser of the Reserved Shares which the Purchaser anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Purchaser the amount, if any, by which (x) the Purchaser’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Reserved Shares that the Company was required to deliver to the Purchaser in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Purchaser, either reinstate the portion of the Right and equivalent number of Reserved Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded, and the Purchaser shall promptly return to the Company the certificates issued to such Purchaser pursuant to the rescinded Notice of Issuance) or deliver to the Purchaser the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Purchaser purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Purchaser $1,000. The Purchaser shall provide the Company written notice indicating the amounts payable to the Purchaser in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Purchaser’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Right as required pursuant to the terms hereof.

Section 2.5     Charges, Taxes and Expenses. Issuance of certificates for Reserved Shares shall be made without charge to the Purchaser for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Purchaser or in such name or names as may be directed by the Purchaser; provided, however, that in the event certificates for Reserved Shares are to be issued in a name other than the name of the Purchaser, subject to the terms of Section 4.1(a) of the Purchase Agreement, the Purchaser shall deliver the Assignment Form attached hereto duly executed by the Purchaser and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Issuance.

Section 2.6     Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of the Right, pursuant to the terms hereof.

Section 2.7     Purchaser’s Limitations. The Purchaser shall not have the right to exercise any portion of the Right, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Issuance, the Purchaser (together with the Purchaser’s Affiliates, and any other Persons acting as a group together with the Purchaser or any of the Purchaser’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Purchaser and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of the Right with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of the Right beneficially owned by the Purchaser or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Purchaser or any of its Affiliates.  The Company shall not be liable for any instruction received by the Purchaser. Except as set forth in the preceding sentence, for purposes of this Section 2.7, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Purchaser that the Company is not representing to the Purchaser that such calculation is in compliance with Section 13(d) of the Exchange Act and the Purchaser is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2.7 applies, the determination of whether the Right is exercisable (in relation to other securities owned by the Purchaser together with any Affiliates) and of which portion of the Right is exercisable shall be in the sole discretion of the Purchaser, and the submission of a Notice of Issuance shall be deemed to be the Purchaser’s determination of whether the Right is exercisable (in relation to other securities owned by the Purchaser together with any Affiliates) and of which portion of the Right is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2.7, in determining the number of outstanding shares of Common Stock, the Purchaser may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of the Purchaser, the Company shall within two Trading Days confirm orally and in writing to the Purchaser the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including the Right, by the Purchaser or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of the Right. The Purchaser, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2.7. Any such increase or decrease will not be effective until the 61^st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2.7 to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor assignee of this Agreement.

Section 3.     Certain Adjustments.

Section 3.1.     Stock Dividends and Splits. If the Company, at any time while the Right exists: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the number of Reserved Shares issuable upon exercise of the Right shall be proportionately adjusted. Any adjustment made pursuant to this Section 3.1 shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution (provided that if the declaration of such dividend or distribution is rescinded or otherwise cancelled, then such adjustment shall be reversed upon notice to the Purchaser of the termination of such proposed declaration or distribution as to any unexercised portion of the Right at the time of such rescission or cancellation) and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

Section 3.2     Benefit of Contractual Rights.  All contractual rights granted to the investors under the Purchase Agreement are hereby granted to the Purchaser with respect to the Reserved Shares, including, without limitation, Section 4.15 of the Purchase Agreement.  If requested by the Purchaser, at the time of any Dilutive Issuance, the Company and Purchaser shall enter into an agreement similar this Agreement with respect to any shares that would have otherwise been issuable to the Purchaser under Sections 4.15 of the Purchase Agreement had the Purchaser been issued Shares at Closing instead of entering into this Agreement with respect to the Reserved Shares.

Section 3.3     Subsequent Rights Offerings. If Section 3.1 above does not apply, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Purchaser will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Purchaser could have acquired if the Purchaser had held the number of shares of Common Stock acquirable upon complete exercise of the Right (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Purchaser’s right to participate in any such Purchase Right would result in the Purchaser exceeding the Beneficial Ownership Limitation, then the Purchaser shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Purchaser until such time, if ever, as its right thereto would not result in the Purchaser exceeding the Beneficial Ownership Limitation).

Section 3.4     Fundamental Transaction. If, at any time while the Right remains outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of the Right, the Purchaser shall have the right to receive, for each Reserved Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Purchaser (without regard to any limitation in Section 2.7 on the exercise of the Right), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of one share of Common Stock. Upon the occurrence of any such Fundamental Transaction, the any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”)shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Agreement and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Agreement and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

Section 3.5     Notice to Allow Exercise of Right. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Purchaser at its address on the signature page to the Purchase Agreement, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Purchaser shall remain entitled to exercise the Right during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

Section 4.     Transfer of Right.

Section 4.1     Transferability. Subject to compliance with any applicable securities laws of the United States or any state thereof and to the provisions of Section 4.1 of the Purchase Agreement, the Right and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon written assignment substantially in the form attached hereto duly executed by the Purchaser or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer of this Agreement delivered to the principal office of the Company or its designated agent. Upon such assignment and, if required, such payment, the Company shall enter into a new agreement with the assignee or assignees, as applicable, and this Agreement shall promptly be cancelled. The Right, if properly assigned in accordance herewith, may be exercised by a new holder for the issue of Reserved Shares without having a new agreement executed.

Section 4.2     Division of Rights. The Right may be divided or combined with other rights upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which such Rights are to be granted, signed by the Purchaser or its agent or attorney.

Section 5.     Reserved.

Section 6.     Effect on Transaction Documents. This Agreement shall be deemed for all purposes as a Transaction Document (as defined in the Purchase Agreement) and all representations and warranties made by the Company and the Purchaser shall apply with respect to this Agreement.

Section 7.     Miscellaneous.

Section 7.1     No Rights as Stockholder Until Exercise. This Agreement does not entitle the Purchaser to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2.

Section 7.2     Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

Section 7.3     Authorized Shares.

The Company covenants that, during the period the Right is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Reserved Shares upon the exercise of the Right. The Company further covenants that its issuance of the Right shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Reserved Shares upon the due exercise of the Right. The Company will take all such reasonable action as may be necessary to assure that such Reserved Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Reserved Shares which may be issued upon the exercise of the Right represented by this Agreement will, upon exercise of the Right, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

Except and to the extent as waived or consented to by the Purchaser, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Agreement, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Purchaser as set forth in this Agreement against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Reserved Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Reserved Shares upon the exercise of the Right and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Agreement.

Before taking any action which would result in an adjustment in the number of Reserved Shares for which the Right provides for, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

Section 7.4     Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined in accordance with the provisions of the Purchase Agreement.

Section 7.5     Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Purchaser shall operate as a waiver of such right or otherwise prejudice the Purchaser’s rights, powers or remedies. Without limiting any other provision of this Agreement or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Agreement, which results in any material damages to the Purchaser, the Company shall pay to the Purchaser such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Purchaser in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

Section 7.6     Notices. Any notice, request or other document required or permitted to be given or delivered to the Purchaser by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

Section 7.7     Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have caused this Right to Shares Letter Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

VIVEVE MEDICAL, INC. (formerly PLC Systems Inc.)		Address for Notice:
		150 Commercial Street Sunnyvale, California 94086
By:	/s/ Scott Durbin	Fax: (408) 530-1919
Name:	Scott Durbin
Title:	Chief Financial Officer
With a copy to (which shall not constitute notice):
Richardson & Patel, LLP 1100 Glendon Avenue Suite 850 Los Angeles, CA 90024 Attn: Kevin Friedmann, Esq. FAX: (310) 208-1154

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

[PURCHASER SIGNATURE PAGES TO VIVEVE MEDICAL, INC.

RIGHT TO SHARES LETTER AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Right to Shares Letter Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Purchaser: ________________________________________________________________

Signature of Authorized Signatory of Purchaser: __________________________________________

Name of Authorized Signatory: _______________________________________________________

Title of Authorized Signatory: ________________________________________________________

NOTICE OF ISSUANCE

To:     VIVEVE MEDICAL, INC.

(1)     The undersigned hereby elects in accordance with the terms and conditions of the Right to Shares Letter Agreement, dated as of September 23, 2014 (the “Letter Agreement”), to exercise its Right to the issuance of ________ Reserved Shares of the Viveve Medical, Inc., a Yukon Territory corporation (the “Company”) pursuant to the terms of the Letter Agreement, and tenders all applicable transfer taxes, if any.

(2)     Please issue a certificate or certificates representing ___________ of the Shares, comprising said Reserved Shares in the name of the undersigned registered holder or in such other name as is specified below:

_______________________________

The Reserved Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

_______________________________

_______________________________

_______________________________

(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]

Name of Registered Holder: __________________________________________________________

Signature of Authorized Signatory of Registered Holder: ___________________________________

Name of Authorized Signatory: _______________________________________________________

Title of Authorized Signatory: ________________________________________________________

Date: ___________________________________________________________________________

ASSIGNMENT FORM

(To assign the foregoing Right, execute
this form and supply required information.
Do not use this form to exercise the Right.)

VIVEVE MEDICAL, INC.

FOR VALUE RECEIVED, the undersigned, hereby assigns in accordance with the terms and conditions of the Right to Shares Letter Agreement, dated as of September 23, 2014 (the “Letter Agreement”) [____] all of or [_______] shares of the Right (as defined in the Letter Agreement) and all rights evidenced thereby to

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

Dated: ______________, _______

Purchaser’s Signature:     _____________________________

Purchaser’s Address:       _____________________________

                                                                                             _____________________________

NOTE: The signature to this Assignment Form must correspond with the name as it appears on purchaser signature page the Letter Agreement, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Right.

EX-21

EXHIBIT 21

SUBSIDIARIES

NAME	JURISDICTION OF INCORPORATION	PERCENTAGE OWNERSHIP
Viveve, Inc.	Delaware	100%

EX-23

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Registration Statement on Form S-1 of our report (which contains an explanatory paragraph relating to the Company’s ability to continue as a going concern as described in Note 1 to the financial statements) dated March 18, 2014, relating to the financial statements of Viveve, Inc., which appears in such Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/ Burr Pilger Mayer, Inc.

San Jose, California

November 21, 2014

EX-24

Exhibit 24.1

THE VIVEVE MEDICAL, INC.

REGISTRATION STATEMENT ON FORM S-1

POWER OF ATTORNEY

Each undersigned officer and/or director of Viveve Medical, Inc., a Yukon Territory corporation (the "Registrant"), does hereby make, constitute and appoint Patricia Scheller, Chief Executive Officer of the Registrant, and Scott Durbin, Chief Financial Officer of the Registrant, and any other person holding the position of Chief Executive Officer or Chief Financial Officer of the Registrant from time to time, and each of them, as attorney-in-fact and agents of the undersigned, each with full power of substitution and resubstitution, with the full power to execute and file:

(i) the Registration Statement on Form S-1 (the "Form S-1 Registration Statement") with respect to the registration under the Securities Act of 1933, as amended, of common stock, no par value, of the Registrant for resale in connection with that certain Registration Rights Agreement, dated May 9, 2014 as may be revised in accordance with the Company resolution entitled "Authorize Filing of Resale S-1 Registration Statement " along with an indeterminate amount of interests to be offered or sold pursuant to the Plan;

(ii) any and all amendments, including post-effective amendments, and exhibits to the Form S-1 Registration Statement; and

(iii) any and all applications or other documents to be filed with the Securities and Exchange Commission or any state securities commission or other regulatory authority with respect to the securities covered by the Form S-1 Registration Statement, with full power and authority to do and perform any and all acts and things whatsoever necessary, appropriate or desirable to be done in the premises, or in the name, place and stead of the said director and/or officer, hereby ratifying and approving the acts of said attorney.

[Signature page follows]

IN WITNESS WHEREOF, the undersigned have subscribed to the above as of November 21, 2014.

Signature	Title
/s/ Patricia Scheller	Chief Executive Officer (Principal Executive Officer) and Director
Patricia Scheller
/s/ Scott Durbin	Chief Financial Officer (Principal Financial Officer)
Scott Durbin
/s/ Brigitte Smith	Chairman of the Board
Brigitte Smith
/s/ Mark Colella	Director
Mark Colella
/s/ Carl Simpson	Director
Carl Simpson
/s/ Daniel Janney	Director
Daniel Janney

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Note 5 - Note Payable (Details) - Summary of Note Payble (USD $)	Sep. 30, 2014	Dec. 31, 2013	Dec. 30, 2013	Dec. 31, 2012
Summary of Note Payble [Abstract]
	$ 1,618,091
Less: Amount representing interest	(146,292)	(125,398)
Present value of obligations	1,471,799	1,471,798
	1,471,799	1,463,244
Less: Notes payable, current portion	1,471,799	1,463,244	1,462,244	1,581,390
Notes payable, noncurrent portion	$ 0

XML

Note 3 - Fair Value Measurements (Details) - Assets and Liabilities Measured at Fair Value (USD $)	Sep. 30, 2014	Dec. 31, 2013	Dec. 31, 2012
Note 3 - Fair Value Measurements (Details) - Assets and Liabilities Measured at Fair Value [Line Items]
Total assets	$ 190	$ 324	$ 503
Preferred stock warrant liabilities		623,672	685,213
Total liabilities		623,672	685,213
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member]
Note 3 - Fair Value Measurements (Details) - Assets and Liabilities Measured at Fair Value [Line Items]
Money market fund	190	324	503
Fair Value, Inputs, Level 1 [Member]
Note 3 - Fair Value Measurements (Details) - Assets and Liabilities Measured at Fair Value [Line Items]
Total assets	190	324	503
Fair Value, Inputs, Level 3 [Member]
Note 3 - Fair Value Measurements (Details) - Assets and Liabilities Measured at Fair Value [Line Items]
Preferred stock warrant liabilities		623,672	685,213
Total liabilities		623,672	685,213
Money Market Funds [Member]
Note 3 - Fair Value Measurements (Details) - Assets and Liabilities Measured at Fair Value [Line Items]
Money market fund	$ 190	$ 324	$ 503

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Note 10 - Summary of Stock Options (Details) - Summary of Options Outstanding and Exercisable (USD $)	9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Number (in Shares)	2,294,535	45,146,118
Options Outstanding, Weighted-Average Exercise Price	$ 1.02
Options Outstanding, Weighted Average Contractual Life (Years)	9 years 244 days
Options Exercisable, Number (in Shares)	413,059	15,025,985
Options Exercisable, Weighted-Average Exercise Price	$ 2.94	$ 0.02
Range One [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Price	$ 0.12
Range of Exercise Price, Upper	$ 0.12
Options Outstanding, Number (in Shares)	320	40,000
Options Outstanding, Weighted-Average Exercise Price	$ 0.12	$ 0.001
Options Outstanding, Weighted Average Contractual Life (Years)	2 years 76 days
Options Exercisable, Number (in Shares)	320	40,000
Options Exercisable, Weighted-Average Exercise Price	$ 0.12	$ 0.001
Range Two [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Price	$ 0.60
Range of Exercise Price, Upper	$ 0.60
Options Outstanding, Number (in Shares)	1,901,476	980,250
Options Outstanding, Weighted-Average Exercise Price	$ 0.60	$ 0.06
Options Outstanding, Weighted Average Contractual Life (Years)	10 years
Options Exercisable, Number (in Shares)	20,000	921,104
Options Exercisable, Weighted-Average Exercise Price	$ 0.60	$ 0.06
Range Three [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Price	$ 1.24
Range of Exercise Price, Upper	$ 1.24
Options Outstanding, Number (in Shares)	314,036	514,833
Options Outstanding, Weighted-Average Exercise Price	$ 1.24	$ 0.15
Options Outstanding, Weighted Average Contractual Life (Years)	8 years 54 days
Options Exercisable, Number (in Shares)	314,036	447,055
Options Exercisable, Weighted-Average Exercise Price	$ 1.24	$ 0.15
Range Four [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Price, Lower	$ 7.00
Range of Exercise Price	$ 9.00
Range of Exercise Price, Upper	$ 9.00
Options Outstanding, Number (in Shares)	59,372	43,611,035
Options Outstanding, Weighted-Average Exercise Price	$ 8.63	$ 0.01
Options Outstanding, Weighted Average Contractual Life (Years)	8 years 102 days
Options Exercisable, Number (in Shares)	59,372	13,617,826
Options Exercisable, Weighted-Average Exercise Price	$ 8.63	$ 0.01
Range Five [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Price, Lower	$ 12.00
Range of Exercise Price	$ 18.63
Range of Exercise Price, Upper	$ 18.63
Options Outstanding, Number (in Shares)	19,081
Options Outstanding, Weighted-Average Exercise Price	$ 15.29
Options Outstanding, Weighted Average Contractual Life (Years)	6 years 288 days
Options Exercisable, Number (in Shares)	19,081
Options Exercisable, Weighted-Average Exercise Price	$ 15.29
Range Six [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Price	$ 37.00
Range of Exercise Price, Upper	$ 37.00
Options Outstanding, Number (in Shares)	250
Options Outstanding, Weighted-Average Exercise Price	$ 37.00
Options Outstanding, Weighted Average Contractual Life (Years)	3 years 262 days
Options Exercisable, Number (in Shares)	250
Options Exercisable, Weighted-Average Exercise Price	$ 37.00

XML

Note 3 - Fair Value Measurements (Details) - Summary of Changes in Fair Value of Preferred Stock Warrant Liabilities (USD $)	3 Months Ended			9 Months Ended		12 Months Ended		99 Months Ended
	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 30, 2013	Dec. 31, 2011
Summary of Changes in Fair Value of Preferred Stock Warrant Liabilities [Abstract]
Fair value		$ 580,187	$ 602,188			$ 623,672	$ 685,213	$ 623,672	$ 623,672	$ 646,844
Fair value of warrants issued							194,532
Change in fair value recorded in other income (expense), net	$ 7,277	$ 22,001	$ 21,484	$ (50,762)	$ (11,230)	$ (61,541)	$ (156,163)	$ (622,824)

XML

Note 10 - Summary of Stock Options (Details) (USD $)	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended		99 Months Ended	1 Months Ended			9 Months Ended	3 Months Ended	9 Months Ended	12 Months Ended			99 Months Ended	12 Months Ended		99 Months Ended	9 Months Ended	1 Months Ended	9 Months Ended	12 Months Ended							15 Months Ended		9 Months Ended
	Sep. 23, 2014	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 30, 2013	Dec. 31, 2013	Sep. 30, 2014 Employee Stock Option [Member]	Sep. 30, 2013 Employee Stock Option [Member]	Sep. 30, 2014 Employee Stock Option [Member]	Sep. 30, 2013 Employee Stock Option [Member]	Dec. 31, 2013 Employee Stock Option [Member]	Dec. 31, 2012 Employee Stock Option [Member]	Dec. 31, 2013 Employee Stock Option [Member]	Feb. 28, 2006 Incentive Stock Options [Member] Minimum [Member] The 2006 Stock Option Plan [Member]	Feb. 28, 2006 Non Qualified Stock Options [Member] Minimum [Member] The 2006 Stock Option Plan [Member]	Feb. 28, 2006 Holdings Greater than 10% of Shares Outstanding [Member] The 2006 Stock Option Plan [Member]	Sep. 30, 2014 Holdings Greater than 10% of Shares Outstanding [Member] The 2013 Plan [Member]	Sep. 30, 2014 Employees [Member]	Sep. 30, 2014 Employees [Member]	Dec. 30, 2013 Employees [Member]	Dec. 30, 2012 Employees [Member]	Dec. 31, 2012 Employees [Member]	Dec. 30, 2013 Employees [Member]	Dec. 30, 2013 Nonemployees [Member]	Dec. 30, 2012 Nonemployees [Member]	Dec. 30, 2013 Nonemployees [Member]	Sep. 30, 2014 2005 Plan [Member]	Feb. 28, 2006 The 2006 Stock Option Plan [Member]	Sep. 30, 2014 The 2006 Stock Option Plan [Member]	Dec. 31, 2013 The 2006 Stock Option Plan [Member]	Dec. 31, 2012 The 2006 Stock Option Plan [Member]	Dec. 31, 2011 The 2006 Stock Option Plan [Member]	Dec. 31, 2010 The 2006 Stock Option Plan [Member]	Dec. 31, 2009 The 2006 Stock Option Plan [Member]	Dec. 31, 2008 The 2006 Stock Option Plan [Member]	Dec. 31, 2007 The 2006 Stock Option Plan [Member]	Dec. 31, 2006 The 2006 Stock Option Plan [Member]	Sep. 21, 2005 The 2006 Stock Option Plan [Member]	Sep. 30, 2014 The 2013 Plan [Member]	Jun. 30, 2014 The 2013 Plan [Member]
Note 10 - Summary of Stock Options (Details) [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance (in Shares)							568,227,020																					22,095												839,148
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number (in Shares)																												22,095		324,820	45,146,118	44,788,104	2,960,486	2,763,486	2,178,029	986,000	913,500	51,500		1,947,619
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price (in Dollars per share)		$ 1.02		$ 1.02			$ 2.94																					$ 12.83		$ 1.55	$ 0.01	$ 0.01	$ 0.07	$ 0.06	$ 0.06	$ 0.06	$ 0.06	$ 0.001		$ 0.80
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term				9 years 244 days			8 years 292 days																					8 years 292 days		8 years 21 days	8 years 292 days	9 years 270 days	7 years 255 days	8 years 146 days	9 years	8 years 317 days	9 years 299 days	9 years 350 days
Conversion of Stock, Exchange Ratio	0.0080497																													0.0080497
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period																	5 years	5 years											10 years											10 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period																													4 years											4 years
Share-based Compensation Arrangement by Share-based Payment Award, Percentage of Outstanding Stock Maximum																													10.00%											10.00%
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent															100.00%	85.00%													110.00%											110.00%
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares)																																							1,000,000	3,111,587	113,826
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)				1,901,476															1,901,476	1,901,476	11,788,890		38,996,262		85,000	4,698,259					11,873,890	43,694,521	345,000	771,412	1,892,029	72,500	867,000	51,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share)																			$ 0.32	$ 0.32	$ 0.00559	$ 0.03262
Allocated Share-based Compensation Expense		$ 113,346	$ 16,284	$ 143,643	$ 66,001			$ 113,345	$ 16,284	$ 143,643	$ 66,001										$ 94,021	$ 102,511		$ 282,032	$ (6,593)	$ 6,686	$ 9,183
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options		567,000		567,000																	129,937			129,937
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition										3 years 94 days											1 year 270 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value		1,700,000		1,700,000																	322	2,322		322
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in Shares)				0	0																											1,866,903	9,000	173,455	322,395
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate				0.00%		0.00%				0.00%	0.00%	0.00%	0.00%	0.00%
Dividends				0		0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value																					139,914	54,199
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value																					$ 0	$ 0

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Note 2 - Summary of Significant Accounting Policies (Details) - Antidilutive Securities	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	548,993	409,488	469,911	491,609
Equity Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	476,671	409,488	445,804	491,609
Common Stock Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	72,322		24,107

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Note 4 - Balance Sheet Components (Details) (USD $)	12 Months Ended		99 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013
Disclosure Text Block Supplement [Abstract]
Depreciation, Depletion and Amortization, Nonproduction	$ 66,120	$ 57,173	$ 239,475

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Note 7 - Commitments and Contingencies (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Year Ending December 31,
2014	$	46,428
2015		30,952
Total minimum lease payments	$	77,380

Year Ending December 31,
2014	$	184,002
2015		30,952
	$	214,954

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Note 10 - Summary of Stock Options (Details) - Stock-based Compensation Expense Included in the Statement of Income (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Allocated share based compensation expense	$ 113,346	$ 16,284	$ 143,643	$ 66,001
Research and Development Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Allocated share based compensation expense	101	976	667	(7,016)
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Allocated share based compensation expense	$ 113,245	$ 15,308	$ 142,976	$ 73,017

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Note 7 - Commitments and Contingencies (Details) - Future Minimum Lease Payments (USD $)	Sep. 30, 2014	Dec. 31, 2013
Future Minimum Lease Payments [Abstract]
2014	$ 46,428	$ 184,002
2015	30,952	30,952
Total minimum lease payments	$ 77,380	$ 214,954

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Note 4 - Accrued Liabilities (Details) - Accrued Liabilities (USD $)	Sep. 30, 2014	Dec. 31, 2013	Dec. 31, 2012
Accrued Liabilities [Abstract]
Accrued interest	$ 13,792	$ 235,603	$ 8,987
Accrued professional fees	125,671	15,000
Accrued loan balloon payment	85,000	76,472
Accrued vacation	73,809	81,499	54,153
Accrued loan restructuring fees	47,500	27,288
Accrued severence pay		58,846
Other accruals	41,766	21,444	910
Total accrued liabilities	$ 387,538	$ 516,152	$ 345,644

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Note 12 - Related Party Transactions (Details) (USD $)	1 Months Ended	9 Months Ended		12 Months Ended	15 Months Ended	99 Months Ended	1 Months Ended	0 Months Ended	9 Months Ended		12 Months Ended		24 Months Ended	99 Months Ended	0 Months Ended	12 Months Ended	39 Months Ended		1 Months Ended
	Sep. 23, 2014	Sep. 30, 2014	Sep. 30, 2013	Dec. 30, 2013	Sep. 30, 2012	Dec. 30, 2013	Jul. 31, 2012 Series B Preferred Stock [Member] Donna Bella International, Limited [Member]	Oct. 04, 2007 Stellartech Research Corporation [Member]	Sep. 30, 2014 Stellartech Research Corporation [Member]	Sep. 30, 2013 Stellartech Research Corporation [Member]	Dec. 31, 2013 Stellartech Research Corporation [Member]	Dec. 31, 2012 Stellartech Research Corporation [Member]	Oct. 04, 2007 Stellartech Research Corporation [Member]	Dec. 31, 2013 Stellartech Research Corporation [Member]	Mar. 14, 2013 Chief Executive Officer [Member]	Dec. 31, 2008 Chief Executive Officer [Member]	Dec. 31, 2008 Chief Executive Officer [Member]	Mar. 14, 2013 Chief Executive Officer [Member]	Apr. 30, 2012 Dr. Palmer [Member]
Note 12 - Related Party Transactions (Details) [Line Items]
Stock Issued During Period, Shares, New Issues (in Shares)	11,305,567							300,000					300,000
Related Party Transaction, Amounts of Transaction									$ 345,472	$ 33,000	$ 33,000	$ 325,936		$ 6,920,619
Operating Leases, Rent Expense		128,359	128,359	173,896	166,398	744,602										12,000	72,391
Payments for Legal Settlements																			1,000,000
Notes Payable, Related Parties																			150,000
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in Shares)																			754,635
Maximum Value of Shares to be Issued if Closing of Equity Financing																			150,000
Stock Issued During Period, Value, New Issues							1,000,000
Employee-related Liabilities, Current																		271,346
Monthly Severance Payment															25,000
Final Severance Payment															$ 21,346
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares (in Shares)															5,278,330
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)		1,901,476													11,015,646

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Note 10 - Stock Option Plan (Details) - Valuation Assumptions for Nonemployee Stock Options	9 Months Ended	12 Months Ended			99 Months Ended	12 Months Ended		99 Months Ended	12 Months Ended		99 Months Ended
	Sep. 30, 2014	Dec. 30, 2013	Dec. 31, 2013 Nonemployee Stock Option [Member] Minimum [Member]	Dec. 31, 2012 Nonemployee Stock Option [Member] Minimum [Member]	Dec. 31, 2013 Nonemployee Stock Option [Member] Minimum [Member]	Dec. 31, 2013 Nonemployee Stock Option [Member] Maximum [Member]	Dec. 31, 2012 Nonemployee Stock Option [Member] Maximum [Member]	Dec. 31, 2013 Nonemployee Stock Option [Member] Maximum [Member]	Dec. 31, 2013 Nonemployee Stock Option [Member]	Dec. 31, 2012 Nonemployee Stock Option [Member]	Dec. 31, 2013 Nonemployee Stock Option [Member]
Note 10 - Stock Option Plan (Details) - Valuation Assumptions for Nonemployee Stock Options [Line Items]
Contractual term (in years)			3 years	4 years	3 years	10 years	10 years	10 years
Expected volatility					60.00%			79.00%	67.00%	68.00%
Risk-free interest rate			0.78%	0.72%	0.56%	3.04%	1.78%	4.70%
Dividend yield	0.00%	0.00%							0.00%	0.00%	0.00%

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Note 7 - Commitments and Contingencies (Details) - Future Minimum Lease Payments (USD $)	Sep. 30, 2014	Dec. 31, 2013
Future Minimum Lease Payments [Abstract]
2014	$ 46,428	$ 184,002
2015	30,952	30,952
	$ 77,380	$ 214,954

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Note 10 - Summary of Stock Options (Details) - Summary of Option Activity Under All Plans (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Summary of Option Activity Under All Plans [Abstract]
Shares available for grant	2,294,534	363,413
Number of shares	$ 1.02	$ 2.94
Weighted average exercise price	9 years 244 days	8 years 292 days
Options granted	1,901,476
Options granted	$ 0.60
Options assumed from PLC	68,238
Options assumed from PLC	$ 10.24
Options canceled	(38,593)
Options canceled	$ 1.75

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Note 4 - Accrued Liabilities

9 Months Ended

Sep. 30, 2014

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

4. Accrued Liabilities

Accrued liabilities consisted of the following as of September 30, 2014 and December 31, 2013:

	September 30,		December 31,
	2014		2013
Accrued interest	$	13,792	$	235,603
Accrued professional fees		125,671		15,000
Accrued loan balloon payment		85,000		76,472
Accrued vacation		73,809		81,499
Accrued loan restructuring fees		47,500		27,288
Accrued severence pay		-		58,846
Other accruals		41,766		21,444
Total accrued liabilities	$	387,538	$	516,152

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Note 8 - Common Stock (Details) - Summary of Reserved Common Stock	Dec. 31, 2013
Note 8 - Common Stock (Details) - Summary of Reserved Common Stock [Line Items]
Reserved common stock	568,227,020
Conversion of Series A Convertible Preferred Stock [Member]
Note 8 - Common Stock (Details) - Summary of Reserved Common Stock [Line Items]
Reserved common stock	291,132,255
Conversion of Series B Convertible Preferred Stock [Member]
Note 8 - Common Stock (Details) - Summary of Reserved Common Stock [Line Items]
Reserved common stock	171,199,348
Exercise of Options Under Stock Plan [Member]
Note 8 - Common Stock (Details) - Summary of Reserved Common Stock [Line Items]
Reserved common stock	45,146,118
Issuance of Options Under Stock Plan [Member]
Note 8 - Common Stock (Details) - Summary of Reserved Common Stock [Line Items]
Reserved common stock	36,449,336
Exercise and Conversion of Convertible Preferred Stock Warrants [Member]
Note 8 - Common Stock (Details) - Summary of Reserved Common Stock [Line Items]
Reserved common stock	24,299,963

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Note 8 - Common Stock (Details) (USD $)	1 Months Ended		9 Months Ended	12 Months Ended				0 Months Ended	1 Months Ended	9 Months Ended	0 Months Ended
	Sep. 23, 2014	Jun. 30, 2009	Sep. 30, 2014	Dec. 30, 2013	Dec. 31, 2013	Dec. 31, 2012	Apr. 30, 2012	May 09, 2014 Accrued Interest [Member] GBS [Member]	Sep. 30, 2014 September 2014 Term Loan [Member]	Sep. 30, 2014 September 2014 Term Loan [Member]	May 09, 2014 GBS [Member]
Note 8 - Common Stock (Details) [Line Items]
Conversion of Stock, Shares Issued	3,743,282
Conversion of Stock, Exchange Ratio	0.0080497
Class of Warrant or Right, Number of Securities Called by Warrants as Percentage of Outstanding Shares of Common Stock											5.00%
Debt Conversion, Original Debt, Amount (in Dollars)	$ 1,545,678		$ 1,545,678					$ 211,000			$ 1,750,000
Stock Issued During Period, Shares, Other											943,596
Stock Issued During Period, Shares, New Issues	11,305,567
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	940,189			16,680,324	16,680,324	16,680,324			471,698	471,698
Proceeds from Issuance of Private Placement (in Dollars)	6,000,000		4,204,220
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)	$ 0.53				$ 0.06				$ 0.53	$ 0.53
Warrant Term	5 years								10 years	10 years
Warrants and Rights Outstanding (in Dollars)									622,170	622,170
Fair Value Assumptions, Expected Dividend Rate									0.00%
Fair Value Assumptions, Expected Volatility Rate									77.00%
Fair Value Assumptions, Risk Free Interest Rate									2.50%
Common Stock, Shares Authorized					612,000,000	612,000,000	612,000,000
Dividends (in Dollars)			$ 0	$ 0
Shares Subject to Repurchase, Lapse Period				4 years
Treasury Stock, Shares, Acquired		565,833
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased				666		194,441

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Note 8 - Common Stock (Tables)

12 Months Ended

Dec. 31, 2013

Stockholders' Equity Note [Abstract]

Schedule of Common Stock Reserved for Future Issuance [Table Text Block]

Conversion of Series A convertible preferred stock	291,132,255
Conversion of Series B convertible preferred stock	171,199,348
Exercise of options under stock plan	45,146,118
Issuance of options under stock plan	36,449,336
Exercise and conversion of convertible preferred stock warrants	24,299,963
	568,227,020

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Note 4 - Balance Sheet Components (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Disclosure Text Block Supplement [Abstract]

Property, Plant and Equipment [Table Text Block]

	2012			2013
Medical equipment	$	215,639		$	276,443
Computer equipment		30,871			32,143
Furniture and fixtures		13,293			13,293
		259,803			321,879
Less: Accumulated depreciation and amortization		(131,176	)		(194,355	)
Net property and equipment	$	128,627		$	127,524

Schedule of Accrued Liabilities [Table Text Block]

	September 30,		December 31,
	2014		2013
Accrued interest	$	13,792	$	235,603
Accrued professional fees		125,671		15,000
Accrued loan balloon payment		85,000		76,472
Accrued vacation		73,809		81,499
Accrued loan restructuring fees		47,500		27,288
Accrued severence pay		-		58,846
Other accruals		41,766		21,444
Total accrued liabilities	$	387,538	$	516,152

	2012		2013
Accrued settlement related costs	$	263,560	$	-
Accrued interest		8,987		312,075
Accrued severence pay		-		58,846
Accrued vacation		54,153		81,499
Accrued loan restructuring fees		-		27,288
Deferred rent		18,034		15,284
Other accruals		910		21,160
Total accrued liabilities	$	345,644	$	516,152

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Note 3 - Fair Value Measurements (Details) - Summary of the Valuation Techniques for Fair Value of Preferred Stock Warrant Liabilities (USD $)	12 Months Ended							12 Months Ended
	Dec. 31, 2013	Sep. 23, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 30, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013 Preferred Stock Warrant Liabilities [Member] Minimum [Member]	Dec. 31, 2012 Preferred Stock Warrant Liabilities [Member] Minimum [Member]	Dec. 31, 2013 Preferred Stock Warrant Liabilities [Member] Maximum [Member]	Dec. 31, 2012 Preferred Stock Warrant Liabilities [Member] Maximum [Member]	Dec. 31, 2013 Preferred Stock Warrant Liabilities [Member]	Dec. 31, 2012 Preferred Stock Warrant Liabilities [Member]	Dec. 31, 2013 Minimum [Member]	Dec. 31, 2013 Maximum [Member]
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Preferred stock warrant liabilities	$ 623,672		$ 580,187	$ 602,188	$ 623,672	$ 685,213	$ 646,844					$ 623,672	$ 685,213
	$ 0.06	$ 0.53						$ 0.04	$ 0.04	$ 0.44	$ 0.44	$ 0.06	$ 0.06	$ 0.04	$ 0.44
	76.00%							70.60%	74.20%	84.20%	91.60%	76.00%	83.00%	70.62%	84.23%

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Note 9 - Convertible Preferred Stock (Details) (USD $)	1 Months Ended	3 Months Ended			9 Months Ended		12 Months Ended		99 Months Ended			9 Months Ended	12 Months Ended			99 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended				1 Months Ended	9 Months Ended	12 Months Ended		99 Months Ended	1 Months Ended	9 Months Ended		12 Months Ended	1 Months Ended	9 Months Ended	12 Months Ended		99 Months Ended	1 Months Ended	9 Months Ended	12 Months Ended		99 Months Ended	1 Months Ended	9 Months Ended	12 Months Ended		99 Months Ended	1 Months Ended	9 Months Ended	12 Months Ended		99 Months Ended	1 Months Ended	9 Months Ended	12 Months Ended		99 Months Ended	1 Months Ended				1 Months Ended	12 Months Ended		99 Months Ended		1 Months Ended	12 Months Ended		13 Months Ended	99 Months Ended		1 Months Ended	12 Months Ended		99 Months Ended		1 Months Ended	9 Months Ended	12 Months Ended			1 Months Ended				1 Months Ended	12 Months Ended		99 Months Ended		1 Months Ended	12 Months Ended		99 Months Ended		1 Months Ended				1 Months Ended				1 Months Ended				1 Months Ended				1 Months Ended					9 Months Ended	12 Months Ended
	Sep. 23, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 30, 2013	Dec. 31, 2011	Sep. 30, 2014 Other Nonoperating Income (Expense) [Member] Series A Preferred Stock [Member] December 2008 Warrants [Member]	Dec. 30, 2013 Other Nonoperating Income (Expense) [Member] Series A Preferred Stock [Member] December 2008 Warrants [Member]	Dec. 31, 2013 Other Nonoperating Income (Expense) [Member] Series A Preferred Stock [Member] December 2008 Warrants [Member]	Dec. 31, 2012 Other Nonoperating Income (Expense) [Member] Series A Preferred Stock [Member] December 2008 Warrants [Member]	Dec. 31, 2013 Other Nonoperating Income (Expense) [Member] Series A Preferred Stock [Member] December 2008 Warrants [Member]	Sep. 30, 2014 Other Nonoperating Income (Expense) [Member] Series A Preferred Stock [Member] April 2009 Warrants [Member]	Dec. 30, 2013 Other Nonoperating Income (Expense) [Member] Series A Preferred Stock [Member] April 2009 Warrants [Member]	Sep. 30, 2014 Other Nonoperating Income (Expense) [Member] Series A Preferred Stock [Member] November 2010 Warrants [Member]	Dec. 30, 2013 Other Nonoperating Income (Expense) [Member] Series A Preferred Stock [Member] November 2010 Warrants [Member]	Sep. 30, 2014 Other Nonoperating Income (Expense) [Member] Series A Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 30, 2013 Other Nonoperating Income (Expense) [Member] Series A Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 31, 2009 Other Nonoperating Income (Expense) [Member] Series A Preferred Stock [Member] August 2007 Warrants [Member]	Dec. 31, 2008 Other Nonoperating Income (Expense) [Member] Series A Preferred Stock [Member] August 2007 Warrants [Member]	Dec. 31, 2007 Other Nonoperating Income (Expense) [Member] Series A Preferred Stock [Member] August 2007 Warrants [Member]	Sep. 23, 2014 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] April 2012 Warrants [Member]	Sep. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 30, 2012 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] April 2012 Warrants [Member]	Sep. 23, 2014 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] May 2011 Warrants [Member]	Sep. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] May 2011 Warrants [Member]	Sep. 30, 2014 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] June 2011 Warrants [Member]	Dec. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] June 2011 Warrants [Member]	Sep. 23, 2014 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] September 2011 Warrants [Member]	Sep. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] September 2011 Warrants [Member]	Dec. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] September 2011 Warrants [Member]	Dec. 30, 2012 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] September 2011 Warrants [Member]	Dec. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] September 2011 Warrants [Member]	Sep. 23, 2014 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] November 2011 Warrants [Member]	Sep. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] November 2011 Warrants [Member]	Dec. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] November 2011 Warrants [Member]	Dec. 30, 2012 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] November 2011 Warrants [Member]	Dec. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] November 2011 Warrants [Member]	Sep. 23, 2014 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] December 2011 Warrants [Member]	Sep. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] December 2011 Warrants [Member]	Dec. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] December 2011 Warrants [Member]	Dec. 30, 2012 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] December 2011 Warrants [Member]	Dec. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] December 2011 Warrants [Member]	Sep. 23, 2014 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] January 2012 Warrants [Member]	Sep. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] January 2012 Warrants [Member]	Dec. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] January 2012 Warrants [Member]	Dec. 30, 2012 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] January 2012 Warrants [Member]	Dec. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] January 2012 Warrants [Member]	Sep. 23, 2014 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] February 2012 Warrants [Member]	Sep. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] February 2012 Warrants [Member]	Dec. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] February 2012 Warrants [Member]	Dec. 30, 2012 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] February 2012 Warrants [Member]	Dec. 30, 2013 Other Nonoperating Income (Expense) [Member] Series B Preferred Stock [Member] February 2012 Warrants [Member]	Dec. 31, 2008 Series A Preferred Stock [Member] December 2008 Warrants [Member]	Dec. 31, 2013 Series A Preferred Stock [Member] December 2008 Warrants [Member]	Dec. 30, 2013 Series A Preferred Stock [Member] December 2008 Warrants [Member]	Dec. 31, 2012 Series A Preferred Stock [Member] December 2008 Warrants [Member]	Apr. 30, 2009 Series A Preferred Stock [Member] April 2009 Warrants [Member]	Dec. 31, 2013 Series A Preferred Stock [Member] April 2009 Warrants [Member]	Dec. 31, 2012 Series A Preferred Stock [Member] April 2009 Warrants [Member]	Dec. 31, 2013 Series A Preferred Stock [Member] April 2009 Warrants [Member]	Dec. 30, 2013 Series A Preferred Stock [Member] April 2009 Warrants [Member]	Nov. 30, 2010 Series A Preferred Stock [Member] November 2010 Warrants [Member]	Dec. 31, 2013 Series A Preferred Stock [Member] November 2010 Warrants [Member]	Dec. 31, 2012 Series A Preferred Stock [Member] November 2010 Warrants [Member]	Nov. 30, 2011 Series A Preferred Stock [Member] November 2010 Warrants [Member]	Dec. 31, 2013 Series A Preferred Stock [Member] November 2010 Warrants [Member]	Dec. 30, 2013 Series A Preferred Stock [Member] November 2010 Warrants [Member]	Apr. 30, 2012 Series A Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 31, 2013 Series A Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 31, 2012 Series A Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 31, 2013 Series A Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 30, 2013 Series A Preferred Stock [Member] April 2012 Warrants [Member]	Aug. 31, 2007 Series A Preferred Stock [Member] August 2007 Warrants [Member]	Sep. 30, 2014 Series A Preferred Stock [Member]	Dec. 31, 2013 Series A Preferred Stock [Member]	Dec. 31, 2012 Series A Preferred Stock [Member]	Apr. 30, 2012 Series A Preferred Stock [Member]	Apr. 30, 2012 Series B Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] April 2012 Warrants [Member]	May 31, 2011 Series B Preferred Stock [Member] May 2011 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] May 2011 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] May 2011 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] May 2011 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] May 2011 Warrants [Member]	Jun. 30, 2011 Series B Preferred Stock [Member] June 2011 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] June 2011 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] June 2011 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] June 2011 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] June 2011 Warrants [Member]	Sep. 30, 2011 Series B Preferred Stock [Member] September 2011 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] September 2011 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] September 2011 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] September 2011 Warrants [Member]	Nov. 30, 2011 Series B Preferred Stock [Member] November 2011 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] November 2011 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] November 2011 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] November 2011 Warrants [Member]	Dec. 31, 2011 Series B Preferred Stock [Member] December 2011 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] December 2011 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] December 2011 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] December 2011 Warrants [Member]	Jan. 31, 2012 Series B Preferred Stock [Member] January 2012 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] January 2012 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] January 2012 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] January 2012 Warrants [Member]	Feb. 28, 2012 Series B Preferred Stock [Member] February 2012 Warrants [Member]	Feb. 29, 2012 Series B Preferred Stock [Member] February 2012 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] February 2012 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] February 2012 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] February 2012 Warrants [Member]	Sep. 30, 2014 Series B Preferred Stock [Member]	Dec. 31, 2013 Series B Preferred Stock [Member]	Dec. 31, 2012 Series B Preferred Stock [Member]	Apr. 30, 2012 Series B Preferred Stock [Member]	Dec. 31, 2008 December 2008 Warrants [Member]	Nov. 30, 2010 November 2010 Warrants [Member]	Apr. 30, 2012 April 2012 Warrants [Member]
Note 9 - Convertible Preferred Stock (Details) [Line Items]
Preferred Stock, Dividend Rate, Per-Dollar-Amount (in Dollars per share)																																																																																	$ 0.0488	$ 0.0488																																						$ 0.004	$ 0.004
Preferred Stock, Dividends Per Share, Declared (in Dollars per share)																																																																																	$ 0	$ 0																																						$ 0	$ 0
Preferred Stock, Conversion Price (in Dollars per share)																																																																																	$ 0.05	$ 0.05																																						$ 0.05	$ 0.05
Convertible Preferred Stock, Terms of Conversion, Minimum Aggregate Gross Proceeds Required for Automatic Conversion																																																																																	$ 30,000,000	$ 30,000,000																																						$ 30,000,000	$ 30,000,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)	940,189						16,680,324	16,680,324	16,680,324	16,680,324																																																		196,721	196,721	196,721	196,721	245,900	245,900	245,900	245,900	245,900	163,934	163,934	163,934		163,934	163,934	73,770	73,770	73,770	73,770	73,770						2,351,019	2,351,019	2,351,019	2,351,019	2,000,000	2,000,000	2,000,000	2,000,000	2,000,000	4,000,000	4,000,000	4,000,000	4,000,000	4,000,000	4,000,000	4,000,000	4,000,000	4,000,000	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000	910,445	910,445	910,445	910,445	738,535	738,535	738,535	738,535	738,535					196,721	163,934	73,770
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)	$ 0.53						$ 0.06		$ 0.06																																																			$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61		$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61					$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05					$ 0.61	$ 0.61	$ 0.61
Warrant Term	5 years																																																											10 years				10 years					10 years						10 years										10 years				10 years					10 years					10 years				10 years				10 years				10 years				10 years	10 years
Warrant Liabilities Noncurrent			580,187	602,188			623,672	685,213	623,672	623,672	646,844																																																	53,863	44,066	44,066	50,951	70,082	58,278	66,885	58,278	58,278	46,721	46,393	48,524		46,393	46,393	27,443	24,934	26,852	24,934	24,934	357,829					98,743	72,882	72,882	77,584	84,000	54,000	60,000	54,000	54,000	168,000	108,000	120,000	108,000	108,000	168,000	108,000	108,000	120,000	42,000	28,000	28,000	30,000	41,000	28,000	28,000	30,000	37,328	28,224	28,224	30,045	31,018	31,018	22,895	22,895	24,372
Fair Value Assumptions, Expected Dividend Rate																																																												0.00%				0.00%					0.00%			0.00%			0.00%					0.00%					0.00%				0.00%					0.00%					0.00%				0.00%				0.00%				0.00%				0.00%	0.00%
Fair Value Assumptions, Expected Volatility Rate																																																												79.00%				79.00%					79.00%			79.00%			92.00%					46.00%					84.00%				84.00%					84.00%					84.00%				84.00%				84.00%				84.00%				84.00%	84.00%
Fair Value Assumptions, Risk Free Interest Rate																																																												2.70%				2.80%					2.90%			2.90%			1.98%					3.90%					2.00%				3.20%					3.20%					2.00%				2.10%				1.80%				1.80%				1.98%	1.98%
Fair Value Assumptions, Expected Term																																																												10 years				10 years					10 years			10 years			10 years					1 year 146 days					10 years				10 years					10 years					10 years				10 years				10 years				10 years				10 years	10 years
Fair Value Adjustment of Warrants		$ 7,277	$ 22,001	$ 21,484	$ (50,762)	$ (11,230)	$ (61,541)	$ (156,163)	$ (622,824)			$ 9,639	$ (2,361)	$ 6,885	$ (4,131)	$ 9,797	$ 11,803	$ (984)	$ 2,295	$ (1,311)	$ 3,025	$ 885	$ 68,393	$ 266,293	$ 23,143	$ 9,404	$ 2,351	$ 4,702	$ 21,159	$ 25,861	$ 2,000	$ 2,000	$ 4,000	$ 4,000	$ 0	$ 4,000	$ 12,000	$ 46,000	$ 60,000	$ 1,000	$ 1,000	$ 2,000	$ 11,000	$ 14,000	$ 1,000	$ 0	$ 2,000	$ 11,000	$ 13,000	$ 3,642	$ 910	$ 1,821	$ 7,283	$ 9,104	$ 2,954	$ 740	$ 1,477	$ 6,646	$ 8,123						$ 8,607	$ (5,900)	$ 11,804			$ 2,131	$ (6,485)		$ 328			$ 1,918	$ 591	$ 2,509												$ 6,000	$ 23,000	$ 30,000			$ 12,000	$ 46,000	$ 60,000
Preferred Stock, Shares Authorized (in Shares)																																																																																	24,543,626	24,543,626	24,543,626	24,543,626																																				227,000,000	227,000,000	227,000,000	227,000,000

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Note 11 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	2012			2013
Net operating loss carryforwards	$	3,951,000		$	4,203,000
Research and development credits		162,000			162,000
Start-up expenses capitalized		5,726,000			7,156,000
Accruals and reserves		150,000			99,000
Property and equipment		(22,000	)		(11,000	)
		9,967,000			11,609,000
Less: Valuation allowance		(9,967,000	)		(11,609,000	)
	$	-		$	-

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Note 1 - The Company and Basis of Presentation (Details) (USD $)	1 Months Ended	3 Months Ended	9 Months Ended				1 Months Ended	0 Months Ended	1 Months Ended		0 Months Ended
	Sep. 23, 2014	Sep. 30, 2014	Sep. 30, 2014	Dec. 31, 2013	Dec. 30, 2013	Dec. 31, 2012	Sep. 23, 2014 Accrued Interest [Member] Convertible Debt [Member]	May 09, 2014 Accrued Interest [Member] GBS [Member]	Sep. 23, 2014 Convertible Debt [Member]	Sep. 23, 2014 Viveve [Member]	May 09, 2014 GBS [Member]
Note 1 - The Company and Basis of Presentation (Details) [Line Items]
Extinguishment of Debt, Amount			$ 5,397,278				$ 522,000		$ 4,875,000
	573,000	572,910	572,910
Conversion of Stock, Shares Issued (in Shares)	3,743,282									3,743,282
Percentage of Total Common Stock Attributable to Viveve Capital Stock Converted										62.00%
Payment to Each Non-Accredited Investors For Converted Shares Upon Merger										16,500
Stock Issued During Period, Shares, Other (in Shares)											943,596
Proceeds from Issuance of Private Placement	6,000,000		4,204,220
Debt Conversion, Original Debt, Amount	$ 1,545,678		$ 1,545,678					$ 211,000			$ 1,750,000
Stock Issued During Period, Shares, New Issues (in Shares)	11,305,567
Warrant Term	5 years
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)	940,189			16,680,324	16,680,324	16,680,324
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)	$ 0.53			$ 0.06

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Note 3 - Fair Value Measurements

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

3. Fair Value Measurements

The Company recognizes and discloses the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). Each level of input has different levels of subjectivity and difficulty involved in determining fair value.

Level 1 Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date. Therefore, determining fair value for Level 1 investments generally does not require significant judgment, and the estimation is not difficult.

Level 2 Pricing is provided by third party sources of market information obtained through investment advisors. The Company does not adjust for or apply any additional assumptions or estimates to the pricing information received from its advisors.

Level 3 Inputs used to measure fair value are unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. The determination of fair value for Level 3 instruments involves the most management judgment and subjectivity.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

The Company’s Level 1 financial asset is a money market fund with a fair value that is based on quoted market prices. The money market fund is included in cash and cash equivalents on the Company’s condensed consolidated balance sheet. The Company’s Level 3 liability consists of convertible preferred stock warrant liabilities. The valuation of the warrant liabilities is discussed in Note 8.

For the period ended September 30, 2014, the Company did not have any transfers between Level 1, Level 2 and Level 3.

The following tables set forth the Company’s financial instruments that were measured at fair value on a recurring basis as of September 30, 2014 and December 31, 2013 by level within the fair value hierarchy:

	Assets and Liabilities at Fair Value as of September 30, 2014
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
	Level 1		Level 2		Level 3		Total
Assets
Money market fund	$	190	$	-	$	-	$	190
Total assets	$	190	$	-	$	-	$	190
Liabilities
Preferred stock warrant liabilities	$	-	$	-	$	-	$	-
Total liabilities	$	-	$	-	$	-	$	-

	Assets and Liabilities at Fair Value as of December 31, 2013
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
	Level 1		Level 2		Level 3		Total
Assets
Money market fund	$	324	$	-	$	-	$	324
Total assets	$	324	$	-	$	-	$	324
Liabilities
Preferred stock warrant liabilities	$	-	$	-	$	623,672	$	623,672
Total liabilities	$	-	$	-	$	623,672	$	623,672

The change in the fair value of the preferred stock warrant liabilities is summarized below:

Fair value as of December 31, 2013	$	623,672
Change in fair value recorded in other income (expense), net		(21,484	)
Fair value as of March 31, 2014		602,188
Change in fair value recorded in other income (expense), net		(22,001	)
Fair value as of June 30, 2014		580,187
Change in fair value recorded in other income (expense), net, as of September 23, 2014, date of the Merger Agreement		(7,277	)
Extinguishment of warrant liabilities pursuant to the Merger Agreement (reclassified to equity)		(572,910	)
Fair value as of September 30, 2014	$	-

All assets and liabilities carried at fair value have been valued using a market approach, except for Level 3. The following table describes the valuation techniques used to calculate fair value for Level 3 liabilities. For Level 3 liabilities, the Company determines the fair value measurement valuation policies and procedures. Annually, the Board of Directors assess and approve the fair value measurement policies and procedures. At least annually, the Company determines if the current valuation techniques used in the fair value measurements are still appropriate and evaluates and adjusts the unobservable inputs used in the fair value measurements based on current market conditions and third-party information.

	Fair Value as of		Valuation	Unobservable	Range
	December 31, 2013		Techniques	Input	(Weighted-Average)
Preferred stock warrant liabilities	$	623,672	Black-Scholes	Preferred series
			option pricing	prices	$0.04	-	$0.44	(-	$0.06	-)
			model
				Volatility	70.62%	-	84.23%	(-	76%	-)

There were no changes in valuation technique from prior periods.

3. Fair Value Measurements

The Company recognizes and discloses the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). Each level of input has different levels of subjectivity and difficulty involved in determining fair value.

Level 1 Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date. Therefore, determining fair value for Level 1 investments generally does not require significant judgment, and the estimation is not difficult.

Level 2 Pricing is provided by third party sources of market information obtained through investment advisors. The Company does not adjust for or apply any additional assumptions or estimates to the pricing information received from its advisors.

Level 3 Inputs used to measure fair value are unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. The determination of fair value for Level 3 instruments involves the most management judgment and subjectivity.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and considers factors specific to the asset or liability.

The Company’s Level 1 financial asset is a money market fund with a fair value that is based on quoted market prices. The money market fund is included in cash and cash equivalents on the Company’s balance sheets. The Company’s Level 3 liability consists of convertible preferred stock warrant liabilities. The valuation of the warrant liabilities is discussed in Note 9. The following tables set forth the Company’s financial instruments that were measured at fair value on a recurring basis at December 31, 2012 and 2013 by level within the fair value hierarchy:

	Assets and Liabilities at Fair Value as of December 31, 2012
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
	Level 1		Level 2		Level 3		Total
Assets
Money market fund	$	503	$	-	$	-	$	503
Total assets	$	503	$	-	$	-	$	503
Liabilities
Preferred stock warrant liabilities	$	-	$	-	$	685,213	$	685,213
Total liabilities	$	-	$	-	$	685,213	$	685,213

	Assets and Liabilities at Fair Value as of December 31, 2013
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
	Level 1		Level 2		Level 3		Total
Assets
Money market fund	$	324	$	-	$	-	$	324
Total assets	$	324	$	-	$	-	$	324
Liabilities
Preferred stock warrant liabilities	$	-	$	-	$	623,672	$	623,672
Total liabilities	$	-	$	-	$	623,672	$	623,672

The change in the fair value of the preferred stock warrant liabilities is summarized below:

Fair value as of December 31, 2011	$	646,844
Fair value of warrants issued		194,532
Change in fair value recorded in other income (expense), net		(156,163	)
Fair value as of December 31, 2012		685,213
Fair value of warrants issued		-
Change in fair value recorded in other income (expense), net		(61,541	)
Fair value as of December 31, 2013	$	623,672

 All assets and liabilities have been valued using a market approach, except for Level 3. The following table describes the valuation techniques used to calculate fair value for Level 3 liabilities. For Level 3 liabilities, the Company determines the fair value measurement valuation policies and procedures. Annually, the Board of Directors assess and approve the fair value measurement policies and procedures. At least annually, the Company determines if the current valuation techniques used in the fair value measurements are still appropriate and evaluates and adjusts the unobservable inputs used in the fair value measurements based on current market conditions and third-party information.

	Fair Value as of				Range
	December 31, 2012		Valuation	Unobservable	(Weighted-Average)
Preferred stock	$	685,213	Black-Scholes	Preferred series
warrant liabilities			option pricing model	prices	$0.04	-	0.44	(-	$0.06	-)
				Volatility	74.2%	-	91.6%	(-	83%	-)

	Fair Value as of				Range
	December 31, 2013		Valuation	Unobservable	(Weighted-Average)
Preferred stock	$	623,672	Black-Scholes	Preferred series
warrant liabilities			option pricing model	prices	$0.04	-	0.44	(-	$0.06	-)
				Volatility	70.6%	-	84.2%	(-	76%	-)

There were no changes in the valuation technique and related inputs from prior periods.

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Note 2 - Summary of Significant Accounting Policies (Details) (USD $)	12 Months Ended		99 Months Ended	9 Months Ended	12 Months Ended		3 Months Ended	9 Months Ended	3 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Sep. 30, 2014 Three Customers [Member] Sales Revenue, Net [Member] Customer Concentration Risk [Member]	Dec. 31, 2013 Three Customers [Member] Sales Revenue, Net [Member] Customer Concentration Risk [Member]	Dec. 31, 2012 Three Customers [Member] Sales Revenue, Net [Member] Customer Concentration Risk [Member]	Sep. 30, 2013 One Customer [Member] Sales Revenue, Net [Member] Customer Concentration Risk [Member]	Sep. 30, 2013 One Customer [Member] Sales Revenue, Net [Member] Customer Concentration Risk [Member]	Sep. 30, 2014 Two Customers [Member] Sales Revenue, Net [Member] Customer Concentration Risk [Member]	Dec. 31, 2013 Minimum [Member]	Dec. 31, 2013 Maximum [Member]
Note 2 - Summary of Significant Accounting Policies (Details) [Line Items]
Concentration Risk, Percentage				94.00%	100.00%	100.00%	100.00%	100.00%	79.00%
Property, Plant and Equipment, Estimated Useful Lives										three	five
Advertising Expense (in Dollars)	$ 264,834	$ 7,812	$ 918,013

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Note 6 - Related Party Convertible Bridge Notes (Details) (USD $)				1 Months Ended		4 Months Ended		1 Months Ended					0 Months Ended	1 Months Ended			9 Months Ended					0 Months Ended				0 Months Ended				0 Months Ended					0 Months Ended	1 Months Ended			5 Months Ended		5 Months Ended		5 Months Ended	1 Months Ended		2 Months Ended		2 Months Ended					4 Months Ended	25 Months Ended		1 Months Ended		12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Dec. 31, 2012	Apr. 30, 2012 Series B Preferred Stock [Member] Related Party Convertible Bridge Notes [Member] Aggregate of the May 2011 Notes, Including June and September 2011 Amendments [Member]	Apr. 30, 2012 Series B Preferred Stock [Member] Related Party Convertible Bridge Notes [Member] Aggregate of the November 2011 Notes, Including January and March Amendments [Member]	Jul. 30, 2012 Series B Preferred Stock [Member] Related Party Convertible Bridge Notes [Member] May 2011 Notes and November 2011 Notes [Member]	Jul. 30, 2012 Series B Preferred Stock [Member]	Nov. 30, 2012 Related Party Convertible Bridge Notes [Member] November 2012 Convertible Promissory Note [Member]	Sep. 30, 2014 Related Party Convertible Bridge Notes [Member] November 2012 Convertible Promissory Note [Member]	Dec. 31, 2013 Related Party Convertible Bridge Notes [Member] November 2012 Convertible Promissory Note [Member]	Dec. 30, 2013 Related Party Convertible Bridge Notes [Member] November 2012 Convertible Promissory Note [Member]	Dec. 31, 2012 Related Party Convertible Bridge Notes [Member] November 2012 Convertible Promissory Note [Member]	Feb. 13, 2013 Related Party Convertible Bridge Notes [Member] 2013 Note Purchase Agreement [Member]	Aug. 31, 2013 Related Party Convertible Bridge Notes [Member] 2013 Note Purchase Agreement [Member]	Jun. 30, 2013 Related Party Convertible Bridge Notes [Member] 2013 Note Purchase Agreement [Member]	Apr. 30, 2013 Related Party Convertible Bridge Notes [Member] 2013 Note Purchase Agreement [Member]	Sep. 30, 2014 Related Party Convertible Bridge Notes [Member] 2013 Note Purchase Agreement [Member]	Dec. 31, 2013 Related Party Convertible Bridge Notes [Member] 2013 Note Purchase Agreement [Member]	Dec. 30, 2013 Related Party Convertible Bridge Notes [Member] 2013 Note Purchase Agreement [Member]	Aug. 07, 2013 Related Party Convertible Bridge Notes [Member] 2013 Note Purchase Agreement [Member]	Feb. 13, 2013 Related Party Convertible Bridge Notes [Member] 2013 Note Purchase Agreement [Member]	Sep. 27, 2013 Related Party Convertible Bridge Notes [Member] September 2013 Note Purchase Agreement [Member]	Sep. 30, 2014 Related Party Convertible Bridge Notes [Member] September 2013 Note Purchase Agreement [Member]	Dec. 30, 2013 Related Party Convertible Bridge Notes [Member] September 2013 Note Purchase Agreement [Member]	Sep. 27, 2013 Related Party Convertible Bridge Notes [Member] September 2013 Note Purchase Agreement [Member]	Nov. 12, 2013 Related Party Convertible Bridge Notes [Member] November 2013 Note Purchase Agreement [Member]	Sep. 30, 2014 Related Party Convertible Bridge Notes [Member] November 2013 Note Purchase Agreement [Member]	Dec. 30, 2013 Related Party Convertible Bridge Notes [Member] November 2013 Note Purchase Agreement [Member]	Nov. 12, 2013 Related Party Convertible Bridge Notes [Member] November 2013 Note Purchase Agreement [Member]	Dec. 27, 2013 Related Party Convertible Bridge Notes [Member] December 2013 Note Purchase Agreement [Member]	Sep. 30, 2014 Related Party Convertible Bridge Notes [Member] December 2013 Note Purchase Agreement [Member]	Dec. 31, 2013 Related Party Convertible Bridge Notes [Member] December 2013 Note Purchase Agreement [Member]	Dec. 30, 2013 Related Party Convertible Bridge Notes [Member] December 2013 Note Purchase Agreement [Member]	Dec. 27, 2013 Related Party Convertible Bridge Notes [Member] December 2013 Note Purchase Agreement [Member]	Mar. 05, 2014 Related Party Convertible Bridge Notes [Member] March 2014 Note Purchase Agreement [Member]	Jun. 30, 2014 Related Party Convertible Bridge Notes [Member] March 2014 Note Purchase Agreement [Member]	Mar. 05, 2014 Related Party Convertible Bridge Notes [Member] March 2014 Note Purchase Agreement [Member]	Jul. 07, 2014 Related Party Convertible Bridge Notes [Member] July 2013 Note Purchase Agreement [Member]	Sep. 30, 2011 Related Party Convertible Bridge Notes [Member] May 2011 Convertible Promissory Note [Member]	May 31, 2011 Related Party Convertible Bridge Notes [Member] May 2011 Convertible Promissory Note [Member]	Sep. 30, 2011 Related Party Convertible Bridge Notes [Member] June 2011 Amendment of May 2011 Convertible Promissory Note [Member]	Jun. 30, 2011 Related Party Convertible Bridge Notes [Member] June 2011 Amendment of May 2011 Convertible Promissory Note [Member]	Sep. 30, 2011 Related Party Convertible Bridge Notes [Member] September 2011 Amendment of May 2011 Convertible Promissory Note [Member]	Apr. 30, 2012 Related Party Convertible Bridge Notes [Member] Aggregate of the May 2011 Notes, Including June and September 2011 Amendments [Member]	Sep. 30, 2011 Related Party Convertible Bridge Notes [Member] Aggregate of the May 2011 Notes, Including June and September 2011 Amendments [Member]	Dec. 31, 2011 Related Party Convertible Bridge Notes [Member] November 2011 Closing of November 2011 Note [Member]	Nov. 30, 2011 Related Party Convertible Bridge Notes [Member] November 2011 Closing of November 2011 Note [Member]	Dec. 31, 2011 Related Party Convertible Bridge Notes [Member] December 2011 Closing of November 2011 Note [Member]	Nov. 30, 2011 Related Party Convertible Bridge Notes [Member] December 2011 Closing of November 2011 Note [Member]	Nov. 30, 2011 Related Party Convertible Bridge Notes [Member] November 2011 Convertible Promissory Note [Member]	Jan. 31, 2012 Related Party Convertible Bridge Notes [Member] January 2012 Amendment to November 2011 Note [Member]	Mar. 31, 2012 Related Party Convertible Bridge Notes [Member] March 2012 Amendment to November 2011 Note [Member]	Apr. 30, 2012 Related Party Convertible Bridge Notes [Member] Three Separate Closings of the January/March 2012 Amendments to November 2011 Note [Member]	Apr. 30, 2014 Related Party Convertible Bridge Notes [Member] Aggregate of the November 2011 Notes, Including January and March Amendments [Member]	Apr. 30, 2012 Related Party Convertible Bridge Notes [Member] Aggregate of the November 2011 Notes, Including January and March Amendments [Member]	Aug. 31, 2013 Related Party Convertible Bridge Notes [Member] 2013 Note Purchase Agreement [Member]	Jun. 30, 2013 Related Party Convertible Bridge Notes [Member] 2013 Note Purchase Agreement [Member]	Dec. 30, 2013 Related Party Convertible Bridge Notes [Member]
Note 6 - Related Party Convertible Bridge Notes (Details) [Line Items]
Debt Instrument, Face Amount								$ 1,000,000																																$ 1,000,000		$ 1,000,000	$ 1,000,000		$ 3,000,000		$ 250,000		$ 250,000	$ 500,000			$ 1,000,000		$ 1,500,000
Debt Instrument, Interest Rate, Stated Percentage								8.00%													8.00%				8.00%				8.00%					9.00%			9.00%	9.00%		8.00%										8.00%
Minimum Gross Proceeds from Issuance of Common or Preferred Stock								5,000,000					5,000,000									5,000,000				5,000,000				5,000,000
Convertible Debt									0	1,000,000	1,000,000	1,000,000					0	2,500,000	2,500,000				0	500,000			0	500,000			0	375,000	375,000
Interest Payable, Current	13,792	235,603	8,987							88,986	88,986	8,987						130,466	130,466					10,411				5,370					370
Maximum Authorized Convertible Promissory Notes Issuable															2,000,000					2,500,000	1,500,000				500,000				500,000					375,000			1,250,000	250,000													500,000	500,000					2,000,000
Proceeds from Convertible Debt													1,000,000	500,000	500,000	500,000																			200,000	1,050,000																				500,000
Debt Instrument, Convertible, Conversion Price as a Percentage of Purchase Price																					80.00%				70.00%				70.00%					70.00%
Debt Instrument, Convertible, Conversion Price (in Dollars per share)				$ 0.05	$ 0.05																$ 0.05				$ 0.05				$ 0.05					$ 0.05
Debt Instrument, Redemption Price, Percentage of Principal Amount and Accrued and Unpaid Interest Redeemed																	300.00%																																									300.00%
Warrant to Purchase Series B Convertible Preferred Stock, Coverage Amount, Percentage																																							10.00%		20.00%		20.00%			20.00%		20.00%					20.00%
Debt Conversion, Converted Instrument, Amount						$ 4,709,968																																						$ 3,188,494										$ 1,521,474
Debt Conversion, Converted Instrument, Shares Issued (in Shares)				63,769,863	30,429,485	94,199,348
Stock Issued During Period, Shares, Other (in Shares)							171,199,348
Shares Issued, Price Per Share (in Dollars per share)							$ 0.05

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Note 13 - Subsequent Events (Details) (USD $)	0 Months Ended		0 Months Ended
	Jan. 31, 2014 Related Party Convertible Bridge Notes [Member] Subsequent Event [Member] January 2014 Convertible Bridge Notes [Member]	Mar. 05, 2014 Related Party Convertible Bridge Notes [Member] Subsequent Event [Member] March 2014 Convertible Promissory Notes [Member]	Oct. 01, 2014 Subsequent Event [Member] Loan and Security Agreement [Member]	Oct. 01, 2014 Subsequent Event [Member]	Sep. 30, 2014 Loan and Security Agreement [Member]
Note 13 - Subsequent Events (Details) [Line Items]
Debt Instrument, Face Amount					$ 5,000,000
Number of Tranches					3
Proceeds from Issuance of Debt			2,500,000
Repayments of Debt				1,630,925
Contingent Bridge Loan Proceeds	500,000
Maximum Authorized Convertible Promissory Notes Issuable		500,000
Convertible Notes Payable		$ 100,000
Debt Instrument, Interest Rate, Stated Percentage		9.00%

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Condensed Consolidated Balance Sheets (Current Period Unaudited) (USD $)	Sep. 30, 2014	Dec. 31, 2013	Dec. 31, 2012
ASSETS
Cash and cash equivalents	$ 1,976,980	$ 430,107	$ 448,754
Accounts receivable	3,750		849
Inventory	136,902	228,163	360,214
Prepaids and other current assets	188,006	308,183	64,522
Total current assets	2,305,638	966,453	874,339
Property and equipment, net	191,663	127,524	128,627
Other assets	652,045	43,783	57,713
Total assets	3,149,346	1,137,760	1,060,679
Current liabilities:
Accounts payable	566,059	967,315	485,577
Accrued liabilities	387,538	516,152	345,644
Note payable	1,471,799	1,463,244	1,581,390
Related party convertible bridge notes		4,875,000	1,000,000
Total current liabilities	2,425,396	7,821,711	3,412,611
Accrued liabilities, noncurrent			41,127
Preferred stock warrant liabilities		623,672	685,213
Total liabilities	2,425,396	8,445,383	4,138,951
Stockholders’ deficit:
Common stock	35,066,274	6,556	6,556
Additional paid-in capital		22,395,684	22,308,256
Deficit accumulated during the development stage	(34,342,324)	(29,904,925)	(25,588,146)
Total stockholders’ deficit	723,950	(7,307,623)	(3,078,272)
Total liabilities and stockholders’ deficit	3,149,346	1,137,760	1,060,679
Series A Preferred Stock [Member]
Stockholders’ deficit:
Convertible Preferred Stock		23,863	23,863
Series B Preferred Stock [Member]
Stockholders’ deficit:
Convertible Preferred Stock		$ 171,199	$ 171,199

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Note 9 - Convertible Preferred Stock (Details) - Convertible Preferred Stock Warrants Outstanding (USD $)								12 Months Ended				12 Months Ended				12 Months Ended				12 Months Ended				12 Months Ended				12 Months Ended				12 Months Ended				12 Months Ended				12 Months Ended				12 Months Ended				12 Months Ended					12 Months Ended
	Sep. 23, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Dec. 30, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 30, 2013 Series A Preferred Stock [Member] December 2008 Warrants [Member]	Dec. 31, 2013 Series A Preferred Stock [Member] December 2008 Warrants [Member]	Dec. 31, 2012 Series A Preferred Stock [Member] December 2008 Warrants [Member]	Dec. 31, 2008 Series A Preferred Stock [Member] December 2008 Warrants [Member]	Dec. 30, 2013 Series A Preferred Stock [Member] April 2009 Warrants [Member]	Dec. 31, 2013 Series A Preferred Stock [Member] April 2009 Warrants [Member]	Dec. 31, 2012 Series A Preferred Stock [Member] April 2009 Warrants [Member]	Apr. 30, 2009 Series A Preferred Stock [Member] April 2009 Warrants [Member]	Dec. 30, 2013 Series A Preferred Stock [Member] November 2010 Warrants [Member]	Dec. 31, 2013 Series A Preferred Stock [Member] November 2010 Warrants [Member]	Dec. 31, 2012 Series A Preferred Stock [Member] November 2010 Warrants [Member]	Nov. 30, 2010 Series A Preferred Stock [Member] November 2010 Warrants [Member]	Dec. 30, 2013 Series A Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 31, 2013 Series A Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 31, 2012 Series A Preferred Stock [Member] April 2012 Warrants [Member]	Apr. 30, 2012 Series A Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] May 2011 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] May 2011 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] May 2011 Warrants [Member]	May 31, 2011 Series B Preferred Stock [Member] May 2011 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] June 2011 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] June 2011 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] June 2011 Warrants [Member]	Jun. 30, 2011 Series B Preferred Stock [Member] June 2011 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] September 2011 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] September 2011 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] September 2011 Warrants [Member]	Sep. 30, 2011 Series B Preferred Stock [Member] September 2011 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] November 2011 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] November 2011 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] November 2011 Warrants [Member]	Nov. 30, 2011 Series B Preferred Stock [Member] November 2011 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] December 2011 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] December 2011 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] December 2011 Warrants [Member]	Dec. 31, 2011 Series B Preferred Stock [Member] December 2011 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] January 2012 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] January 2012 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] January 2012 Warrants [Member]	Jan. 31, 2012 Series B Preferred Stock [Member] January 2012 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] February 2012 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] February 2012 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] February 2012 Warrants [Member]	Feb. 29, 2012 Series B Preferred Stock [Member] February 2012 Warrants [Member]	Feb. 28, 2012 Series B Preferred Stock [Member] February 2012 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] April 2012 Warrants [Member]	Apr. 30, 2012 Series B Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 31, 2008 December 2008 Warrants [Member]	Nov. 30, 2010 November 2010 Warrants [Member]	Apr. 30, 2012 April 2012 Warrants [Member]
Class of Warrant or Right [Line Items]
Expiration Date								Dec. 02, 2018	Dec. 02, 2018	Dec. 02, 2018		Apr. 02, 2019	Apr. 02, 2019	Apr. 02, 2019		Nov. 19, 2020	Nov. 19, 2020	Nov. 19, 2020		Apr. 19, 2022	Apr. 19, 2022	Apr. 19, 2022		May 06, 2021	May 06, 2021	May 06, 2021		Jun. 30, 2021	Jun. 30, 2021	Jun. 30, 2021		Sep. 09, 2021	Sep. 09, 2021	Sep. 09, 2021		Nov. 30, 2021	Nov. 30, 2021	Nov. 30, 2021		Dec. 19, 2021	Dec. 19, 2021	Dec. 19, 2021		Jan. 31, 2022	Jan. 31, 2022	Jan. 31, 2022		Feb. 28, 2022	Feb. 28, 2022	Feb. 28, 2022			Apr. 16, 2022	Apr. 16, 2022	Apr. 16, 2022
Exercise Price	$ 0.53			$ 0.06				$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.61	$ 0.61	$ 0.61
Number of Shares Outstanding under Warrants	940,189			16,680,324	16,680,324	16,680,324		196,721	196,721	196,721	196,721	245,900	245,900	245,900	245,900	163,934	163,934	163,934	163,934	73,770	73,770	73,770	73,770	2,000,000	2,000,000	2,000,000	2,000,000	4,000,000	4,000,000	4,000,000	4,000,000	4,000,000	4,000,000	4,000,000	4,000,000	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000	910,445	910,445	910,445	910,445	738,535	738,535	738,535	738,535	738,535	2,351,019	2,351,019	2,351,019	2,351,019	196,721	163,934	73,770
Fair Value		$ 580,187	$ 602,188	$ 623,672	$ 623,672	$ 685,213	$ 646,844	$ 44,066	$ 44,066	$ 50,951	$ 53,863	$ 58,278	$ 58,278	$ 66,885	$ 70,082	$ 46,393	$ 46,393	$ 48,524	$ 46,721	$ 24,934	$ 24,934	$ 26,852	$ 27,443	$ 54,000	$ 54,000	$ 60,000	$ 84,000	$ 108,000	$ 108,000	$ 120,000	$ 168,000	$ 108,000	$ 108,000	$ 120,000	$ 168,000	$ 28,000	$ 28,000	$ 30,000	$ 42,000	$ 28,000	$ 28,000	$ 30,000	$ 41,000	$ 28,224	$ 28,224	$ 30,045	$ 37,328	$ 22,895	$ 22,895	$ 24,372	$ 31,018	$ 31,018	$ 72,882	$ 72,882	$ 77,584	$ 98,743

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Note 1 - The Company and Basis of Presentation

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. The Company and Basis of Presentation

On September 23, 2014, PLC Systems, Inc., a Yukon Territory corporation (“PLC”) completed an Agreement and Plan of Merger (“Merger Agreement” or “Merger”) with Viveve®, Inc., a Delaware corportation (“Viveve”). As of that date, Viveve operates as a wholly-owned subsidiary of PLC and PLC is known as Viveve Medical, Inc. (“Viveve Medical”, the “Company”, “we”, “our”, or “us”). Viveve Medical will compete in the women’s health market with a focus on the Viveve System™ to improve women’s overall sexual well-being and quality of life, will retain all its personnel and continue to be headquartered in Sunnyvale, California.

At the effective time of the Merger, PLC divested its ownership of its former operating subsidiaries, PLC Medical Systems, Inc. and PLC Systemas Medicos Internacionais, which will operate as independent entities going forward under new ownership.

In preparation for the stock exchange pursuant to the Merger, Viveve convertible bridge notes in the aggregate amount of $4,875,000 and related accrued interest of approximately $522,000 were extinguished.  

Additionally, Viveve warrant liabilities of approximately $573,000 were extinguished in preparation of the stock exchange pursuant to the Merger.

Pursuant to the Merger Agreement, all shares of capital stock (including common and preferred stock) of Viveve were converted into 3,743,282 shares of the Company's common stock which represented approximately 62% of the issued and outstanding shares of common stock of the Company on a fully diluted basis. In addition, non-accredited investors were entitled to receive approximately $16,500 upon closing. Upon the closing of the Merger, the Company issued an additional 943,596 shares of common stock upon the automatic conversion of a warrant issued in exchange for the cancellation of related party convertible bridge notes.

The acquisition was accounted for as a reverse merger and recapitalization effected by a share exchange. Viveve is considered the acquirer for accounting and financial reporting purposes. The assets and liabilities of the acquired entity have been brought forward at their book value and no goodwill has been recognized. 

Concurrent with the Merger, Viveve Medical completed a private placement for total gross proceeds of approximately $6 million (including approximately $1.5 million of convertible bridge note conversion). As a result, Viveve Medical issued 11,305,567 shares of common stock and 5-year warrants to purchase up to 940,189 shares of common stock at an exercise price of $0.53 per share.

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  (“US GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US 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 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 proxy statement which was filed with the Securities and Exchange Commission on August 11, 2014. The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results for the year ending December 31, 2014 or any future interim period.

1. Formation and Business of the Company

Viveve, Inc. (the “Company”) was incorporated in the state of Delaware on September 21, 2005 for the purpose of the design, development, manufacture and marketing of medical devices for the non-invasive treatment of vaginal laxity.

The Company is considered to be in the development stage and, since inception, has devoted substantially all of its time and effort to developing products, raising capital and recruiting personnel. The Company has not generated substantial revenues to date from its planned principal operations. As such, it is subject to risks common to companies in the development stage including but not limited to, development of new products, markets and distribution channels, dependence on key personnel, and the ability to obtain additional capital to fund its product plans. The Company may require additional resources to complete the commercialization of its proposed products. Therefore, the Company may need to raise additional capital in the future to fund its operations. The Company may at that time be unable to raise such funds when needed or on acceptable terms. If the Company fails to raise additional funds as needed it may have to delay or terminate its product development.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred recurring losses and negative cash flows from operations since inception. The Company has not generated significant revenues and has funded its operating losses through the sale of preferred stock and the issuance of debt. The Company has a limited operating history and its prospects are subject to risks, expenses and uncertainties frequently encountered by companies in the industry. These risks include, but are not limited to, the uncertainty of availability of additional financing and the uncertainty of achieving future profitability. Management of the Company intends to raise additional funds through the issuance of equity securities. There can be no assurance that such financing will be available or on terms which are favorable to the Company. Failure to generate sufficient cash flows from operations, raise additional capital or reduce certain discretionary spending could have a material adverse effect on the Company’s ability to achieve its intended business objectives. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not contain any adjustments that might result from the outcome of this uncertainty.

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Note 4 - Balance Sheet Components (Details) - Accrued Liabilities (USD $)	Sep. 30, 2014	Dec. 31, 2013	Dec. 31, 2012
Accrued Liabilities [Abstract]
Accrued settlement related costs			$ 263,560
Accrued interest	13,792	235,603	8,987
Accrued severence pay		58,846
Accrued vacation	73,809	81,499	54,153
Accrued loan restructuring fees	47,500	27,288
Deferred rent		15,284	18,034
Other accruals	41,766	21,444	910
Total accrued liabilities	$ 387,538	$ 516,152	$ 345,644

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Note 3 - Fair Value Measurements (Details) - Summary of Changes in Fair Value of Preferred Stock Warrant Liabilities (USD $)	1 Months Ended	3 Months Ended			9 Months Ended		12 Months Ended		99 Months Ended
	Sep. 23, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 30, 2013	Dec. 31, 2011
Summary of Changes in Fair Value of Preferred Stock Warrant Liabilities [Abstract]
Fair value			$ 580,187	$ 602,188			$ 623,672	$ 685,213	$ 623,672	$ 623,672	$ 646,844
Change in fair value recorded in other income (expense), net		(7,277)	(22,001)	(21,484)	50,762	11,230	61,541	156,163	622,824
Extinguishment of warrant liabilities pursuant to the Merger Agreement (reclassified to equity)	$ (573,000)	$ (572,910)			$ (572,910)

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Note 10 - Stock Option Plan (Details) - Summary of Options Outstanding and Exercisable (USD $)	12 Months Ended
	Dec. 31, 2013	Sep. 30, 2014
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price (in Dollars per share)		$ 1.02
Number outstanding	45,146,118	2,294,535
Weighted-average remaining contractual life	8 years 292 days
Number of options	15,025,985	413,059
Weighted-average exercise price (in Dollars per share)	$ 0.02	$ 2.94
Range One [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price (in Dollars per share)	$ 0.001	$ 0.12
Number outstanding	40,000	320
Weighted-average remaining contractual life	2 years 346 days
Number of options	40,000	320
Weighted-average exercise price (in Dollars per share)	$ 0.001	$ 0.12
Range Two [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price (in Dollars per share)	$ 0.06	$ 0.60
Number outstanding	980,250	1,901,476
Weighted-average remaining contractual life	5 years 248 days
Number of options	921,104	20,000
Weighted-average exercise price (in Dollars per share)	$ 0.06	$ 0.60
Range Three [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price (in Dollars per share)	$ 0.15	$ 1.24
Number outstanding	514,833	314,036
Weighted-average remaining contractual life	7 years 343 days
Number of options	447,055	314,036
Weighted-average exercise price (in Dollars per share)	$ 0.15	$ 1.24
Range Four [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price (in Dollars per share)	$ 0.01	$ 8.63
Number outstanding	43,611,035	59,372
Weighted-average remaining contractual life	8 years 324 days
Number of options	13,617,826	59,372
Weighted-average exercise price (in Dollars per share)	$ 0.01	$ 8.63

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Note 3 - Fair Value Measurements (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	Assets and Liabilities at Fair Value as of September 30, 2014
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
	Level 1		Level 2		Level 3		Total
Assets
Money market fund	$	190	$	-	$	-	$	190
Total assets	$	190	$	-	$	-	$	190
Liabilities
Preferred stock warrant liabilities	$	-	$	-	$	-	$	-
Total liabilities	$	-	$	-	$	-	$	-

	Assets and Liabilities at Fair Value as of December 31, 2013
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
	Level 1		Level 2		Level 3		Total
Assets
Money market fund	$	324	$	-	$	-	$	324
Total assets	$	324	$	-	$	-	$	324
Liabilities
Preferred stock warrant liabilities	$	-	$	-	$	623,672	$	623,672
Total liabilities	$	-	$	-	$	623,672	$	623,672

	Assets and Liabilities at Fair Value as of December 31, 2012
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
	Level 1		Level 2		Level 3		Total
Assets
Money market fund	$	503	$	-	$	-	$	503
Total assets	$	503	$	-	$	-	$	503
Liabilities
Preferred stock warrant liabilities	$	-	$	-	$	685,213	$	685,213
Total liabilities	$	-	$	-	$	685,213	$	685,213

	Assets and Liabilities at Fair Value as of December 31, 2013
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
	Level 1		Level 2		Level 3		Total
Assets
Money market fund	$	324	$	-	$	-	$	324
Total assets	$	324	$	-	$	-	$	324
Liabilities
Preferred stock warrant liabilities	$	-	$	-	$	623,672	$	623,672
Total liabilities	$	-	$	-	$	623,672	$	623,672

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

Fair value as of December 31, 2013	$	623,672
Change in fair value recorded in other income (expense), net		(21,484	)
Fair value as of March 31, 2014		602,188
Change in fair value recorded in other income (expense), net		(22,001	)
Fair value as of June 30, 2014		580,187
Change in fair value recorded in other income (expense), net, as of September 23, 2014, date of the Merger Agreement		(7,277	)
Extinguishment of warrant liabilities pursuant to the Merger Agreement (reclassified to equity)		(572,910	)
Fair value as of September 30, 2014	$	-

Fair value as of December 31, 2011	$	646,844
Fair value of warrants issued		194,532
Change in fair value recorded in other income (expense), net		(156,163	)
Fair value as of December 31, 2012		685,213
Fair value of warrants issued		-
Change in fair value recorded in other income (expense), net		(61,541	)
Fair value as of December 31, 2013	$	623,672

Fair Value Inputs, Liabilities, Quantitative Information [Table Text Block]

	Fair Value as of		Valuation	Unobservable	Range
	December 31, 2013		Techniques	Input	(Weighted-Average)
Preferred stock warrant liabilities	$	623,672	Black-Scholes	Preferred series
			option pricing	prices	$0.04	-	$0.44	(-	$0.06	-)
			model
				Volatility	70.62%	-	84.23%	(-	76%	-)

	Fair Value as of				Range
	December 31, 2012		Valuation	Unobservable	(Weighted-Average)
Preferred stock	$	685,213	Black-Scholes	Preferred series
warrant liabilities			option pricing model	prices	$0.04	-	0.44	(-	$0.06	-)
				Volatility	74.2%	-	91.6%	(-	83%	-)

	Fair Value as of				Range
	December 31, 2013		Valuation	Unobservable	(Weighted-Average)
Preferred stock	$	623,672	Black-Scholes	Preferred series
warrant liabilities			option pricing model	prices	$0.04	-	0.44	(-	$0.06	-)
				Volatility	70.6%	-	84.2%	(-	76%	-)

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Note 3 - Fair Value Measurements (Details) - Summary of the Valuation Techniques for Fair Value of Preferred Stock Warrant Liabilities (USD $)	12 Months Ended							12 Months Ended
	Dec. 31, 2013	Sep. 23, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 30, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013 Preferred Stock Warrant Liabilities [Member] Minimum [Member]	Dec. 31, 2012 Preferred Stock Warrant Liabilities [Member] Minimum [Member]	Dec. 31, 2013 Preferred Stock Warrant Liabilities [Member] Maximum [Member]	Dec. 31, 2012 Preferred Stock Warrant Liabilities [Member] Maximum [Member]	Dec. 31, 2013 Preferred Stock Warrant Liabilities [Member]	Dec. 31, 2012 Preferred Stock Warrant Liabilities [Member]	Dec. 31, 2013 Minimum [Member]	Dec. 31, 2013 Maximum [Member]
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Preferred stock warrant liabilities	$ 623,672		$ 580,187	$ 602,188	$ 623,672	$ 685,213	$ 646,844					$ 623,672	$ 685,213
	$ 0.06	$ 0.53						$ 0.04	$ 0.04	$ 0.44	$ 0.44	$ 0.06	$ 0.06	$ 0.04	$ 0.44
	76.00%							70.60%	74.20%	84.20%	91.60%	76.00%	83.00%	70.62%	84.23%

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Note 5 - Note Payable (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Debt Disclosure [Abstract]

Schedule of Debt [Table Text Block]

Year Ending December 31, 2014	$	1,618,091
		1,618,091
Less: Amount representing interest		(146,292	)
Present value of obligations		1,471,799
Less: Unamortized debt discount		-
		1,471,799
Less: Notes payable, current portion		1,471,799
Notes payable, noncurrent portion	$	-

Year ending December 31, 2014	$	1,597,196
Less: Amount representing interest		(125,398	)
Present value of obligations		1,471,798
Less: Unamortized debt discount		(8,554	)
		1,463,244
Less: Notes payable, current portion		1,463,244
Notes payable, noncurrent portion	$	-

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Note 11 - Income Taxes (Details) - Deferred Tax Assets and Liabilities (USD $)	Dec. 31, 2013	Dec. 31, 2012
Deferred Tax Assets and Liabilities [Abstract]
Net operating loss carryforwards	$ 4,203,000	$ 3,951,000
Research and development credits	162,000	162,000
Start-up expenses capitalized	7,156,000	5,726,000
Accruals and reserves	99,000	150,000
Property and equipment	(11,000)	(22,000)
	11,609,000	9,967,000
Less: Valuation allowance	(11,609,000)	(9,967,000)
	$ 0	$ 0

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Note 2 - Summary of Significant Accounting Policies

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

2. Summary of Significant Accounting Policies

Financial Statement Presentation

The condensed consolidated financial statements include the accounts of the Company and our wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with US GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and the related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. In addition, any change in these estimates or their related assumptions could have an adverse effect on our operating results.

Reclassifications

Certain prior year financial statement amounts have been reclassified to conform to the current year’s presentation. These reclassifications had no impact on previously reported total assets, stockholders’ deficit or net loss.

Revenue Recognition

The Company recognizes revenue from the sale of its product, the Viveve® System, and single-use treatment tips. Revenue is recognized upon delivery, provided that persuasive evidence of an arrangement exists, the price is fixed or determinable and collection of the resulting receivable is reasonably assured. Sales of Viveve’s products are subject to regulatory requirements that vary from country to country. The Company has regulatory clearance outside the U.S. and currently sells the Viveve System in Canada, Hong Kong and Japan.

The Company does not provide its customers with a contractual right of return.

Recently Issued and Adopted Accounting Standards

In May 2014, as part of its ongoing efforts to assist in the convergence of US GAAP and International Financial Reporting Standards (“IFRS”), the Financial Accounting Standards Board (“FASB”)  issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606).” The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The ASU provides alternative methods of initial adoption and is effective for annual and interim periods beginning after December 15, 2016. We are currently evaluating the impact that this standard will have on our condensed consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12, “Compensation — Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved After a Requisite Service Period” (“ASU 2014-12”). Companies commonly issue share-based payment awards that require a specific performance target to be achieved in order for employees to become eligible to vest in the awards. ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period should be treated as a performance condition. The performance target should not be reflected in estimating the grant date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved. ASU 2014-12 will be effective for the Company’s fiscal years beginning fiscal 2016 and interim reporting periods within that year, using either the retrospective or prospective transition method. Early adoption is permitted. We are currently evaluating the effect of the adoption of this guidance on our condensed consolidated financial statements.

In June 2014, the FASB issued ASU 2014-10,  “Development Stage Entities (Topic 915):  Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in topic 810, Consolidation” (“ASU 2014-10”). ASU 2014-10 removes the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. ASU 2014-10 also eliminates the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. The amendments in ASU 2014-10 will be effective retrospectively except for the clarification to Topic 275, which shall be applied prospectively for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued. We elected to early adopt the provisions of ASU 2014-10 in the second quarter of 2014.

In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 310-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”), to provide guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Since ASU 2014-15 only impacts financial statement disclosure requirements regarding whether there is  substantial doubt about an entity’s ability to continue as a going concern, we do not expect its adoption to have an impact on our ccondensed onsolidated financial statements.

Concentration of Credit Risk and Other Risks and Uncertainties

To achieve profitable operations, the Company must successfully develop, manufacture, and market its products. There can be no assurance that any such products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products will be successfully marketed. These factors could have a material adverse effect upon the Company’s financial results, financial position, and future cash flows.

The Company’s future products may require approval from the U.S. Food and Drug Administration or other international regulatory agencies prior to commencing commercial sales. There can be no assurance that the Company’s future products will receive any of these required approvals. If the Company was denied such approvals or such approvals were delayed, it would have a material adverse impact on the Company’s financial results, financial position and future cash flows.

The Company is subject to risks common to companies in the medical device industry including, but not limited to, new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, uncertainty of market acceptance of products, product liability, and the need to obtain additional financing. The Company’s ultimate success is dependent upon its ability to raise additional capital and to successfully develop and market its products.

During the nine months ended September 30, 2014, three customers accounted for 94% of the Company’s revenue.

During the nine months ended September 30, 2013, one customer accounted for 100% of the Company’s revenue.

During the three months ended September 30, 2014, two customers accounted for 79% of the Company’s revenue.

During the three months ended September 30, 2013, one customer accounted for 100% of the Company’s revenue.

Inventory

Inventory is stated at the lower of cost or market, cost being determined on an actual cost basis on a first-in, first-out basis and market being determined as the lower of replacement cost or net realizable value.

Product Warranty

The Company’s products are generally subject to a one year warranty, which provides for the repair, rework or replacement of products (at its option) that fail to perform within stated specification. The Company has assessed the historical claims and, to date, product warranty claims have not been significant. The Company will continue to assess if there should be a warranty accrual.

Comprehensive Loss

Comprehensive loss represents the changes in equity of an enterprise, except those resulting from stockholder transactions. Accordingly, comprehensive loss may include certain changes in equity that are excluded from net loss. For the three and nine months ended September 31, 2014 and 2013, the Company’s comprehensive loss is the same as its net loss. There were no components of comprehensive loss for any of the periods presented.

Net Loss per Share Attributable to Common Stockholders

The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding for the period. The diluted net loss per share attributable to common stockholders is computed by giving effect to all potentially dilutive common stock equivalents outstanding for the period. For purposes of this calculation, options and warrants to purchase common stock are considered common stock equivalents. For periods in which the Company has reported net losses, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Potential common shares will always be anti-dilutive for periods in which the Company has reported a net loss. Diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders for the three and nine months ended September 30, 2014 and 2013.

For the three and nine months ended September 30, 2014 and 2013, the following weighted average common stock equivalent shares were excluded from the calculation of net loss per share because the inclusion would be anti-dilutive.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Stock options to purchase common stock		476,671		409,488		445,804		491,609
Warrants to purchase common stock		72,322		-		24,107		-
		548,993		409,488		469,911		491,609

2. Summary of Significant Accounting Policies

Basis of Presentation and Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less, at the time of purchase, to be cash equivalents. The Company’s cash and cash equivalents are deposited in demand and money market accounts at one financial institution. Deposits in this institution may, from time to time, exceed the federally insured amounts.

Concentration of Credit Risk and Other Risks and Uncertainties

To achieve profitable operations, the Company must successfully develop, manufacture, and market its products. There can be no assurance that any such products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products will be successfully marketed. These factors could have a material adverse effect upon the Company’s financial results, financial position, and future cash flows.

The Company’s future products may require approval from the U.S. Food and Drug Administration or other international regulatory agencies prior to commencing commercial sales. There can be no assurance that the Company’s future products will receive any of these required approvals. If the Company was denied such approvals or such approvals were delayed, it would have a material adverse impact on the Company’s financial results, financial position and future cash flows.

The Company is subject to risks common to companies in the medical device industry including, but not limited to, new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, uncertainty of market acceptance of products, product liability, and the need to obtain additional financing. The Company’s ultimate success is dependent upon its ability to raise additional capital and to successfully develop and market its products.

During the years ended December 31, 2012 and 2013, three customers accounted for 100% of the Company’s revenue.

Inventory

Inventory is stated at the lower of cost or market. Cost is determined on a standard cost basis which approximates actual cost on a first-in, first-out method. Lower of cost or market is evaluated by considering obsolescence, excessive levels of inventory, deterioration and other factors. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolescence or impaired inventory. Excess and obsolete inventory is charged to cost of revenue and a new, lower-cost basis for that inventory is established and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

As part of the Company’s normal business, the Company generally utilizes various finished goods inventory as sales demos to facilitate the sale of its products to prospective customers. The Company is amortizing these demos over an estimated useful life of five years. The amortization of the demos is charged to general and administrative expense and the demos are included in the medical equipment line of the property and equipment balance on the balance sheet as of December 31, 2013.

Fair Value of Financial Instruments

Carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, prepaid and other current assets, accounts payable and accrued liabilities approximate fair value due to their short maturities. Based on borrowing rates currently available to the Company for loans with similar terms, the carrying value of the notes payable approximates fair value.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation of property and equipment is computed using the straight line method over their estimated useful lives of three to five years. Leasehold improvements are amortized on a straight-line basis over the lesser of their useful life or the life of the lease. Upon sale or retirement of assets, the cost and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss is reflected in operations. Maintenance and repairs are charged to operations as incurred.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. When such an event occurs, management determines whether there has been an impairment by comparing the anticipated undiscounted future net cash flows to the related asset’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. The Company has not identified any such impairment losses to date.

Preferred Stock Warrants

Freestanding warrants and other similar instruments related to shares that are redeemable are classified as liabilities at fair value on the balance sheets. The warrants are subject to re-measurement at each balance sheet date and any change in fair value is recognized as a component of other income (expense), net on the statements of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the preferred stock warrants.

Income Taxes

The Company accounts for income taxes using the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established to reduce deferred tax assets when management estimates, based on available objective evidence, that it is more-likely-than-not that the benefit will not be realized for the deferred tax assets.

In September of 2013, the U.S. Department of the Treasury issued final regulations on the deduction and capitalization of expenditures related to tangible property for income tax purposes. These regulations apply to the Company’s fiscal year beginning on January 1, 2014. The Company is currently assessing the financial statement impact of these regulations, but does not expect that the new regulations will have a material impact on the effective rate.

Revenue

The Company recognizes revenue from the sale of its product, the Viveve System ®, which has received the European CE (Conformité Européenne) approval. Revenue is recognized upon delivery, provided that persuasive evidence of an arrangement exists, the price is fixed or determinable and collection of the resulting receivable is reasonably assured.

Revenue, continued

The Company does not provide its customers with a contractual right of return.

Shipping and Handling Costs

The Company includes amounts billed for shipping and handling in revenues and shipping and handling costs in cost of revenue.

Product Warranty

The Company’s products are generally subject to a one year warranty, which provides for the repair, rework or replacement of products (at its option) that fail to perform within stated specification. The Company has assessed the historical claims and assumes that there is no outstanding products to be replaced that are subject to claims as of December 31, 2013. The Company will continue to assess if there should be a warranty accrual going forward.

Advertising Costs

Advertising costs are charged to general and administrative expenses as incurred. Advertising costs for the years ended December 31, 2012 and 2013 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2013 were $264,834, $7,812, and $918,013, respectively.

Research and Development

Research and development costs are charged to operations as incurred. Research and development costs include, but are not limited to, payroll and personnel expenses, prototype materials, laboratory supplies, consulting costs, and allocated overhead, including rent, equipment depreciation, and utilities.

Stock-Based Compensation

The Company accounts for stock-based employee compensation arrangements which requires the recognition of compensation expense, using a fair-value based method for costs related to all employee share-based payments, including stock options. The Company estimates the fair value of share-based payment awards on the date of grant using an option-pricing model. All option grants have been expensed on a straight-line basis over their vesting period. Equity instruments issued to nonemployees are recorded at their fair value on the measurement date and are subject to periodic adjustment as the underlying equity instruments vest.

Comprehensive Loss

Comprehensive loss is the changes in equity of an enterprise, except those resulting from stockholder transactions. Accordingly, comprehensive loss may include certain changes in equity that are excluded from net loss. For the years ended December 31, 2012 and 2013 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31 2013, the Company’s comprehensive loss is the same as its net loss. There were no components of comprehensive loss for any of the periods presented.

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Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) (USD $)	Sep. 30, 2014	Dec. 31, 2013	Dec. 31, 2012
Preferred Stock, par value (in Dollars per share)	$ 0	$ 0
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in Dollars per share)	$ 0	$ 0.001	$ 0.001
Common stock, shares authorized		612,000,000	612,000,000
Common stock, shares issued	18,016,662	6,555,305	6,555,305
Common stock, shares outstanding	18,016,662	6,555,305	6,555,305
Series A Preferred Stock [Member]
Preferred Stock, par value (in Dollars per share)	$ 0.001	$ 0.001	$ 0.001
Preferred stock, shares authorized	24,543,626	24,543,626	24,543,626
Preferred stock, shares issued	0	23,863,302	23,863,302
Preferred stock, shares outstanding	0	23,863,302	23,863,302
Preferred stock, liquidation value (in Dollars)		$ 14,556,614	$ 14,556,614
Series B Preferred Stock [Member]
Preferred Stock, par value (in Dollars per share)	$ 0.001	$ 0.001	$ 0.001
Preferred stock, shares authorized	227,000,000	227,000,000	227,000,000
Preferred stock, shares issued	0	171,199,348	171,199,348
Preferred stock, shares outstanding	0	171,199,348	171,199,348
Preferred stock, liquidation value (in Dollars)		$ 8,559,967	$ 8,559,967

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Note 12 - Related Party Transactions

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

12. Related Party Transactions

In June 2006, the Company entered into a Development and Manufacturing Agreement with Stellartech Research Corporation (the “Agreement”). The Agreement was amended on October 4, 2007. Under the Agreement, the Company agreed to purchase 300 units of generators manufactured by Stellartech. In conjunction with the Agreement, Stellartech purchased 300,000 shares of common stock at par value. These shares are subject to a right of repurchase by the Company, which lapse over a four-year period. As of December 31, 2012, none of the shares of common stock were subject to repurchase. Under the Agreement, the Company paid Stellartech $345,472 and $33,000 for goods and services in the nine months ended September 30, 2014 and 2013, respectively.

12. Related Party Transactions

From March 2006 through March 2008, the Company leased office space from the Company’s then Chief Executive Officer. Rent payments made to the Chief Executive Officer for the year ended December 31, 2008 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2008 were $12,000 and $72,391, respectively. There were no rental payments made to the Chief Executive Officer after March 2008.

In June 2006, the Company entered into a Development and Manufacturing Agreement with Stellartech Research Corporation (the “Agreement”). The Agreement was amended on October 4, 2007. Under the Agreement, Viveve agreed to purchase 300 units of generators manufactured by Stellartech. In conjunction with the Agreement, Stellartech purchased 300,000 shares of common stock at par value. These shares were subject to a right of repurchase by the Company, which lapsed over a four-year period. As of December 31, 2012, none of the shares of common stock were subject to repurchase. Under the Agreement, the Company has paid Stellartech $325,936, $33,000 and $6,920,619 for goods and services in the years ended December 31, 2012 and 2013 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2013, respectively.

In April 2012, the Viveve-Parmer Arbitration (a dispute between the Company and its original Chief Executive Officer) was settled and resulted in the award and judgment in favor of Dr. Parmer. In accordance with the Settlement Agreement and General Release, the Company paid Dr. Parmer $1,000,000, less applicable withholdings (payment executed April 20, 2012), issued a subordinated unsecured note of $150,000 payable in three equal installments on March 31, 2013, June 30, 2013 and September 30, 2013, all of which were paid, and issued 754,635 shares of restricted common stock. In addition, if the Company closes an equity financing, the Company shall issue Dr. Parmer a number of shares equal to $150,000 divided by the price per share.

In June 2012, the Company entered into a Supply and Purchase Agreement with Donna Bella International, Limited (“Donna Bella”). Under the agreement, Donna Bella will have exclusivity to purchase the Company’s products in Hong Kong, provided Donna Bella purchases $1,000,000 of the Company’s Series B. In addition, Donna Bella will have exclusivity to purchase the Company’s products in China, provided that (a) Donna Bella purchases $1,000,000 of the Company’s Series B and (b) the Company obtains registration with the State Food and Drug Administration (“SFDA”) for its products with the assistance of Donna Bella. The parties agree to negotiate minimum purchases for the China market upon receipt of SFDA clearance. Donna Bella agrees to designate a subsidiary of Donna Bella in China with legal independent legal standing, to assist the Company in obtaining the registration with SFDA at Donna Bella’s subsidiary’s cost. Such designated subsidiary of Donna Bella shall start the registration process on behalf of the Company immediately after the signing of this agreement, subject to the request of and approval by the Company. In July 2012, Donna Bella purchased $1,000,000 of the Company’s Series B.

On March 14, 2013, the Company entered into a Separation and Release Agreement with a former executive officer (the “Separation Agreement”). In accordance with the terms and conditions of the Separation Agreement, the employee resigned as an officer of the Company and observer to the Company’s Board of Directors. The Company agreed to pay a severance payment equal to an aggregate of $271,346 (the “Severance Payment”) payable as follows: (1) $25,000 for each month for the ten months following April 15, 2013 (the “Separation Date”) and (2) $21,346 for the 11th month following the Separation Date. In the event that the employee engages in any activities that compete with the Company anytime during the eleven months following the Separation Date, the Company’s obligation to pay any further amounts in connection with the Severance Payment shall cease.

In addition to the above, an aggregate of 5,278,330 options of the 11,015,646 options previously granted to the former executive officer vested effective as of the Separation Date. The former executive officer agreed to release and discharge the Company from any and all claims, debts, obligations or liabilities, known and unknown, which relate to employment with the Company or the termination of that employment.

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Document And Entity Information	9 Months Ended
	Sep. 30, 2014	Nov. 21, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	VIVEVE MEDICAL, INC.
Document Type	S-1
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		12,347,121
Amendment Flag	false
Entity Central Index Key	0000879682
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3

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Note 13 - Subsequent Events

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Subsequent Events [Abstract]

Subsequent Events [Text Block]

13. Subsequent Events

On September 30, 2014, the Company entered into a Loan and Security Agreement pursuant to which we received a term loan in the amount of $5 million, which will be funded in 3 tranches. The first tranch of $2.5 million was provided to the Company on October 1, 2014. The proceeds from the first tranche were used to repay the existing loan with a financial institution which totaled $1,630,925. Before the second and the third tranches of the term loan will be funded, we must meet certain enrollment milestones and achieve certain positive results relating to our OUS Clinical Trials, among other things.

13. Subsequent Events

On January 31, 2014, the Company and lender agreed to further amend the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more on or before February 25, 2014 and consummation of an equity event by April 25, 2014. On February 25, 2014, a further extension to defer principal payments through March 31, 2014 was verbally agreed upon.

On March 5, 2014, the Company entered into a note purchase agreement in which it was authorized to issue and sell convertible promissory notes up to $500,000 in the aggregate of which $100,000 was issued on March 5, 2014. The notes accrue interest at 9% per annum and will convert into a subsequent equity financing, which the Company expects to complete by June 30, 2014.

The Company has evaluated all events occurring subsequent to December 31, 2013 through March 18, 2014, the date these accompanying financials were available to be issued and did not identify any additional material recognizable subsequent events.

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Condensed Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended		99 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013
Revenue	$ 17,180	$ 4,610	$ 64,475	$ 147,660	$ 152,270	$ 249,408	$ 421,678
Cost of revenue	14,724	1,493	40,075	110,528	182,329	118,272	321,433
Gross margin	2,456	3,117	24,400	37,132	(30,059)	131,136	100,245
Operating expenses:
Research and development	572,134	177,203	940,954	628,545	771,695	1,396,179	14,192,193
General and administrative	1,790,014	532,369	3,085,580	2,517,791	3,129,234	3,076,875	14,288,499
Total operating expenses	2,362,148	709,572	4,026,534	3,146,336	3,900,929	4,473,054	28,480,692
Loss from operations	(2,359,692)	(706,455)	(4,002,134)	(3,109,204)	(3,930,988)	(4,341,918)	(28,380,447)
Interest income	2	2	5	5	8	527	92,252
Interest expense	(152,296)	(156,727)	(486,582)	(334,380)	(447,340)	(743,359)	(2,208,688)
Other income (expense), net	7,827	(8,713)	51,312	11,230	61,541	124,731	591,958
Net loss	$ (2,504,159)	$ (871,893)	$ (4,437,399)	$ (3,432,349)	$ (4,316,779)	$ (4,960,019)	$ (29,904,925)
Net loss per share:
Basic and diluted (in Dollars per share)	$ (0.52)	$ (0.23)	$ (1.08)	$ (0.92)
Weighted average shares used in computing net loss per common share
Basic and diluted (in Shares)	4,829,300	3,743,282	4,109,266	3,743,282

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Note 7 - Commitments and Contingencies

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

7. Commitments and Contingencies

Operating Lease

In January 2012, the Company relocated and entered into a lease agreement for a new facility. The new lease commenced in March 2012 and will terminate in February 2015. Rent expense for the nine months ended September 30, 2014 and 2013 was $128,359 and $128,359, respectively.

As of September 30, 2014, future minimum payments under the lease are as follows:

Year Ending December 31,
2014	$	46,428
2015		30,952
Total minimum lease payments	$	77,380

Indemnification Agreements

The Company enters into standard indemnification arrangements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with performance of services within the scope of the agreement, breach of the agreement by the Company, or noncompliance of regulations or laws by the Company, in all cases provided the indemnified party has not breached the agreement and/or the loss is not attributable to the indemnified party’s negligence or willful malfeasance. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these arrangements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the estimated fair value of these agreements is minimal.

Contingencies

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

7. Commitments and Contingencies

Operating Lease

In January 2012, the Company relocated and entered into a lease agreement for a new facility. The new lease commenced in March 2012 and will terminate in February 2015. Rent expense for the years ended December 31, 2012 and 2013 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2013 was $166,398, $173,896, and $744,602, respectively.

At December 31, 2013, future minimum payments under the lease are as follows:

Year Ending December 31,
2014	$	184,002
2015		30,952
	$	214,954

Indemnification Agreements

The Company enters into standard indemnification arrangements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with performance of services within the scope of the agreement, breach of the agreement by the Company, or noncompliance of regulations or laws by the Company, in all cases provided the indemnified party has not breached the agreement and/or the loss is not attributable to the indemnified party’s negligence or willful malfeasance. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these arrangements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the estimated fair value of these agreements is minimal.

Contingencies

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

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Note 6 - Related Party Convertible Bridge Notes (Related Party Convertible Bridge Notes [Member])

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Related Party Convertible Bridge Notes [Member]

Note 6 - Related Party Convertible Bridge Notes [Line Items]

Long-term Debt [Text Block]

6. Related Party Convertible Bridge Notes

In November 2012, the Company issued $1,000,000 in convertible promissory notes to related parties. The notes accrue interest at 8% per annum and mature at the earlier of i) the date upon which the majority note holders demand repayment after May 15, 2013 or ii) the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000. As of September 30, 2014 and December 31, 2013, the outstanding principal balance was $0 and $1,000,000. Because the holders had the ability to demand repayment after May 15, 2013, the Company classified all of the outstanding debt balance and related accrued interest of $88,986 as a current liability as of December 31, 2013. In connection with the Merger, these convertible promissory notes were extinguished.

On February 13, 2013, the Company entered into a note purchase agreement (“2013 Note Purchase Agreement”) with related parties to which it was authorized to issue and sell convertible promissory notes up to $1,500,000 in the aggregate, of which $1,000,000 was issued. These notes were intended as bridge financing to a planned alternative public offering in the second quarter of 2013. The notes accrue interest at 8% per annum and mature at the earlier of the date upon which the majority note holders demand repayment after August 13, 2013 or the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000 excluding the conversion of these notes and the November 2012 notes. The notes convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which is defined as 80% of the purchase price in the qualified financing. If the Company does not execute a qualified financing, the holders may elect conversion of the notes prior to the maturity date of August 13, 2013. Under the elective conversion, the notes convert into the number of the next equity financing shares or shares of Series B convertible preferred stock that are equal to the principal and the unpaid accrued interest divided by the conversion price. The conversion price is defined as 80% of the price paid by the investors in the next equity financing series or $0.05, if the notes are converted into the Series B convertible preferred stock. In April 2013, the Company completed another closing of the 2013 Note Purchase Agreement for $500,000. On June 3, 2013, the Company entered into an amendment to the 2013 Note Purchase Agreement to increase the total amount of the convertible promissory notes up to $2,000,000 in the aggregate if issued before June 30, 2013. In June 2013, the Company completed another closing of the 2013 Note Purchase Agreement for $500,000. On August 7, 2013, the Company entered into an amendment to the 2013 Note Purchase Agreement to increase the total amount of the convertible promissory notes up to $2,500,000 in the aggregate if issued before August 28, 2013. In August 2013, the Company completed another closing of the 2013 Note Purchase Agreement for $500,000. As of September 30, 2014 and December 31, 2013, the outstanding principal balance was $0 and $2,500,000. Because the holders had the ability to demand repayment after August 13, 2013, the Company classified all of the outstanding debt balance and related accrued interest of $130,466 as a current liability as of December 31, 2013. In connection with the Merger, these convertible promissory notes were extinguished.

On September 27, 2013, the Company entered into a note purchase agreement (“September 2013 Note Purchase Agreement”) with related parties to which it was authorized to issue and sell convertible promissory notes up to $500,000 in the aggregate. These notes were intended as bridge financing to a planned APO in the third quarter of 2013. The notes accrue interest at 8% per annum and mature at the earlier of the date upon which the majority note holders demand repayment after March 31, 2014 or the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000 excluding the conversion of these notes, the November 2012 notes and the 2013 Note Purchase Agreement. The notes convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which is defined as 70% of the purchase price in the qualified financing. If the Company does not execute a qualified financing, the holders may elect conversion of the notes prior to the maturity date of March 31, 2014. Under the elective conversion, the notes convert into the number of the next equity financing shares or shares of Series B convertible preferred stock that are equal to the principal and the unpaid accrued interest divided by the conversion price. The conversion price is defined as 70% of the price paid by the investors in the next equity financing series or $0.05, if the notes are converted into the Series B convertible preferred stock. As of September 30, 2014 and December 31, 2013, the outstanding principal balance was $0 and $500,000. Because the holders had the ability to demand repayment after March 31, 2014, the Company classified all of the outstanding debt balance and related accrued interest of $10,411 as a current liability as of December 31, 2013. In connection with the Merger, these convertible promissory notes were extinguished.

On November 12, 2013, the Company entered into a note purchase agreement (“November 2013 Note Purchase Agreement”) with related parties to which it was authorized to issue and sell convertible promissory notes up to $500,000 in the aggregate. These notes were intended as bridge financing to a planned APO in the fourth quarter of 2013. The notes accrue interest at 8% per annum and mature at the earlier of the date upon which the majority note holders demand repayment after March 31, 2014 or the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000 excluding the conversion of these notes, the November 2012 notes and the 2013 Note Purchase Agreement. The notes convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which is defined as 70% of the purchase price in the qualified financing. If the Company does not execute a qualified financing, the holders may elect conversion of the notes prior to the maturity date of March 31, 2014. Under the elective conversion, the notes convert into the number of the next equity financing shares or shares of Series B convertible preferred stock that are equal to the principal and the unpaid accrued interest divided by the conversion price. The conversion price is defined as 70% of the price paid by the investors in the next equity financing series or $0.05, if the notes are converted into the Series B convertible preferred stock. As of September 30, 2014 and December 31, 2013, the outstanding principal balance was $0 and $500,000. Because the holders had the ability to demand repayment after March 31, 2014, the Company classified all of the outstanding debt balance and related accrued interest of $5,370 as a current liability as of December 31, 2013. In connection with the Merger, these convertible promissory notes were extinguished.

On December 27, 2013, the Company entered into a note purchase agreement (“December 2013 Note Purchase Agreement”) with related parties to which it was authorized to issue and sell convertible promissory notes up to $375,000 in the aggregate. These notes were intended as bridge financing to a planned APO in the first quarter of 2014. The notes accrue interest at 9% per annum and mature at the earlier of the date upon which the majority note holders demand repayment after March 31, 2014 or the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000 excluding the conversion of these notes, the November 2012 notes and the 2013 Note Purchase Agreement. The notes convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which is defined as 70% of the purchase price in the qualified financing. If the Company does not execute a qualified financing, the holders may elect conversion of the notes prior to the maturity date of March 31, 2014. Under the elective conversion, the notes convert into the number of the next equity financing shares or shares of Series B convertible preferred stock that are equal to the principal and the unpaid accrued interest divided by the conversion price. The conversion price is defined as 70% of the price paid by the investors in the next equity financing series or $0.05, if the notes are converted into the Series B convertible preferred stock. As of September 30, 2014 and December 31, 2013, the outstanding principal balance was $0 and $375,000. Because the holders had the ability to demand repayment after March 31, 2014, the Company classified all of the outstanding debt balance and related accrued interest of $370 as a current liability as of December 31, 2013. In connection with the Merger, these convertible promissory notes were extinguished.

On March 5, 2014, the Company entered into a note purchase agreement in which it was authorized to issue and sell up to $1,250,000 in aggregate principal amount of convertible promissory notes of which $200,000 was issued. In May 2014, the Company completed another sale of convertible promissory notes in the aggregate principal amount of $1,050,000. The notes accrued interest at 9% per annum and converted into common stock in connection with the private placement.

On July 7, 2014, the Company entered into a note purchase agreement in which it was authorized to issue convertible promissory notes up to $250,000 in the aggregate. The notes accrue interest at 9% per annum and converted into common stock in connection with the private placement.

Pursuant to the Company’s amendment to the note purchase agreement dated November 20, 2012, effective February 13, 2013, the above notes payable would be redeemable upon a change of control of the Company at an amount equal to 300% of the outstanding principal amount and accrued and unpaid interest on the notes as of the time of a change of control. A change of control will occur in the event the Company enters into a transaction where the holders of the voting securities no longer own a majority of the total outstanding voting securities once the transaction is completed or a disposition of substantially all assets occurs. The sale of stock for capital raising purposes or an alternative public offering involving a reverse merger into a public shell company for capital raising purposes is excluded from the Company’s definition of a change of control. The Company has determined that the value of this provision is not material and as such did not record a liability on the Company’s condensed consolidated financial statements as of December 31, 2013. All of these notes were extinguished as part of the Merger Agreement.

6. Related Party Convertible Bridge Notes

In May 2011 (“May 2011 note”), the Company issued a convertible promissory note in the amount of $1,000,000. The note bears an interest rate of 8% per annum. The May 2011 note was amended in June 2011 and September 2011 to issue another $1,000,000 on each amendment date, for an aggregate of $3,000,000. In conjunction with the notes, the Company issued a warrant to the investor to purchase Series B convertible preferred stock with a warrant coverage amount equal to 10% and 20% of the principal amount of the notes for the initial and subsequent closings, respectively. In April 2012, the principal and accrued interest of $3,188,494 on these notes were converted to 63,769,863 shares of Series B convertible preferred stock at a conversion price of $0.05 per share.

In November 2011 (“November 2011 note”), the Company issued a convertible promissory note for $250,000 in two closings during November 2011 and December 2011 for an aggregate of $500,000. The note bears an interest rate of 8%. In conjunction with the notes, the Company issued a warrant to investors to purchase Series B convertible preferred stock with a warrant coverage amount equal to 20% of the principal amount of the notes for each of the closings, respectively.

In January 2012 and March 2012, the Company amended the November 2011 notes to provide the sale and issuance of up to $500,000 of convertible promissory notes and warrants under the same terms as the original agreement. In three separate closings during January 2012, February 2012 and April 2012, convertible promissory notes totaling $1,000,000 were issued. In conjunction with the notes, the Company issued a warrant to investors to purchase Series B convertible preferred stock with a warrant coverage amount equal to 20% of the principal amount of the notes for each of the closings, respectively. The aggregate principal amount of the November 2011 notes including the January and March amendments was $1,500,000, prior to the conversion. In April, 2012, the principal and accrued interest of $1,521,474 on these notes were converted to 30,429,485 shares of Series B convertible preferred stock at a conversion price of $0.05 per share.

In April 2012, June 2012 and July 2012, the Company issued an aggregate of 171,199,348 shares of Series B convertible preferred stock at a purchase price of $0.05 per share, which included 94,199,348 shares being issued upon the conversion of principal and accrued interest of $4,709,968 on the May 2011 notes and November 2011 notes.

In November 2012, the Company issued $1,000,000 in convertible promissory notes to related parties. The notes accrue interest at 8% per annum and mature at the earlier of the date upon which the majority note holders demand repayment after May 15, 2013 or the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000. As of December 31, 2012 and 2013, the outstanding principal balance was $1,000,000. Because the holders have the ability to demand repayment after May 15, 2013, the Company has classified all of the outstanding debt balance and related accrued interest of $8,987 and $88,986 as a current liability as of December 31, 2012 and 2013, respectively.

On February 13, 2013, the Company entered into a note purchase agreement (“2013 Note Purchase Agreement”) with related parties to which it was authorized to issue and sell convertible promissory notes up to $1,500,000 in the aggregate, of which $1,000,000 was issued. These notes were intended as bridge financing to a planned alternative public offering (“APO”) in the second quarter of 2013. The notes accrue interest at 8% per annum and mature at the earlier of the date upon which the majority note holders demand repayment after August 13, 2013 or the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000 excluding the conversion of these notes and the November 2012 notes. The notes convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which is defined as 80% of the purchase price in the qualified financing. If the Company does not execute a qualified financing, the holders may elect conversion of the notes prior to the maturity date of August 13, 2013. Under the elective conversion, the notes convert into the number of the next equity financing shares or shares of Series B convertible preferred stock that are equal to the principal and the unpaid accrued interest divided by the conversion price. The conversion price is defined as 80% of the price paid by the investors in the next equity financing series or $0.05, if the notes are converted into the Series B convertible preferred stock. In April 2013, the Company completed another closing of the 2013 Note Purchase Agreement for $500,000. On June 3, 2013, the Company entered into an amendment to the 2013 Note Purchase Agreement to increase the total amount of the convertible promissory notes up to $2,000,000 in the aggregate if issued before June 30, 2013. In June 2013, the Company completed another closing of the 2013 Note Purchase Agreement for $500,000. On August 7, 2013, the Company entered into an amendment to the 2013 Note Purchase Agreement to increase the total amount of the convertible promissory notes up to $2,500,000 in the aggregate if issued before August 28, 2013. In August 2013, the Company completed another closing of the 2013 Note Purchase Agreement for $500,000. As of December 31, 2013, the outstanding principal balance was $2,500,000. Because the holders have the ability to demand repayment after August 13, 2013, the Company has classified all of the outstanding debt balance and related accrued interest of $130,466 as a current liability as of December 31, 2013.

On September 27, 2013, the Company entered into a note purchase agreement (“September 2013 Note Purchase Agreement”) with related parties to which it was authorized to issue and sell convertible promissory notes up to $500,000 in the aggregate. These notes were intended as bridge financing to a planned alternative public offering (“APO”) in the third quarter of 2013. The notes accrue interest at 8% per annum and mature at the earlier of the date upon which the majority note holders demand repayment after March 31, 2014 or the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000 excluding the conversion of these notes, the November 2012 notes and the 2013 Note Purchase Agreement. The notes convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which is defined as 70% of the purchase price in the qualified financing. If the Company does not execute a qualified financing, the holders may elect conversion of the notes prior to the maturity date of March 31, 2014. Under the elective conversion, the notes convert into the number of the next equity financing shares or shares of Series B convertible preferred stock that are equal to the principal and the unpaid accrued interest divided by the conversion price. The conversion price is defined as 70% of the price paid by the investors in the next equity financing series or $0.05, if the notes are converted into the Series B convertible preferred stock. As of December 31, 2013, the outstanding principal balance was $500,000. Because the holders have the ability to demand repayment after March 31, 2014, the Company has classified all of the outstanding debt balance and related accrued interest of $10,411 as a current liability as of December 31, 2013.

On November 12, 2013, the Company entered into a note purchase agreement (“November 2013 Note Purchase Agreement”) with related parties to which it was authorized to issue and sell convertible promissory notes up to $500,000 in the aggregate. These notes were intended as bridge financing to a planned alternative public offering (“APO”) in the forth quarter of 2013. The notes accrue interest at 8% per annum and mature at the earlier of the date upon which the majority note holders demand repayment after March 31, 2014 or the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000 excluding the conversion of these notes, the November 2012 notes and the 2013 Note Purchase Agreement. The notes convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which is defined as 70% of the purchase price in the qualified financing. If the Company does not execute a qualified financing, the holders may elect conversion of the notes prior to the maturity date of March 31, 2014. Under the elective conversion, the notes convert into the number of the next equity financing shares or shares of Series B convertible preferred stock that are equal to the principal and the unpaid accrued interest divided by the conversion price. The conversion price is defined as 70% of the price paid by the investors in the next equity financing series or $0.05, if the notes are converted into the Series B convertible preferred stock. As of December 31, 2013, the outstanding principal balance was $500,000. Because the holders have the ability to demand repayment after March 31, 2014, the Company has classified all of the outstanding debt balance and related accrued interest of $5,370 as a current liability as of December 31, 2013.

On December 27, 2013, the Company entered into a note purchase agreement (“December 2013 Note Purchase Agreement”) with related parties to which it was authorized to issue and sell convertible promissory notes up to $375,000 in the aggregate. These notes were intended as bridge financing to a planned alternative public offering (“APO”) in the first quarter of 2014. The notes accrue interest at 9% per annum and mature at the earlier of the date upon which the majority note holders demand repayment after March 31, 2014 or the date of the closing of a qualified financing in which the Company issues common or preferred stock for gross proceeds of not less than $5,000,000 excluding the conversion of these notes, the November 2012 notes and the 2013 Note Purchase Agreement. The notes convert into the number of shares equal to the principal and unpaid accrued interest divided by the conversion price, which is defined as 70% of the purchase price in the qualified financing. If the Company does not execute a qualified financing, the holders may elect conversion of the notes prior to the maturity date of March 31, 2014. Under the elective conversion, the notes convert into the number of the next equity financing shares or shares of Series B convertible preferred stock that are equal to the principal and the unpaid accrued interest divided by the conversion price. The conversion price is defined as 70% of the price paid by the investors in the next equity financing series or $0.05, if the notes are converted into the Series B convertible preferred stock. As of December 31, 2013, the outstanding principal balance was $375,000. Because the holders have the ability to demand repayment after March 31, 2014, the Company has classified all of the outstanding debt balance and related accrued interest of $370 as a current liability as of December 31, 2013.

Pursuant to the Company’s amendment to the note purchase agreement dated November 20, 2012, effective February 13, 2013, the above notes payable would be redeemable upon a change of control of the Company at an amount equal to 300% of the outstanding principal amount and accrued and unpaid interest on the notes as of the time of a change of control. A change of control will occur in the event the Company enters into a transaction where the holders of the voting securities no longer own a majority of the total outstanding voting securities once the transaction is completed or a disposition of substantially all assets occurs. The sale of stock for capital raising purposes or an alternative public offering involving a reverse merger into a public shell company for capital raising purposes is excluded from the Company’s definition of a change of control. The Company has determined that the value of this provision is not material and as such has not recorded a liability on the Company’s financial statements as of December 31, 2012 and 2013.

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Note 4 - Accrued Liabilities (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities [Table Text Block]

	September 30,		December 31,
	2014		2013
Accrued interest	$	13,792	$	235,603
Accrued professional fees		125,671		15,000
Accrued loan balloon payment		85,000		76,472
Accrued vacation		73,809		81,499
Accrued loan restructuring fees		47,500		27,288
Accrued severence pay		-		58,846
Other accruals		41,766		21,444
Total accrued liabilities	$	387,538	$	516,152

	2012		2013
Accrued settlement related costs	$	263,560	$	-
Accrued interest		8,987		312,075
Accrued severence pay		-		58,846
Accrued vacation		54,153		81,499
Accrued loan restructuring fees		-		27,288
Deferred rent		18,034		15,284
Other accruals		910		21,160
Total accrued liabilities	$	345,644	$	516,152

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Note 4 - Balance Sheet Components

12 Months Ended

Dec. 31, 2013

Disclosure Text Block Supplement [Abstract]

Supplemental Balance Sheet Disclosures [Text Block]

4. Balance Sheet Components

Property and Equipment, Net

	2012			2013
Medical equipment	$	215,639		$	276,443
Computer equipment		30,871			32,143
Furniture and fixtures		13,293			13,293
		259,803			321,879
Less: Accumulated depreciation and amortization		(131,176	)		(194,355	)
Net property and equipment	$	128,627		$	127,524

Depreciation and amortization expense for the years ended December 31, 2012 and 2013 and for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013 was $57,173, $66,120 and $239,475, respectively.

Accrued Liabilities

	2012		2013
Accrued settlement related costs	$	263,560	$	-
Accrued interest		8,987		312,075
Accrued severence pay		-		58,846
Accrued vacation		54,153		81,499
Accrued loan restructuring fees		-		27,288
Deferred rent		18,034		15,284
Other accruals		910		21,160
Total accrued liabilities	$	345,644	$	516,152

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Note 10 - Summary of Stock Options

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

10. Summary of Stock Options

Stock Option Plans

The Company has issued equity awards in the form of stock options from three employee benefit plans. The plans include the PLC 2005 Stock Incentive Plan (the “2005 Plan”), the Viveve Amended and Restated 2006 Stock Plan (the “2006 Plan”) and the PLC 2013 Stock Option and Incentive Plan (the “2013 Plan”).

The 2005 Plan was adopted by PLC's Board of Directors and approved by its stockholders. 22,095 shares of common stock remain reserved for issuance under the 2005 Plan. The Company does not intend to grant further awards from the 2005 Plan, however, it will continue to administer the 2005 Plan until all outstanding awards are exercised, expire, terminate or are forfeited. There are currently outstanding stock option awards issued from the 2005 Plan covering a total of 22,095 shares of the Company’s common stock. The weighted average exercise price of the outstanding stock options is $12.83 per share and the weighted average remaining contractual term is 8.80 years.

The 2006 Plan was adopted by the Board of Directors of Viveve and was terminated in conjunction with the Merger. Outstanding stock option awards have been assumed by the Company and will continue to be administered in accordance with the terms of the 2006 Plan until such awards are exercised, expire, terminate or are forfeited. There are currently outstanding stock option awards issued from the 2006 Plan covering a total of 324,820 shares of the Company’s common stock and no shares available for future awards. The weighted average exercise price of the outstanding stock options is $1.55 per share and the weighted average remaining contractual term is 8.06 years. Additionally, prior to the Merger, the Board of Directors voted to accelerate the vesting of all unvested options that were outstanding as of the date of the Merger such that all options would be immediately vested and exercisable by the holders. Furthermore, at the Merger, outstanding options to purchase shares of Viveve, Inc. common stock issued from the 2006 Plan were converted into options to purchase shares of the Company’s Common Stock (rounded down to the nearest whole share). The number of shares of the Company’s common stock into which the 2006 Plan options were converted was determined by multiplying the number of shares covered by each 2006 Plan option by the exchange ratio of 0.0080497. The exercise price of each 2006 Plan option was determined by dividing the exercise price of each 2006 Plan option immediately prior to the Merger by the exchange ratio of 0.0080497 (rounded up to the nearest cent).

The 2013 Plan was also adopted by PLC's Board of Directors and approved by its stockholders. The 2013 Plan is administered by the Compensation Committee of the Company’s Board of Directors (the “Administrator”). Under the 2013 Plan, the Company may grant to eligible participants awards of equity which may take the form of stock options (both incentive stock options and non-qualified stock options), stock appreciation rights, restricted, deferred or unrestricted stock awards, performance based awards or dividend equivalent rights. Awards may be granted to officers, employees, non-employee Directors (as defined in the 2013 Plan) and other key persons (including consultants and prospective employees). The term of any stock option award may not exceed 10 years and may be subject to vesting conditions, as determined by the Administrator. Options granted generally vest over four years. Incentive stock options may be granted only to employees of the Company or any subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f) of the Internal Revenue Code. The exercise price of any stock option award cannot be less than the fair market value of the Company’s common stock, provided, however, that an incentive stock option granted to an employee who owns more than 10% of the Company’s outstanding voting power must have an exercise price of no less than 110% of the fair market value of the Company’s common stock and a term that does not exceed five years. There are currently outstanding stock option awards issued from the 2013 Plan covering a total of 1,947,619 shares of the Company’s common stock and there remain reserved for future awards 839,148 shares of the Company’s common stock. The weighted average exercise price of the outstanding stock options is $0.80 per share. Concurrent with the Merger, the stockholders approved an amendment to the 2013 Plan to increase the number of shares reserved under the 2013 Plan from 113,826 to 3,111,587.

Activity under the 2005 Plan, the 2006 Plan and the 2013 Plan is as follows:

	Outstanding Options
						Weighted-
				Weighted-		Average
	Number			Average		Remaining
	of			Exercise		Contractual
	Shares			Price		Term (years)
Options outstanding as of December 31, 2013		363,413		$	2.94		8.80
Options granted		1,901,476		$	0.60
Options assumed from PLC		68,238		$	10.24
Options canceled		(38,593	)	$	1.75
Options outstanding as of September 30, 2014		2,294,534		$	1.02		9.67

As of September 30, 2014, the Company had 839,148 shares available for grant.

The options outstanding and exercisable as of September 30, 2014 are as follows:

			Options Outstanding						Options Exercisable
							Weighted-
			Number		Weighted-		Average		Number		Weighted-
			Outstanding		Average		Remaining		Exercisable		Average
Range of			as of		Exercise		Contractual		as of		Exercise
Exercise Prices			September 30, 2014		Price		Term (Years)		September 30, 2014		Price
	$0.12			320	$	0.12		2.21		320	$	0.12
	$0.60			1,901,476	$	0.60		10.00		20,000	$	0.60
	$1.24			314,036	$	1.24		8.15		314,036	$	1.24
$7.00	-	$9.00		59,372	$	8.63		8.28		59,372	$	8.63
$12.00	-	$18.63		19,081	$	15.29		6.79		19,081	$	15.29
	$37.00			250	$	37.00		3.72		250	$	37.00
				2,294,535	$	1.02		9.67		413,059	$	2.94

Stock-Based Compensation

During the three and nine months ended September 30, 2014, the Company granted stock options to employees to purchase 1,901,476 shares of common stock with a weighted-average grant date fair value of $0.32 per share. Stock-based compensation expense recognized during the three months ended September 30, 2014 and 2013 was $113,345 and $16,284 respectively. Stock-based compensation expense recognized during the nine months ended September 30, 2014 and 2013 was $143,643 and $66,001, respectively. As of September 30, 2014, the total unrecognized compensation cost in connection with unvested stock options was approximately $567,000. These costs are expected to be recognized over a period of approximately 3.26 years. The aggregate intrinsic value of options outstanding as of September 30, 2014 was approximately $1.7 million. There were no options exercised during the nine months ended September 30, 2014 and 2013.

The Company estimated the fair value of stock options using the Black-Scholes option pricing model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period of the awards. The fair value of employee stock options granted was estimated using the following assumptions:

	Nine Months Ended
	September 30,
	2014		2013
Expected term (in years)		5		5
Average volatility		61%		67%
Risk-free interest rate		1.80%		0.87%
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 Company specific events that affected volatility in a prior period. The expected term of employee 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 and nine months ended September 30, 2014 and 2013:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Research and development	$	101	$	976	$	667	$	(7,016	)
General and administrative		113,245		15,308		142,976		73,017
Total	$	113,346	$	16,284	$	143,643	$	66,001

10. Stock Option Plan

In February 2006, the Company adopted the 2006 Stock Option Plan (the “Plan”) under which the Board of Directors may issue incentive and nonqualified stock options to employees, directors, and consultants. The Board of Directors has the authority to determine to whom options will be granted, the number of options, the term and the exercise price. If an individual owns stock representing more than 10% of the outstanding shares, the price of each option shall be at least 110% of the fair market value, as determined by the Board of Directors. The exercise price of an incentive stock option and a nonqualified stock option shall not be less than 100% and 85%, respectively, of the fair market value of the common stock on the date of grant. All options granted have a term of ten years, other than options granted to individuals holding more than 10% of the total outstanding shares which have a term of five years. Options granted generally vest over four years.

Activity under the Plan is as follows:

				Outstanding Options
									Weighted-
	Shares						Weighted-		Average
	Available			Number			Average		Remaining
	for			of			Exercise		Contractual
	Grant			Shares			Price		Term (years)
Shares reserved at plan inception		1,000,000			-		$	-
Options granted		(51,500	)		51,500			0.001
Balances as of December 31, 2006		948,500			51,500			0.001		9.96
Additional shares reserved		2,000,000			-			-
Options granted		(867,000	)		867,000			0.06
Options forfeited		5,000			(5,000	)		0.001
Balances as of December 31, 2007		2,086,500			913,500			0.06		9.82
Options granted		(72,500	)		72,500			0.06
Balances as of December 31, 2008		2,014,000			986,000			0.06		8.87
Options granted		(1,892,029	)		1,892,029			0.06
Options exercised		-			(322,395	)		0.06
Options forfeited		377,605			(377,605	)		0.06
Balances as of December 31, 2009		499,576			2,178,029			0.06		9.00
Additional shares reserved		461,957			-			-
Options granted		(771,412	)		771,412			0.05
Options exercised		-			(173,455	)		0.001
Options forfeited		12,500			(12,500	)		0.06
Balances as of December 31, 2010		202,621			2,763,486			0.06		8.40
Additional shares reserved		500,000			-			-
Options granted		(345,000	)		345,000			0.12
Options exercised		-			(9,000	)		0.001
Options forfeited		139,000			(139,000	)		0.06
Repurchase of restricted stock options		5,250			-
Balances as of December 31, 2011		501,871			2,960,486			0.07		7.70
Additional shares reserved		80,000,000			-			-
Options granted		(43,694,521	)		43,694,521			0.01
Options exercised		-			(1,866,903	)		0.07
Balances as of December 31, 2012		36,807,350			44,788,104			0.01		9.74
Options granted		(11,873,890	)		11,873,890			0.01
Options cancelled		11,515,876			(11,515,876	)		0.01
Balances as of December 31, 2013		36,449,336			45,146,118		$	0.01		8.80
Options vested and expected to vest as of December 31, 2013					43,338,910		$	0.01		8.80
Options vested as of December 31, 2013					15,025,985		$	0.02		8.60

The options outstanding and exercisable as of December 31, 2013 are as follows:

		Options Outstanding				Options Vested
				Weighted-
				Average				Weighted-
				Remaining				Average
Exercise		Number		Contractual		Number		Exercise
Price		Outstanding		Life (Years)		of Options		Price
$	0.001		40,000		2.95		40,000	$	0.001
	0.06		980,250		5.68		921,104		0.06
	0.15		514,833		7.94		447,055		0.15
	0.01		43,611,035		8.89		13,617,826		0.01
			45,146,118		8.80		15,025,985	$	0.02

Stock-Based Compensation Associated with Awards to Employees

During the years ended December 31, 2012 and 2013, the Company granted stock options to employees to purchase 38,996,262 and 11,788,890 shares of common stock with a weighted-average grant date fair value of $0.03262 and $0.00559 per share, respectively. Stock-based compensation expense recognized during the years ended December 31, 2012 and 2013 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2013, includes compensation expense for stock-based awards granted to employees of $102,511, $94,021 and $282,032 respectively. As of December 31, 2013, there was total unrecognized compensation costs of $129,937 related to these stock options. These costs are expected to be recognized over a period of approximately 1.74 years. The total fair value of employee options vested during the years ended December 31, 2012 and 2013 was $54,199 and $139,914, respectively. The aggregate intrinsic value of options outstanding and exercisable as of December 31, 2012 and 2013 was $2,322 and $322, respectively. The aggregate intrinsic value of options exercised during the years ended December 31, 2012 and 2013 was $0.

The Company estimated the fair value of stock options using the Black-Scholes option pricing model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period of the awards. The fair value of employee stock options granted was estimated using the following assumptions:

							Cumulative for the Period
							September 21, 2005
							(Date of Inception) to
	2012			2013			December 31, 2013
Expected term (in years)		5.00			5.00			5.00 - 6.25
Expected volatility		68	%		67	%		60% - 79	%
Risk-free interest rate		0.76% - 0.84	%		0.84	%		0.76% - 4.7	%
Dividend yield		0	%		0	%		0	%

Expected Term

The expected term of stock options represents the weighted-average period the stock options are expected to remain outstanding. The Company derived the expected term based on expected terms for similar entities, referred to as “guideline” companies, as the Company did not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. In evaluating similarity, the Company considered factors such as industry, stage of life cycle and size.

Volatility

Since the Company is a private entity with no historical data regarding the volatility of its common stock, the expected volatility used is based on volatility of similar entities, referred to as “guideline” companies. In evaluating similarity, the Company considered factors such as industry, stage of life cycle and size.

Risk-Free Interest Rate

The risk-free rate is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options.

Dividend Yield

The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future and, therefore, used an expected dividend yield of zero in the valuation model.

Forfeitures

The Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest. All stock-based payment awards are amortized on a straight-line basis over the requisite service periods of the awards, which are generally the vesting periods. If the Company’s actual forfeiture rate is materially different from its estimate, the stock-based compensation expense could be significantly different from what the Company has recorded in the current period.

Stock-Based Compensation for Nonemployees

During the years ended December 31, 2012 and 2013, the Company granted options to purchase 4,698,259 and 85,000 shares of common stock to nonemployees, respectively. Stock-based compensation expense related to stock options granted to nonemployees is recognized as the stock options are earned. The Company believes that the fair value of the stock options is more reliably measurable than the fair value of the services received. The stock-based compensation expense will fluctuate as the estimated fair value of the common stock fluctuates. During the years ended December 31, 2012 and 2013 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2013, the Company recorded $6,686, ($6,593) and $9,183, respectively, of stock-based compensation expense related to nonemployees. The fair value of nonemployee stock options granted was estimated using the following assumptions:

					Cumulative for the Period
					September 21, 2005
					(Date of Inception) to
	2012		2013		December 31, 2013
Contractual term (in years)		4 - 10		3 - 10		3 - 10
Expected volatility		68%		67%		60% - 79%
Risk-free interest rate		0.72% - 1.78%		0.78% - 3.04%		0.56% - 4.7%
Dividend yield		0%		0%		0%

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Note 5 - Note Payable (Details) - Summary of Note Payable (USD $)	Sep. 30, 2014	Dec. 31, 2013	Dec. 30, 2013	Dec. 31, 2012
Summary of Note Payable [Abstract]
Less: Amount representing interest	$ (146,292)	$ (125,398)
Present value of obligations	1,471,799	1,471,798
Less: Unamortized debt discount		(8,554)
	1,471,799	1,463,244
Less: Notes payable, current portion	$ 1,471,799	$ 1,463,244	$ 1,462,244	$ 1,581,390

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Note 8 - Common Stock

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

8. Common Stock

In connection with the Merger, all shares of Viveve Series A convertible preferred stock and Series B convertible preferred stock were converted to common stock and the Company exchanged shares of common stock with the former stockholders of Viveve. The total common shares issued for these transactions was 3,743,282 shares based on the exchange ratio of 0.0080497.

In connection with the proposed Merger, on May 9, 2014, Viveve issued to GBS Venture Partners Limited (“GBS”), a convertible debenture holder, a warrant to purchase shares of our common stock equal to approximately 5% of the outstanding shares of common stock on a post-Merger basis in consideration for the cancellation of convertible promissory notes in the aggregate principal amount of $1,750,000 and accrued interest of approximately $211,000 held by GBS. As part of the closing of the Merger, the Company issued 943,596 shares of common stock to GBS upon the automatic exercise of the warrant.

Concurrent with the Merger, the Company completed a separate private placement of 11,305,567 shares of our common stock, together with warrants for the purchase of 940,189 shares of common stock, for gross proceeds of approximately $6,000,000, which included the conversion of $1,545,678 of convertible promissory notes and related accrued interest. The price per unit was $0.53.

Warrants for Common Stock

In connection with the private placement, the Company issued warrants to purchase a total of 940,189 shares of common stock at an exercise price of $0.53 per share. The warrants have a contractual life of five years and are exercisable immediately in whole or in part, on or before five years from the issuance date.

In connection with the Loan and Security Agreement entered into on September 30, 2014, the Company issued a warrant to purchase a total of 471,698 shares of common stock at an exercise price of $0.53 per share. The warrant has a contractual life of ten years and is exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrant on the date of issuance to be $622,170 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 77%, risk free interest rate of 2.5% and a contractual life of ten years. The warrant will expire on September 30, 2024. The fair value of the warrant was recorded as a deferred financing cost in other assets and will be amortized to interest expense over the loan term.

As of Septemeber 30, 2014, all of these warrants remain outstanding.

8. Common Stock

In April 2012, the Company amended and restated its Certificate of Incorporation to increase the number of authorized common stock to 612,000,000 shares. The common stockholders, voting as a separate class, are entitled to elect one member of the Company’s Board of Directors. The preferred stockholders also have rights to elect two members of the Board of Directors. Pursuant to these rights, both classes of stock will vote together as one class to elect all remaining directors. The holders of common stock are also entitled to receive dividends whenever funds are legally available, as, when, and if declared by the Board of Directors. As of December 31, 2013, no dividends have been declared to date. Additionally, shares of common stock were issued under restricted stock purchase agreements. These shares are subject to a right of repurchase by the Company, which typically lapses over a four year period. In June 2009, the Company repurchased 565,833 shares of common stock. As of December 31, 2012 and 2013, the Company had 194,441 and 666 shares of common stock, respectively, subject to repurchase.

As of December 31, 2013, the Company had reserved common stock for future issuance as follows:

Conversion of Series A convertible preferred stock	291,132,255
Conversion of Series B convertible preferred stock	171,199,348
Exercise of options under stock plan	45,146,118
Issuance of options under stock plan	36,449,336
Exercise and conversion of convertible preferred stock warrants	24,299,963
	568,227,020

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Note 9 - Convertible Preferred Stock

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Disclosure Text Block Supplement [Abstract]

Preferred Stock [Text Block]

9. Convertible Preferred Stock

As part of the Merger Agreement, all shares of the Series A convertible preferred stock and Series B convertible preferred stock converted to common stock, pursuant to the conversion rights.

The holders of preferred stock had various rights and preferences as follows:

Dividends

The preferred stockholders were entitled to receive, when and as declared by the Board of Directors, out of funds legally available, cash dividends in the amount of $0.0488 and $0.004, respectively, per share, per year for each share of Series A and Series B outstanding in preference and priority to any declaration or payment of any distribution on common stock in such calendar year. These dividends are noncumulative. No distributions could be made to common stock unless all declared dividends on preferred stock have been paid or set aside for payment. No dividends have been declared to date.

Liquidation

Upon liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the holders of the Series A and Series B were entitled to receive an amount per share equal to the original issuance price for the preferred stock (as adjusted for any stock dividends, stock splits or recapitalization and similar events), plus all declared and unpaid dividends thereon to the date fixed for such distribution. If upon the liquidation event, there were insufficient funds to permit the payment to stockholders of the full preferential amounts, then the entire assets and funds of the Company would be distributed ratably among the holders of preferred stock.

Conversion

At the option of the holder thereof, each share of preferred stock was convertible, at the option of the holder at any time after the date of issuance into fully paid and non-assessable shares of common stock as determined by dividing the applicable original issue price for such series by the conversion price for such series. The conversion price was $0.05 for Series A and Series B.

Each share of preferred stock was to automatically be converted into shares of common stock at their respective conversion price immediately upon the earlier of (A) immediately prior to the closing of a firm commitment underwritten initial public offering pursuant to a registration statement under the Securities Act of 1933 covering the offering and sale of the Company’s common stock provided the aggregate gross proceeds to the Company and/or selling stockholders was not less than $30,000,000 prior to underwriters’ commissions and expenses, or (B) upon receipt of a written request for conversion from the holders of a majority of the voting power of the outstanding shares of preferred stock.

Voting

Each holder of preferred stock was entitled to the number of votes equal to the number of shares of common stock into which such holder’s shares of preferred stock could be converted as of the record date. The holders of shares of the preferred stock were entitled to vote on all matters on which the common stock was entitled to vote. The holders of preferred stock, voting as a separate class, were entitled to elect two members of the Board of Directors. The holders of common stock, voting as a separate class, were entitled to elect one member of the Board of Directors. Any additional members of the Board of Directors were to be elected by the holders of common stock and preferred stock, voting together as a single class.

Warrants for Convertible Preferred Stock

In connection with the loan and security agreement entered into in December 2008, the Company issued a warrant to purchase a total of 196,721 shares of Series A at an exercise price of $0.61 per share. The warrant had a contractual life of ten years and was exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrant on the date of issuance to be $53,863 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 79%, risk free interest rate of 2.7% and a contractual life of ten years. The warrant was to expire on December 2, 2018. The fair value of the warrant was recorded as a debt issuance cost in other assets and was amortized to interest expense over the draw down term of the loan. The entire amount of the warrant was amortized to interest expense in the year ended December 31, 2008. The fair value of the warrant was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $9,639 and $(2,361) were recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In connection with the Series A offering in 2009, the Company issued warrants to purchase 245,900 shares of Series A for $0.61 per share in April 2009. The warrants had a contractual life of ten years and were exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the fair value of the warrants on the date of issuance to be $70,082 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 79%, risk free interest rate of 2.8% and a contractual life of ten years. The warrants were to expire on April 2, 2019. The fair value of the warrants was recorded as an equity issuance cost. The fair value of the warrants was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $11,803 and $(984) were recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In connection with the loan and security agreement entered into in November 2010, the Company issued a warrant to purchase a total of 163,934 shares of Series A at an exercise price of $0.61 per share. The warrant had a contractual life of ten years and was exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrant on the date of issuance to be $46,721 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 79%, risk free interest rate of 2.9% and a contractual life of ten years. The warrant was to expire on November 19, 2020. The fair value of the warrant was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrant was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $2,295 and $(1,311) were recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In connection with the loan and security agreement entered into in April 2012, the Company issued a warrant to purchase a total of 73,770 shares of Series A at an exercise price of $0.61 per share. The warrant had a contractual life of ten years and was exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrant on the date of issuance to be $27,443 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 92%, risk free interest rate of 1.98% and a contractual life of ten years. The warrant was to expire on April 19, 2022. The fair value of the warrant was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrant was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $3,025 and $885 was recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In May 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 2,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants had a contractual life of ten years and were exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $84,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 3.2% and a contractual life of ten years. The warrants were to expire on May 9, 2021. The fair value of the warrants was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $2,000 and $2,000 were recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In June 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 4,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants had a contractual life of ten years and were exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $168,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 3.2% and a contractual life of ten years. The warrants were to expire on June 30, 2021. The fair value of the warrants was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $4,000 and $4,000 were recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In September 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 4,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants had a contractual life of ten years and were exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $168,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 2.0% and a contractual life of ten years. The warrants were to expire on September 9, 2021. The fair value of the warrants was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $0 and $4,000 was recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In November 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 1,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants had a contractual life of ten years and were exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $42,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 2.1% and a contractual life of ten years. The warrants were to expire on November 30, 2021. The fair value of the warrants was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $1,000 and $1,000 were recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In December 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 1,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants had a contractual life of ten years and were exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $41,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 1.8% and a contractual life of ten years. The warrants were to expire on December 19, 2021. The fair value of the warrants was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $1,000 and $0 were recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In January 2012, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 910,445 shares of Series B at an exercise price of $0.05 per share. The warrants had a contractual life of ten years and were exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $37,328 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 1.8% and a contractual life of ten years. The warrants were to expire on January 31, 2022. The fair value of the warrants was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $3,642 and $910 were recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

In February 2012, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 738,535 shares of Series B at an exercise price of $0.05 per share. The warrants had a contractual life of ten years and were exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $31,018 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 1.98% and a contractual life of ten years. The warrants were to expire on February 27, 2022. The fair value of the warrants was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $2,954 and $740 were recorded to other income (expense), net, respectively, for the nine months ended September 30 2014 and 2013. The warrants were extinguished in connection with the Merger.

In April 2012, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 2,351,019 shares of Series B at an exercise price of $0.05 per share. The warrants had a contractual life of ten years and were exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $98,743 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 2.0% and a contractual life of ten years. The warrants were to expire on April 16, 2022. The fair value of the warrants was recorded as a debt discount and amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of the date of the Merger, September 23, 2014, and September 30, 2013 and $9,404 and $2,351 were recorded to other income (expense), net, respectively, for the nine months ended September 30, 2014 and 2013. The warrants were extinguished in connection with the Merger.

Convertible preferred stock warrants outstanding as of December 31, 2013 were as follows:

					Number of
					Shares
	Series				Outstanding		Fair Value
	Exercisable	Expiration	Exercise		Under		December 31,
Issuance Date	for	Date	Price		Warrants		2013
December 2008	Series A	December 2, 2018	$	0.61		196,721	$	44,066
April 2009	Series A	April 2, 2019		0.61		245,900		58,278
November 2010	Series A	November 19, 2020		0.61		163,934		46,393
May 2011	Series B	May 6, 2021		0.05		2,000,000		54,000
June 2011	Series B	June 30, 2021		0.05		4,000,000		108,000
September 2011	Series B	September 9, 2021		0.05		4,000,000		108,000
November 2011	Series B	November 30, 2021		0.05		1,000,000		28,000
December 2011	Series B	December 19, 2021		0.05		1,000,000		28,000
January 2012	Series B	January 31, 2022		0.05		910,445		28,224
February 2012	Series B	February 28, 2022		0.05		738,535		22,895
April 2012	Series B	April 16, 2022		0.05		2,351,019		72,882
April 2012	Series A	April 19, 2022		0.61		73,770		24,934
						16,680,324	$	623,672

9. Convertible Preferred Stock

In April 2012, the Company amended and restated its Certificate of Incorporation to decrease the number of authorized Series A convertible preferred stock (“Series A”) to 24,543,626 and create a new series of preferred stock, to be designated Series B convertible preferred stock (“Series B”), consisting of 227,000,000 authorized shares.

The holders of preferred stock have various rights and preferences as follows:

Dividends

The preferred stockholders are entitled to receive, when and as declared by the Board of Directors, out of funds legally available, cash dividends in the amount of $0.0488 and $0.004, respectively, per share, per year for each share of Series A and Series B outstanding in preference and priority to any declaration or payment of any distribution on common stock in such calendar year. These dividends are noncumulative. No distributions shall be made to common stock unless all declared dividends on preferred stock have been paid or set aside for payment. No dividends have been declared to date.

Liquidation

Upon liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the holders of the Series A and Series B are entitled to receive an amount per share equal to the original issuance price for the preferred stock (as adjusted for any stock dividends, stock splits or recapitalization and similar events), plus all declared and unpaid dividends thereon to the date fixed for such distribution. If upon the liquidation event, there are insufficient funds to permit the payment to stockholders of the full preferential amounts, then the entire assets and funds of the Company will be distributed ratably among the holders of preferred stock.

Conversion

At the option of the holder thereof, each share of preferred stock shall be convertible, at the option of the holder at any time after the date of issuance into fully paid and non-assessable shares of common stock as determined by dividing the applicable original issue price for such series by the conversion price for such series. The conversion price is $0.05 for Series A and Series B.

Each share of preferred stock shall automatically be converted into shares of common stock at their respective conversion price immediately upon the earlier of (A) immediately prior to the closing of a firm commitment underwritten initial public offering pursuant to a registration statement under the Securities Act of 1933 covering the offering and sale of the Company’s common stock provided the aggregate gross proceeds to the Company and/or selling stockholders are not less than $30,000,000 prior to underwriters’ commissions and expenses, or (B) upon receipt of a written request for conversion from the holders of a majority of the voting power of the outstanding shares of preferred stock.

Voting

Each holder of preferred stock shall be entitled to the number of votes equal to the number of shares of common stock into which such holder’s shares of preferred stock could be converted as of the record date. The holders of shares of the preferred stock shall be entitled to vote on all matters on which the common stock shall be entitled to vote. The holders of preferred stock, voting as a separate class, shall be entitled to elect two members of the Board of Directors. The holders of common stock, voting as a separate class, shall be entitled to elect one member of the Board of Directors. Any additional members of the Board of Directors shall be elected by the holders of common stock and preferred stock, voting together as a single class.

Warrants for Convertible Preferred Stock

In connection with the issuance of Series A in August 2007, the investors acquired the rights to purchase additional shares of Series A at $0.61 per share. Such rights lapsed upon the achievement of certain milestones which occurred in April 2009. The Company calculated the fair value of these rights to be $357,829 using the Black-Scholes option pricing model with the following assumptions: dividend yield of 0%, expected volatility of 46%, risk free interest rate of 3.9% and a contractual life of 1.4 years. This amount was revalued as of December 31, 2007 and 2008 and $23,143 and $266,293 was recorded to other income (expense), net, respectively. The warrant was revalued upon the achievement of the milestones and $68,393 was recorded to other income (expense), net, during the year ended December 31, 2009.

In connection with the loan and security agreement entered into in December 2008, the Company issued a warrant to purchase a total of 196,721 shares of Series A at an exercise price of $0.61 per share. The warrant has a contractual life of ten years and is exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrant on the date of issuance to be $53,863 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 79%, risk free interest rate of 2.7% and a contractual life of ten years. The warrant expires on December 2, 2018. The fair value of the warrant was recorded as a debt issuance cost in other assets and was amortized to interest expense over the draw down term of the loan. The entire amount of the warrant was amortized to interest expense in the year ended December 31, 2008. The fair value of the warrant was re-measured as of December 31, 2012 and 2013 and ($4,131) and $6,885 were recorded to other income (expense), net, respectively, and $9,797 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In connection with the Series A offering in 2009, the Company issued warrants to purchase 245,900 shares of Series A for $0.61 per share in April 2009. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the fair value of the warrants on the date of issuance to be $70,082 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 79%, risk free interest rate of 2.8% and a contractual life of ten years. The warrants expire on April 2, 2019. The fair value of the warrants was recorded as an equity issuance cost. The fair value of the warrants was re-measured as of December 31, 2012 and 2013 and ($5,900) and $8,607 were recorded to other income (expense), net, respectively, and $11,804 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In connection with the loan and security agreement entered into in November 2010, the Company issued a warrant to purchase a total of 163,934 shares of Series A at an exercise price of $0.61 per share. The warrant has a contractual life of ten years and is exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrant on the date of issuance to be $46,721 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 79%, risk free interest rate of 2.9% and a contractual life of ten years. The warrant expires on November 19, 2020. The fair value of the warrant was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrant was re-measured as of December 31, 2012 and 2013 and ($6,485) and $2,131 were recorded to other income (expense), net, respectively, and $328 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In connection with the loan and security agreement entered into in April 2012, the Company issued a warrant to purchase a total of 73,770 shares of Series A at an exercise price of $0.61 per share. The warrant has a contractual life of ten years and is exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrant on the date of issuance to be $27,443 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 92%, risk free interest rate of 1.98% and a contractual life of ten years. The warrant expires on April 19, 2022. The fair value of the warrant was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrant was re-measured as of December 31, 2012 and 2013 and $591 and $1,918 was recorded to other income (expense), net, respectively, and $2,509 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In May 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 2,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $84,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 3.2% and a contractual life of ten years. The warrants expire on May 9, 2021. The fair value of the warrants was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of December 31, 2012 and 2013 and $23,000 and $6,000 were recorded to other income (expense), net, respectively, and $30,000 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In June 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 4,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $168,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 3.2% and a contractual life of ten years. The warrants expire on June 30, 2021. The fair value of the warrants was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of December 31, 2012 and 2013 and $46,000 and $12,000 were recorded to other income (expense), net, respectively, and $60,000 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In September 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 4,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $168,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 2.0% and a contractual life of ten years. The warrants expire on September 9, 2021. The fair value of the warrants was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of December 31, 2012 and 2013 and $46,000 and $12,000 was recorded to other income (expense), net, respectively, and $60,000 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In November 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 1,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $42,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 2.1% and a contractual life of ten years. The warrants expire on November 30, 2021. The fair value of the warrants was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of December 31, 2012 and 2013 and $11,000 and $2,000 were recorded to other income (expense), net, respectively, and $14,000 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In December 2011, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 1,000,000 shares of Series B at an exercise price of $0.05 per share. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $41,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 1.8% and a contractual life of ten years. The warrants expire on December 19, 2021. The fair value of the warrants was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of December 31, 2012 and 2013 and $11,000 and $2,000 were recorded to other income (expense), net, respectively, and $13,000 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In January 2012, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 910,445 shares of Series B at an exercise price of $0.05 per share. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $37,328 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 1.8% and a contractual life of ten years. The warrants expire on January 1, 2022. The fair value of the warrants was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of December 31, 2012 and 2013 and $7,283 and $1,821 was recorded to other income (expense), net, respectively, and $9,104 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In February 2012, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 738,535 shares of Series B at an exercise price of $0.05 per share. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $31,018 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 1.98% and a contractual life of ten years. The warrants expire on February 27, 2022. The fair value of the warrants was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of December 31, 2012 and 2013 and $6,646 and $1,477 was recorded to other income (expense), net, respectively, and $8,123 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

In April 2012, in connection with the issuance of convertible promissory notes, the Company issued warrants to purchase 2,351,019 shares of Series B at an exercise price of $0.05 per share. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part, on or before ten years from the issuance date. The Company determined the value of the warrants on the date of issuance to be $98,743 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 84%, risk free interest rate of 2.0% and a contractual life of ten years. The warrants expire on April 16, 2022. The fair value of the warrants was recorded as a debt discount and will be amortized to interest expense over the life of the loan. The fair value of the warrants was re-measured as of December 31, 2012 and 2013 and $21,159 and $4,702 was recorded to other income (expense), net, respectively, and $25,861 was recorded for the cumulative period from September 21, 2005 (date of inception) to December 31, 2013.

Convertible preferred stock warrants outstanding as of December 31, 2012 were as follows:

	Series				Number of		Fair Value as of
	Exercisable	Expiration	Exercise		Warrants		December 31,
Issuance Date	for	Date	Price		Outstanding		2012
December 2008	Series A	December 2, 2018	$	0.61		196,721	$	50,951
April 2009	Series A	April 2, 2019		0.61		245,900		66,885
November 2010	Series A	November 19, 2020		0.61		163,934		48,524
May 2011	Series B	May 6, 2021		0.05		2,000,000		60,000
June 2011	Series B	June 30, 2021		0.05		4,000,000		120,000
September 2011	Series B	September 9, 2021		0.05		4,000,000		120,000
November 2011	Series B	November 30, 2021		0.05		1,000,000		30,000
December 2011	Series B	December 19, 2021		0.05		1,000,000		30,000
January 2012	Series B	January 31, 2022		0.05		910,445		30,045
February 2012	Series B	February 28, 2022		0.05		738,535		24,372
April 2012	Series B	April 16, 2022		0.05		2,351,019		77,584
April 2012	Series A	April 19, 2022		0.61		73,770		26,852
						16,680,324	$	685,213

Convertible preferred stock warrants outstanding as of December 31, 2013 were as follows:

	Series				Number of		Fair Value as of
	Exercisable	Expiration	Exercise		Warrants		December 31,
Issuance Date	for	Date	Price		Outstanding		2013
December 2008	Series A	December 2, 2018	$	0.61		196,721	$	44,066
April 2009	Series A	April 2, 2019		0.61		245,900		58,278
November 2010	Series A	November 19, 2020		0.61		163,934		46,393
May 2011	Series B	May 6, 2021		0.05		2,000,000		54,000
June 2011	Series B	June 30, 2021		0.05		4,000,000		108,000
September 2011	Series B	September 9, 2021		0.05		4,000,000		108,000
November 2011	Series B	November 30, 2021		0.05		1,000,000		28,000
December 2011	Series B	December 19, 2021		0.05		1,000,000		28,000
January 2012	Series B	January 31, 2022		0.05		910,445		28,224
February 2012	Series B	February 28, 2022		0.05		738,535		22,895
April 2012	Series B	April 16, 2022		0.05		2,351,019		72,882
April 2012	Series A	April 19, 2022		0.61		73,770		24,934
						16,680,324	$	623,672

XML

Note 11 - Income Taxes

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

11. Income Taxes

Provision for Income Tax

The Company’s effective tax rate is 0% for the three and nine months ended September 30, 2014 and the Company expects that its effective tax rate for the full year 2014 will be 0%. Based on the weight of available evidence, including cumulative losses since inception and expected future losses, the Company has determined that it is more likely than not that the deferred tax asset amount will not be realized and therefore a full valuation allowance has been provided on net deferred tax assets.

As of September 30, 2014, the Company had net operating loss carryforwards of approximately $11,188,000 and $11,176,000 available to offset future taxable income, if any, for both federal and California state income tax purposes, respectively. The Company’s federal and state net operating loss carry-forwards begin to expire in 2027 and 2016, respectively, and valuation allowances have been provided, where necessary.

Utilization of the net operating loss carry-forward may be subject to an annual limitation due to the ownership percentage change limitations provided by the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of the net operating loss before utilization.

All of the Company’s tax years will remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating loss or credits.

Uncertain Tax Positions

The gross amount of unrecognized tax benefits as of September 30, 2014 is approximately $78 thousand related to reserves on research and development credits, none of which will affect the effective tax rate if recognized due to the valuation allowance. The Company does not expect any material changes in the next 12 months in unrecognized tax benefits.

The Company recognizes interest and/or penalties related to uncertain tax positions as other expense and not tax expense. The Company currently has no interest and penalties related to uncertain tax positions.

11. Income Taxes

The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets are as follows:

	2012			2013
Net operating loss carryforwards	$	3,951,000		$	4,203,000
Research and development credits		162,000			162,000
Start-up expenses capitalized		5,726,000			7,156,000
Accruals and reserves		150,000			99,000
Property and equipment		(22,000	)		(11,000	)
		9,967,000			11,609,000
Less: Valuation allowance		(9,967,000	)		(11,609,000	)
	$	-		$	-

Based on a number of factors, including the lack of history of profits and the fact that the Company competes in a developing market that is characterized by rapidly changing technology, management believes that there is sufficient uncertainty regarding the realization of deferred tax assets such that a full valuation allowance has been provided. The valuation allowance increased by $1,789,000 and $1,642,000 during the years ended December 31, 2012 and 2013, respectively.

As of December 31, 2013, the Company had net operating loss carryforwards of approximately $10,554,000 and $10,543,000 available to offset future taxable income, if any, for both federal and California state income tax purposes, respectively. The Company’s federal and state net operating loss carryforwards begin to expire in 2027 and 2017, respectively, and valuation allowances have been provided, where necessary.

As of December 31, 2013, the Company also had federal and state research and development credit carryforwards of approximately $142,000 and $136,000, respectively, available to reduce future taxable income. The federal credit carryforward begins to expire in 2027, the California credit will carryforward indefinitely and valuation allowances have been provided, where necessary.

Utilization of the net operating loss carryforward may be subject to an annual limitation due to the ownership percentage change limitations provided by the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of the net operating loss before utilization.

No liability related to uncertain tax positions is recorded on the financial statements. As of December 31, 2013, the Company had an unrecognized tax benefit of $70,000. It is the Company’s policy to include penalties and interest expense related to income taxes as a component of other expense and interest expense, respectively, as necessary.

All of the Company’s tax years will remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating loss or credits.

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Note 10 - Stock Option Plan (Details) - Summary of Option Activity Under All Plans (USD $)	9 Months Ended		12 Months Ended	9 Months Ended	12 Months Ended							15 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Sep. 30, 2014 The 2006 Stock Option Plan [Member]	Dec. 31, 2013 The 2006 Stock Option Plan [Member]	Dec. 31, 2012 The 2006 Stock Option Plan [Member]	Dec. 31, 2011 The 2006 Stock Option Plan [Member]	Dec. 31, 2010 The 2006 Stock Option Plan [Member]	Dec. 31, 2009 The 2006 Stock Option Plan [Member]	Dec. 31, 2008 The 2006 Stock Option Plan [Member]	Dec. 31, 2007 The 2006 Stock Option Plan [Member]	Dec. 31, 2006 The 2006 Stock Option Plan [Member]	Sep. 21, 2005 The 2006 Stock Option Plan [Member]
Note 10 - Stock Option Plan (Details) - Summary of Option Activity Under All Plans [Line Items]
Shares reserved at plan inception													1,000,000
Shares reserved at plan inception	2,294,534		363,413		36,449,336	36,807,350	501,871	202,621	499,576	2,014,000	2,086,500	948,500	0
Options granted	(1,901,476)				(11,873,890)	(43,694,521)	(345,000)	(771,412)	(1,892,029)	(72,500)	(867,000)	(51,500)
Options granted	1,901,476				11,873,890	43,694,521	345,000	771,412	1,892,029	72,500	867,000	51,500
Options granted (in Dollars per share)	$ 0.60				$ 0.01	$ 0.01	$ 0.12	$ 0.05	$ 0.06	$ 0.06	$ 0.06	$ 0.001
Options exercised	0	0				(1,866,903)	(9,000)	(173,455)	(322,395)
Options exercised (in Dollars per share)						$ 0.07	$ 0.001	$ 0.001	$ 0.06
Options forfeited	38,593				11,515,876		139,000	12,500	377,605		5,000
Options forfeited	(38,593)				(11,515,876)		(139,000)	(12,500)	(377,605)		(5,000)
Options forfeited (in Dollars per share)	$ 1.75				$ 0.01		$ 0.06	$ 0.06	$ 0.06		$ 0.001
Repurchase of restricted stock options							5,250
Balances as of December 31, 20	2,294,534		363,413		36,449,336	36,807,350	501,871	202,621	499,576	2,014,000	2,086,500	948,500	0
Balances as of December 31, 20				324,820	45,146,118	44,788,104	2,960,486	2,763,486	2,178,029	986,000	913,500	51,500
Balances as of December 31, 20 (in Dollars per share)	$ 1.02		$ 2.94	$ 1.55	$ 0.01	$ 0.01	$ 0.07	$ 0.06	$ 0.06	$ 0.06	$ 0.06	$ 0.001
Balances as of December 31, 20	9 years 244 days		8 years 292 days	8 years 21 days	8 years 292 days	9 years 270 days	7 years 255 days	8 years 146 days	9 years	8 years 317 days	9 years 299 days	9 years 350 days
Options vested and expected to vest as of December 31, 2013					43,338,910
Options vested and expected to vest as of December 31, 2013 (in Dollars per share)					$ 0.01
Options vested and expected to vest as of December 31, 2013					8 years 292 days
Options vested as of December 31, 2013					15,025,985
Options vested as of December 31, 2013 (in Dollars per share)					$ 0.02
Options vested as of December 31, 2013					8 years 219 days
Additional shares reserved						80,000,000	500,000	461,957			2,000,000

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Note 10 - Stock Option Plan (Details) - Valuation Assumptions for Stock Options	9 Months Ended	12 Months Ended		99 Months Ended	12 Months Ended	99 Months Ended	9 Months Ended		12 Months Ended		99 Months Ended
	Sep. 30, 2014	Dec. 30, 2013	Dec. 31, 2012 Employee Stock Option [Member] Minimum [Member]	Dec. 31, 2013 Employee Stock Option [Member] Minimum [Member]	Dec. 31, 2012 Employee Stock Option [Member] Maximum [Member]	Dec. 31, 2013 Employee Stock Option [Member] Maximum [Member]	Sep. 30, 2014 Employee Stock Option [Member]	Sep. 30, 2013 Employee Stock Option [Member]	Dec. 31, 2013 Employee Stock Option [Member]	Dec. 31, 2012 Employee Stock Option [Member]	Dec. 31, 2013 Employee Stock Option [Member]
Note 10 - Stock Option Plan (Details) - Valuation Assumptions for Stock Options [Line Items]
Expected term (in years)				5 years		6 years 3 months	5 years	5 years	5 years	5 years
Expected volatility				60.00%		79.00%			67.00%	68.00%
Risk-free interest rate			0.76%	0.76%	0.84%	4.70%	1.80%	0.87%	0.84%
Dividend yield	0.00%	0.00%					0.00%	0.00%	0.00%	0.00%	0.00%

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Note 9 - Convertible Preferred Stock (Details) - Convertible Preferred Stock Warrants Outstanding (USD $)								12 Months Ended				12 Months Ended				12 Months Ended				12 Months Ended				12 Months Ended				12 Months Ended				12 Months Ended				12 Months Ended				12 Months Ended				12 Months Ended				12 Months Ended					12 Months Ended
	Sep. 23, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Dec. 30, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 30, 2013 Series A Preferred Stock [Member] December 2008 Warrants [Member]	Dec. 31, 2013 Series A Preferred Stock [Member] December 2008 Warrants [Member]	Dec. 31, 2012 Series A Preferred Stock [Member] December 2008 Warrants [Member]	Dec. 31, 2008 Series A Preferred Stock [Member] December 2008 Warrants [Member]	Dec. 30, 2013 Series A Preferred Stock [Member] April 2009 Warrants [Member]	Dec. 31, 2013 Series A Preferred Stock [Member] April 2009 Warrants [Member]	Dec. 31, 2012 Series A Preferred Stock [Member] April 2009 Warrants [Member]	Apr. 30, 2009 Series A Preferred Stock [Member] April 2009 Warrants [Member]	Dec. 30, 2013 Series A Preferred Stock [Member] November 2010 Warrants [Member]	Dec. 31, 2013 Series A Preferred Stock [Member] November 2010 Warrants [Member]	Dec. 31, 2012 Series A Preferred Stock [Member] November 2010 Warrants [Member]	Nov. 30, 2010 Series A Preferred Stock [Member] November 2010 Warrants [Member]	Dec. 30, 2013 Series A Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 31, 2013 Series A Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 31, 2012 Series A Preferred Stock [Member] April 2012 Warrants [Member]	Apr. 30, 2012 Series A Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] May 2011 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] May 2011 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] May 2011 Warrants [Member]	May 31, 2011 Series B Preferred Stock [Member] May 2011 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] June 2011 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] June 2011 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] June 2011 Warrants [Member]	Jun. 30, 2011 Series B Preferred Stock [Member] June 2011 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] September 2011 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] September 2011 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] September 2011 Warrants [Member]	Sep. 30, 2011 Series B Preferred Stock [Member] September 2011 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] November 2011 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] November 2011 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] November 2011 Warrants [Member]	Nov. 30, 2011 Series B Preferred Stock [Member] November 2011 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] December 2011 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] December 2011 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] December 2011 Warrants [Member]	Dec. 31, 2011 Series B Preferred Stock [Member] December 2011 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] January 2012 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] January 2012 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] January 2012 Warrants [Member]	Jan. 31, 2012 Series B Preferred Stock [Member] January 2012 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] February 2012 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] February 2012 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] February 2012 Warrants [Member]	Feb. 29, 2012 Series B Preferred Stock [Member] February 2012 Warrants [Member]	Feb. 28, 2012 Series B Preferred Stock [Member] February 2012 Warrants [Member]	Dec. 30, 2013 Series B Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 31, 2013 Series B Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 31, 2012 Series B Preferred Stock [Member] April 2012 Warrants [Member]	Apr. 30, 2012 Series B Preferred Stock [Member] April 2012 Warrants [Member]	Dec. 31, 2008 December 2008 Warrants [Member]	Nov. 30, 2010 November 2010 Warrants [Member]	Apr. 30, 2012 April 2012 Warrants [Member]
Class of Warrant or Right [Line Items]
Expiration date								Dec. 02, 2018	Dec. 02, 2018	Dec. 02, 2018		Apr. 02, 2019	Apr. 02, 2019	Apr. 02, 2019		Nov. 19, 2020	Nov. 19, 2020	Nov. 19, 2020		Apr. 19, 2022	Apr. 19, 2022	Apr. 19, 2022		May 06, 2021	May 06, 2021	May 06, 2021		Jun. 30, 2021	Jun. 30, 2021	Jun. 30, 2021		Sep. 09, 2021	Sep. 09, 2021	Sep. 09, 2021		Nov. 30, 2021	Nov. 30, 2021	Nov. 30, 2021		Dec. 19, 2021	Dec. 19, 2021	Dec. 19, 2021		Jan. 31, 2022	Jan. 31, 2022	Jan. 31, 2022		Feb. 28, 2022	Feb. 28, 2022	Feb. 28, 2022			Apr. 16, 2022	Apr. 16, 2022	Apr. 16, 2022
Exercise price	$ 0.53			$ 0.06				$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.61	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.61	$ 0.61	$ 0.61
Number of warrants outstanding	940,189			16,680,324	16,680,324	16,680,324		196,721	196,721	196,721	196,721	245,900	245,900	245,900	245,900	163,934	163,934	163,934	163,934	73,770	73,770	73,770	73,770	2,000,000	2,000,000	2,000,000	2,000,000	4,000,000	4,000,000	4,000,000	4,000,000	4,000,000	4,000,000	4,000,000	4,000,000	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000	910,445	910,445	910,445	910,445	738,535	738,535	738,535	738,535	738,535	2,351,019	2,351,019	2,351,019	2,351,019	196,721	163,934	73,770
Fair Value		$ 580,187	$ 602,188	$ 623,672	$ 623,672	$ 685,213	$ 646,844	$ 44,066	$ 44,066	$ 50,951	$ 53,863	$ 58,278	$ 58,278	$ 66,885	$ 70,082	$ 46,393	$ 46,393	$ 48,524	$ 46,721	$ 24,934	$ 24,934	$ 26,852	$ 27,443	$ 54,000	$ 54,000	$ 60,000	$ 84,000	$ 108,000	$ 108,000	$ 120,000	$ 168,000	$ 108,000	$ 108,000	$ 120,000	$ 168,000	$ 28,000	$ 28,000	$ 30,000	$ 42,000	$ 28,000	$ 28,000	$ 30,000	$ 41,000	$ 28,224	$ 28,224	$ 30,045	$ 37,328	$ 22,895	$ 22,895	$ 24,372	$ 31,018	$ 31,018	$ 72,882	$ 72,882	$ 77,584	$ 98,743

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Note 3 - Fair Value Measurements (Details) - Assets and Liabilities Measured at Fair Value (USD $)	Sep. 30, 2014	Dec. 31, 2013	Dec. 31, 2012
Note 3 - Fair Value Measurements (Details) - Assets and Liabilities Measured at Fair Value [Line Items]
Total assets	$ 190	$ 324	$ 503
Preferred stock warrant liabilities		623,672	685,213
Total liabilities		623,672	685,213
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member]
Note 3 - Fair Value Measurements (Details) - Assets and Liabilities Measured at Fair Value [Line Items]
Money market fund	190	324	503
Fair Value, Inputs, Level 1 [Member]
Note 3 - Fair Value Measurements (Details) - Assets and Liabilities Measured at Fair Value [Line Items]
Total assets	190	324	503
Fair Value, Inputs, Level 3 [Member]
Note 3 - Fair Value Measurements (Details) - Assets and Liabilities Measured at Fair Value [Line Items]
Preferred stock warrant liabilities		623,672	685,213
Total liabilities		623,672	685,213
Money Market Funds [Member]
Note 3 - Fair Value Measurements (Details) - Assets and Liabilities Measured at Fair Value [Line Items]
Money market fund	$ 190	$ 324	$ 503

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Note 11 - Income Taxes (Details) (USD $)	3 Months Ended	9 Months Ended	12 Months Ended				9 Months Ended	12 Months Ended			9 Months Ended	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2014	Dec. 31, 2013	Dec. 31, 2012	Sep. 30, 2014 Domestic Tax Authority [Member] Internal Revenue Service (IRS) [Member]	Dec. 31, 2013 Domestic Tax Authority [Member] Internal Revenue Service (IRS) [Member]	Sep. 30, 2014 Domestic Tax Authority [Member]	Dec. 31, 2013 Domestic Tax Authority [Member]	Sep. 30, 2014 State and Local Jurisdiction [Member] California Franchise Tax Board [Member]	Dec. 31, 2013 State and Local Jurisdiction [Member] California Franchise Tax Board [Member]	Sep. 30, 2014 State and Local Jurisdiction [Member]	Dec. 31, 2013 State and Local Jurisdiction [Member]	Dec. 31, 2014 Scenario, Forecast [Member]
Note 11 - Income Taxes (Details) [Line Items]
Effective Income Tax Rate Reconciliation, Percent	0.00%	0.00%											0.00%
Operating Loss Carryforwards					$ 11,188,000	$ 10,554,000			$ 11,176,000	$ 10,543,000
Duration of Open Tax Years							3 years	3 years			4 years	4 years
Unrecognized Tax Benefits	78,000	78,000	70,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense		0
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount			1,642,000	1,789,000
Deferred Tax Assets, in Process Research and Development			$ 162,000	$ 162,000		$ 142,000				$ 136,000

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Note 2 - Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Stock options to purchase common stock		476,671		409,488		445,804		491,609
Warrants to purchase common stock		72,322		-		24,107		-
		548,993		409,488		469,911		491,609

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Note 9 - Convertible Preferred Stock (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Disclosure Text Block Supplement [Abstract]

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

					Number of
					Shares
	Series				Outstanding		Fair Value
	Exercisable	Expiration	Exercise		Under		December 31,
Issuance Date	for	Date	Price		Warrants		2013
December 2008	Series A	December 2, 2018	$	0.61		196,721	$	44,066
April 2009	Series A	April 2, 2019		0.61		245,900		58,278
November 2010	Series A	November 19, 2020		0.61		163,934		46,393
May 2011	Series B	May 6, 2021		0.05		2,000,000		54,000
June 2011	Series B	June 30, 2021		0.05		4,000,000		108,000
September 2011	Series B	September 9, 2021		0.05		4,000,000		108,000
November 2011	Series B	November 30, 2021		0.05		1,000,000		28,000
December 2011	Series B	December 19, 2021		0.05		1,000,000		28,000
January 2012	Series B	January 31, 2022		0.05		910,445		28,224
February 2012	Series B	February 28, 2022		0.05		738,535		22,895
April 2012	Series B	April 16, 2022		0.05		2,351,019		72,882
April 2012	Series A	April 19, 2022		0.61		73,770		24,934
						16,680,324	$	623,672

	Series				Number of		Fair Value as of
	Exercisable	Expiration	Exercise		Warrants		December 31,
Issuance Date	for	Date	Price		Outstanding		2012
December 2008	Series A	December 2, 2018	$	0.61		196,721	$	50,951
April 2009	Series A	April 2, 2019		0.61		245,900		66,885
November 2010	Series A	November 19, 2020		0.61		163,934		48,524
May 2011	Series B	May 6, 2021		0.05		2,000,000		60,000
June 2011	Series B	June 30, 2021		0.05		4,000,000		120,000
September 2011	Series B	September 9, 2021		0.05		4,000,000		120,000
November 2011	Series B	November 30, 2021		0.05		1,000,000		30,000
December 2011	Series B	December 19, 2021		0.05		1,000,000		30,000
January 2012	Series B	January 31, 2022		0.05		910,445		30,045
February 2012	Series B	February 28, 2022		0.05		738,535		24,372
April 2012	Series B	April 16, 2022		0.05		2,351,019		77,584
April 2012	Series A	April 19, 2022		0.61		73,770		26,852
						16,680,324	$	685,213

	Series				Number of		Fair Value as of
	Exercisable	Expiration	Exercise		Warrants		December 31,
Issuance Date	for	Date	Price		Outstanding		2013
December 2008	Series A	December 2, 2018	$	0.61		196,721	$	44,066
April 2009	Series A	April 2, 2019		0.61		245,900		58,278
November 2010	Series A	November 19, 2020		0.61		163,934		46,393
May 2011	Series B	May 6, 2021		0.05		2,000,000		54,000
June 2011	Series B	June 30, 2021		0.05		4,000,000		108,000
September 2011	Series B	September 9, 2021		0.05		4,000,000		108,000
November 2011	Series B	November 30, 2021		0.05		1,000,000		28,000
December 2011	Series B	December 19, 2021		0.05		1,000,000		28,000
January 2012	Series B	January 31, 2022		0.05		910,445		28,224
February 2012	Series B	February 28, 2022		0.05		738,535		22,895
April 2012	Series B	April 16, 2022		0.05		2,351,019		72,882
April 2012	Series A	April 19, 2022		0.61		73,770		24,934
						16,680,324	$	623,672

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Note 10 - Summary of Stock Options (Details) - Valuation Assumptions for Stock Options	9 Months Ended	12 Months Ended	9 Months Ended		12 Months Ended		99 Months Ended
	Sep. 30, 2014	Dec. 30, 2013	Sep. 30, 2014 Employee Stock Option [Member]	Sep. 30, 2013 Employee Stock Option [Member]	Dec. 31, 2013 Employee Stock Option [Member]	Dec. 31, 2012 Employee Stock Option [Member]	Dec. 31, 2013 Employee Stock Option [Member]
Note 10 - Summary of Stock Options (Details) - Valuation Assumptions for Stock Options [Line Items]
Expected term (in years)			5 years	5 years	5 years	5 years
Average volatility			61.00%	67.00%
Risk-free interest rate			1.80%	0.87%	0.84%
Dividend yield	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%

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Note 7 - Commitments and Contingencies (Details) (USD $)	9 Months Ended		12 Months Ended	15 Months Ended	99 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Dec. 30, 2013	Sep. 30, 2012	Dec. 30, 2013
Commitments and Contingencies Disclosure [Abstract]
Operating Leases, Rent Expense	$ 128,359	$ 128,359	$ 173,896	$ 166,398	$ 744,602

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Condensed Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended		12 Months Ended		99 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013
Cash flows from operating activities:
Net loss	$ (4,437,399)	$ (3,432,349)	$ (4,316,779)	$ (4,960,019)	$ (29,904,925)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense	42,220	35,871	66,120	57,173	239,475
Stock-based compensation expense	143,643	66,001	87,428	109,197	291,215
Revaluation of warrant liability	(50,762)	(11,230)	(61,541)	(156,163)	(622,824)
Noncash interest expense	369,677	227,911	305,917	545,165	1,228,529
Loss on disposal of property and equipment				31,433	31,433
Changes in assets and liabilities:
Accounts receivable	(3,750)	849	849	(849)
Inventory	91,261	(574)	71,247	(242,861)	(288,967)
Prepaid and other current assets	120,177	(209,711)	(243,661)	123,605	(308,183)
Other noncurrent assets	13,908	13,908	13,930	(48,300)	(43,783)
Accounts payable	(401,256)	439,849	481,738	(13,175)	967,315
Accrued liabilities	61,293	(80,357)	(159,868)	(888,960)	337,095
Net cash used in operating activities	(4,050,988)	(2,949,832)	(3,754,620)	(5,443,754)	(28,073,620)
Cash flows from investing activities:
Proceeds from sale of property and equipment				50	50
Purchase of property and equipment	(106,359)	(4,214)	(4,213)	(23,331)	(337,678)
Net cash used in investing activities	(106,359)	(4,214)	(4,213)	(23,281)	(337,628)
Cash flows from financing activities:
Net cash proceeds from issuance of common stock in connection with private placement offering	4,204,220
Net proceeds from issuance of common stock					4,000
Proceeds from exercise of stock options				9,335	28,687
Repurchase of common stock					(565)
Repurchase of restricted stock options					(316)
Proceeds from related party convertible bridge notes and warrants	1,500,000	3,000,000	3,875,000	2,000,000	9,375,400
Repayments of notes payable		(134,814)	(134,814)	(2,165,475)	(4,163,361)
Net cash provided by financing activities	5,704,220	2,865,186	3,740,186	5,743,210	28,841,355
Net increase (decrease) in cash and cash equivalents	1,546,873	(88,860)	(18,647)	276,175	430,107
Proceeds from notes payable				2,135,159	6,107,159
Beginning of period	430,107	448,754	448,754	172,579
End of period	1,976,980	359,894	430,107	448,754	430,107
Supplemental disclosure
Cash paid for interest	116,905	106,469	141,423	198,194	783,482
Cash paid for income taxes	800	800	800	800	6,400
Supplemental schedule of noncash investing and financing activities:
Issuance of warrants in connection with loans/notes payable					20,069
Tranfer of equipment between inventory and property and equipment			60,804		60,804
Conversion of bridge loans and interest into stock	1,545,678
Extinguishment of convertible notes debt and related related accrued interest pursuant to Merger Agreement	5,397,278
Agreement	572,910
Payable to non-accredited investors in connection with Merger Agreement	16,498
Preferred Class A [Member]
Cash flows from financing activities:
Proceeds from issuance of convertible preferred stock and warrants, net of issuance costs					13,726,160
Supplemental schedule of noncash investing and financing activities:
Conversion of bridge loans and interest into stock					501,873
Preferred Class B [Member]
Cash flows from financing activities:
Proceeds from issuance of convertible preferred stock and warrants, net of issuance costs				3,764,191	3,764,191
Supplemental schedule of noncash investing and financing activities:
Conversion of bridge loans and interest into stock				4,709,968	4,709,968
Bridge Loan [Member]
Supplemental schedule of noncash investing and financing activities:
Cancellation of warrants in connection with bridge loans					15,091
Notes Payable to Banks [Member]
Supplemental schedule of noncash investing and financing activities:
Issuance of warrants in connection with loans/notes payable	622,170				100,584
April 2012 Term Loan [Member]
Supplemental schedule of noncash investing and financing activities:
Issuance of warrants in connection with loans/notes payable					70,082
Related Party Convertible Bridge Notes [Member]
Supplemental schedule of noncash investing and financing activities:
Issuance of warrants in connection with loans/notes payable				$ 167,090	$ 670,090

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Note 5 - Note Payable

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

5. Note Payable

In April 2012, the Company entered into a loan and security agreement for up to $2,135,159 in term loans that were used to pay off the existing loan with a financial institution. The full amount was drawn down in April 2012. In connection with the agreement, the Company issued a warrant to the lender to purchase a total of 73,770 shares of the Company’s Series A convertible preferred stock at $0.61 per share (Note 9). The borrowings were repayable in interest only payments until May 1, 2012 and then 30 equal installments of principal and interest at a rate of 9.5% per annum. An additional 4% of the principal or approximately $85,000 will be due as the final payment at the end of the loan term. The Company recorded $8,528 and $28,785 as additional interest expense during the nine months ended September 30, 2014 and 2013, respectively, related to the $85,000 payment. The Company will continue to accrue the balance of the $85,000 cash payment over the remaining term of the loan using the effective interest rate method. As of September 30, 2014 and December 31, 2013, $85,000 and $76,472 was recorded in accrued liabilities on the condensed consolidated balance sheets relating to this payment. All borrowings under the agreement are collateralized by substantially all of the Company’s assets, including intellectual property. As of September 30, 2014 and December 31, 2013, the note payable had an outstanding balance of $1,471,799 and $1,462,244, respectively. The term loan has a maturity date of October 1, 2014 and was repaid on that date as discussed in Note 13.

In February 2013, the Company and lender amended the loan and security agreement to defer up to 3 months of principal payments contingent upon the receipt of bridge loan proceeds in increments of $500,000, up to $1,500,000 on or before April 30, 2013, beginning March 1, 2013. This amendment also included a $15,000 restructuring fee that would be due upon the maturity date of the loan.

In May 2013, the Company and lender amended the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more, on or before September 30, 2013. The principal payments were to be deferred and payable on August 1, 2013. This amendment also included a $10,000 restructuring fee that would be due upon the maturity date of the loan.

In July 2013, the Company and lender agreed to further amend the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more, on or before August 28, 2013, and an additional month deferral provided a 2013 equity event was completed resulting in net cash proceeds of not less than $10 million from the sale of the Company’s equity securities consummated by September 27, 2013. Principal payments would be deferred and payable on October 1, 2013, provided both of these conditions were met. This amendment also included a $10,000 restructuring fee that would be due upon the maturity date of the loan.

In September 2013, the Company and lender agreed to further amend the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more on or before August 28, 2013 and another $500,000 or more on or before October 28, 2013. Principal payments would be deferred until December 1, 2013. This amendment also included a $10,000 restructuring fee that would be due upon the maturity date of the loan.

In November 2013, the Company and lender agreed to further amend the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more on or before December 27, 2013 and upon the consummation of a 2014 equity event requiring the receipt of not less than $7 million in net cash proceeds by no later than January 24, 2014. Principal payments would be deferred until February 1, 2014. This amendment also included a $10,000 restructuring fee that would be due upon the maturity date of the loan.

In January 2014, the Company and lender agreed to further amend the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more on or before February 25, 2014 and consummation of an equity event by April 25, 2014. This amendment included an additional $5,000 restructuring fee for each month principal payments are deferred beginning February 1, 2014 through April 1, 2014, provided restructuring fees in this amendment shall not exceed $15,000 in total that would also be due upon the maturity date of the loan.

In February 2014, the Company and lender agreed to further amend the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more on or before April 25, 2014 and consummation of an equity event by June 27, 2014. This amendment included an additional $5,000 restructuring fee for each month principal payments are deferred beginning March 1, 2014 through June 1, 2014, provided restructuring fees in this amendment shall not exceed $20,000. This amendment also amended the January 2014 restructuring fee such that the January 2014 restructuring fee shall not exceed $5,000 in total that would also be due upon the maturity date of the loan.

In June 2014, the Company and lender agreed to further amend the loan and security agreement such that the remaining 3 months of principal payments would be deferred until the maturity date of the term loan when all unpaid principal and interest will be immediately due. This amendment also includes an additional $5,000 restructuring fee for each month principal payments are deferred beginning July 1, 2014 through September 1, 2014, provided restructuring fees in this amendment do not exceed $15,000 in total that would also be due upon the maturity date of the loan.

In September 2014, the lender agreed to reduce the total restructuring fees to $47,500. The Company recorded $20,212, net of the reduction in fees, and $45,000 as additional interest expense during the nine months ended September 30, 2014 and 2013, respectively, related to these restructuring fees. The Company has been accruing the balance of the cash restructuring payment over the term of the loan using the effective interest rate method. As of September 30, 2014 and December 31, 2013, $47,500 and $27,288 was recorded as an accrued liability on the condensed consolidated balance sheets relating to this restructuring payment.

The loan and security agreement contains a material adverse change clause, as defined in the agreement, which would result in an event of default if the lender deems a material adverse change to have occurred to the Company’s business. The continuing liquidity issues the Company faces could be construed by the note holder as a material adverse change which could trigger an acceleration of all of the outstanding debt. As such, the Company has classified all of its outstanding debt balance as a current liability as of September 30, 2014 and December 31, 2013.

As of September 30, 2014, future minimum payments under the note payable are as follows:

Year Ending December 31, 2014	$	1,618,091
		1,618,091
Less: Amount representing interest		(146,292	)
Present value of obligations		1,471,799
Less: Unamortized debt discount		-
		1,471,799
Less: Notes payable, current portion		1,471,799
Notes payable, noncurrent portion	$	-

On September 30, 2014, the Company entered into a Loan and Security Agreement pursuant to which we received a term loan in the amount of $5 million, which will be funded in three tranches. The first tranche of $2.5 million was provided to the Company on October 1, 2014. The proceeds from the first tranche were used to repay the existing loan (including interest and restructuring fees) with a financial institution which totaled $1,630,925. Before the second and third tranches of the term loan will be funded, we must meet certain enrollment milestones and achieve certain positive results relating to our OUS Clinical Trials, among other things. In connection with the loan agreement, the Company issued a 10-year warrant to the lender for the purchase of 471,698 shares of the Company’s common stock at $0.53 per share (Note 8).

5. Note Payable

In December 2008, the Company entered into a loan and security agreement with a financial institution for $1,500,000. In connection with the agreement, the Company issued a warrant to the lender to purchase a total of 196,721 shares of the Company’s Series A convertible preferred stock at $0.61 per share (Note 9). The borrowings were repayable over 27 months at a rate of 8.5% per annum. An additional $75,000 was due as final payment at the end of the loan term. All borrowings under the agreement were collateralized by substantially all of the Company’s assets, excluding intellectual property.

The agreement contained a material adverse change clause, as defined in the agreement, which would result in an event of default if the bank deems a material adverse change to have occurred to the Company’s business. The Company was also required to comply with certain affirmative and negative covenants, including obtaining additional equity financing of at least $6,000,000 on or before March 31, 2009. The Company did not meet this covenant and subsequently obtained a forbearance agreement from the bank extending the equity financing requirement to July 31, 2009. In November 2010, the Company paid off the outstanding principal amount, interest accrued and final payment and paid a prepayment penalty.

In November 2010, the Company entered into a loan and security agreement with a financial institution for $2,000,000. The borrowings were repayable over 36 months at a rate of 9.5% per annum. An additional $80,000 was due as final payment at the end of the loan term. In connection with the agreement, the Company issued a warrant to the lender to purchase a total of 163,934 shares of the Company’s Series A convertible preferred stock at $0.61 per share (Note 9). All borrowings under the agreement are collateralized by substantially all of the Company’s assets, excluding intellectual property. The Company used a portion of the proceeds received to repay, in full, amounts outstanding under the December 2008 loan agreement. As of December 31, 2012 and 2013, the note payable had an outstanding balance of $0.

In April 2012, the Company entered into a loan and security agreement for up to $2,135,159 in term loans. The full amount was drawn down in April 2012. In connection with the agreement, the Company issued a warrant to the lender to purchase a total of 73,770 shares of the Company’s Series A convertible preferred stock at $0.61 per share (Note 9). The borrowings were repayable in interest only payments until May 1, 2012 and then 30 equal installments of principal and interest at a rate of 9.5% per annum. An additional 4% of the principal or approximately $85,000 will be due as final payment at the end of the loan term. The Company recorded $41,127, $35,345 and $76,472 as additional interest expense during the years ended December 31, 2012 and 2013 and, cumulatively, for the period from September 21, 2005 (date of inception) to December 31, 2013, respectively, related to the $85,000 payment. The Company will continue to accrue the balance of the $85,000 cash payment over the remaining term of the loan using the effective interest rate method. The Company will continue to accrue the balance of the $85,000 cash payment over the remaining term of the loan using the effective interest rate method. As of December 31, 2012, $41,172 was recorded as accrued liabilities, noncurrent on the balance sheet relating to this payment. As of December 31, 2013, $76,472 was recorded as accrued liabilities on the balance sheet relating to this payment. The Company used the proceeds from these term loans to pay off an existing loan with the financial institution. All borrowings under the agreement are collateralized by substantially all of the Company’s assets, including intellectual property. As of December 31, 2012 and 2013, the note payable had an outstanding balance of $1,606,612 and $1,471,798, respectively.

In February 2013, the Company and lender amended the loan and security agreement to defer up to 3 months of principal payments contingent upon the receipt of bridge loan proceeds in increments of $500,000, up to $1,500,000 on or before April 30, 2013, beginning March 1, 2013. This amendment also includes a $15,000 restructuring fee that will be due upon loan maturity currently scheduled for October 1, 2014.

In May 2013, the Company and lender amended the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more, on or before June 30, 2013. The principal payments was to be deferred and payable on August 1, 2013. This amendment also included a $10,000 restructuring fee that would be due upon loan maturity currently scheduled for October 1, 2014.

In July 2013, the Company and lender agreed to further amend the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more, on or before August 28, 2013, and an additional month deferral provided a 2013 equity event was completed resulting in net cash proceeds of not less than $10 million from the sale of the Company’s equity securities consummated by September 27, 2013. Principal payments would be deferred and payable on October 1, 2013, provided both of these conditions were met. This amendment also included an additional restructuring fee of $10,000 that would be due upon loan maturity currently scheduled for October 1, 2014.

In September 2013, the Company and lender agreed to further amend the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more on or before August 28, 2013 and another $500,000 or more on or before October 28, 2013. Principal payments would be deferred until December 1, 2013. This amendment also includes an additional $10,000 in restructuring fees that would be due upon maturity currently scheduled for October 1, 2014.

In November 2013, the Company and lender agreed to further amend the loan and security agreement to defer an additional 2 months of principal payments contingent upon the receipt of bridge loan proceeds of $500,000 or more on or before December 27, 2013 and upon the consummation of a 2014 equity event requiring the receipt of not less than $7 million in net cash proceeds by no later than January 24, 2014. Principal payments would be deferred until February 1, 2014. This amendment also includes an additional $10,000 in restructuring fees or $55,000 in total as of December 31, 2013 that will be due upon loan maturity currently scheduled for October 1, 2014. The Company recorded $27,288 as additional interest expense during the year ended December 31, 2013 related to the $55,000 restructuring payment. The Company will continue to accrue the balance of the $55,000 cash restructuring payment over the remaining term of the loan using the effective interest rate method. As of December 31, 2013, $27,288 was recorded as accrued liabilities on the balance sheets relating to this payment.

The Agreement contains a material adverse change clause, as defined in the agreement, which would result in an event of default if the bank deems a material adverse change to have occurred to the Company’s business. The continuing liquidity issues the Company faces could be construed by note holder as a material adverse change which could trigger an acceleration of all of the outstanding debt. As such, the Company has classified all of its outstanding debt balance as a current liability as of December 31, 2013.

As of December 31, 2013, future minimum payments under the note payable are as follows:

Year ending December 31, 2014	$	1,597,196
Less: Amount representing interest		(125,398	)
Present value of obligations		1,471,798
Less: Unamortized debt discount		(8,554	)
		1,463,244
Less: Notes payable, current portion		1,463,244
Notes payable, noncurrent portion	$	-

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Note 4 - Balance Sheet Components (Details) - Property and Equipment, Net (USD $)	Sep. 30, 2014	Dec. 31, 2013	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross		$ 321,879	$ 259,803
Less: Accumulated depreciation and amortization		(194,355)	(131,176)
Net property and equipment	191,663	127,524	128,627
Medical Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross		276,443	215,639
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross		32,143	30,871
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross		$ 13,293	$ 13,293

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Note 10 - Summary of Stock Options (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2014

Dec. 31, 2013

Note 10 - Summary of Stock Options (Tables) [Line Items]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Outstanding Options
						Weighted-
				Weighted-		Average
	Number			Average		Remaining
	of			Exercise		Contractual
	Shares			Price		Term (years)
Options outstanding as of December 31, 2013		363,413		$	2.94		8.80
Options granted		1,901,476		$	0.60
Options assumed from PLC		68,238		$	10.24
Options canceled		(38,593	)	$	1.75
Options outstanding as of September 30, 2014		2,294,534		$	1.02		9.67

				Outstanding Options
									Weighted-
	Shares						Weighted-		Average
	Available			Number			Average		Remaining
	for			of			Exercise		Contractual
	Grant			Shares			Price		Term (years)
Shares reserved at plan inception		1,000,000			-		$	-
Options granted		(51,500	)		51,500			0.001
Balances as of December 31, 2006		948,500			51,500			0.001		9.96
Additional shares reserved		2,000,000			-			-
Options granted		(867,000	)		867,000			0.06
Options forfeited		5,000			(5,000	)		0.001
Balances as of December 31, 2007		2,086,500			913,500			0.06		9.82
Options granted		(72,500	)		72,500			0.06
Balances as of December 31, 2008		2,014,000			986,000			0.06		8.87
Options granted		(1,892,029	)		1,892,029			0.06
Options exercised		-			(322,395	)		0.06
Options forfeited		377,605			(377,605	)		0.06
Balances as of December 31, 2009		499,576			2,178,029			0.06		9.00
Additional shares reserved		461,957			-			-
Options granted		(771,412	)		771,412			0.05
Options exercised		-			(173,455	)		0.001
Options forfeited		12,500			(12,500	)		0.06
Balances as of December 31, 2010		202,621			2,763,486			0.06		8.40
Additional shares reserved		500,000			-			-
Options granted		(345,000	)		345,000			0.12
Options exercised		-			(9,000	)		0.001
Options forfeited		139,000			(139,000	)		0.06
Repurchase of restricted stock options		5,250			-
Balances as of December 31, 2011		501,871			2,960,486			0.07		7.70
Additional shares reserved		80,000,000			-			-
Options granted		(43,694,521	)		43,694,521			0.01
Options exercised		-			(1,866,903	)		0.07
Balances as of December 31, 2012		36,807,350			44,788,104			0.01		9.74
Options granted		(11,873,890	)		11,873,890			0.01
Options cancelled		11,515,876			(11,515,876	)		0.01
Balances as of December 31, 2013		36,449,336			45,146,118		$	0.01		8.80
Options vested and expected to vest as of December 31, 2013					43,338,910		$	0.01		8.80
Options vested as of December 31, 2013					15,025,985		$	0.02		8.60

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

			Options Outstanding						Options Exercisable
							Weighted-
			Number		Weighted-		Average		Number		Weighted-
			Outstanding		Average		Remaining		Exercisable		Average
Range of			as of		Exercise		Contractual		as of		Exercise
Exercise Prices			September 30, 2014		Price		Term (Years)		September 30, 2014		Price
	$0.12			320	$	0.12		2.21		320	$	0.12
	$0.60			1,901,476	$	0.60		10.00		20,000	$	0.60
	$1.24			314,036	$	1.24		8.15		314,036	$	1.24
$7.00	-	$9.00		59,372	$	8.63		8.28		59,372	$	8.63
$12.00	-	$18.63		19,081	$	15.29		6.79		19,081	$	15.29
	$37.00			250	$	37.00		3.72		250	$	37.00
				2,294,535	$	1.02		9.67		413,059	$	2.94

		Options Outstanding				Options Vested
				Weighted-
				Average				Weighted-
				Remaining				Average
Exercise		Number		Contractual		Number		Exercise
Price		Outstanding		Life (Years)		of Options		Price
$	0.001		40,000		2.95		40,000	$	0.001
	0.06		980,250		5.68		921,104		0.06
	0.15		514,833		7.94		447,055		0.15
	0.01		43,611,035		8.89		13,617,826		0.01
			45,146,118		8.80		15,025,985	$	0.02

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	Nine Months Ended
	September 30,
	2014		2013
Expected term (in years)		5		5
Average volatility		61%		67%
Risk-free interest rate		1.80%		0.87%
Dividend yield		0%		0%

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Research and development	$	101	$	976	$	667	$	(7,016	)
General and administrative		113,245		15,308		142,976		73,017
Total	$	113,346	$	16,284	$	143,643	$	66,001

Employee Stock Option [Member]

Note 10 - Summary of Stock Options (Tables) [Line Items]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

							Cumulative for the Period
							September 21, 2005
							(Date of Inception) to
	2012			2013			December 31, 2013
Expected term (in years)		5.00			5.00			5.00 - 6.25
Expected volatility		68	%		67	%		60% - 79	%
Risk-free interest rate		0.76% - 0.84	%		0.84	%		0.76% - 4.7	%
Dividend yield		0	%		0	%		0	%

Nonemployee Stock Option [Member]

Note 10 - Summary of Stock Options (Tables) [Line Items]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

					Cumulative for the Period
					September 21, 2005
					(Date of Inception) to
	2012		2013		December 31, 2013
Contractual term (in years)		4 - 10		3 - 10		3 - 10
Expected volatility		68%		67%		60% - 79%
Risk-free interest rate		0.72% - 1.78%		0.78% - 3.04%		0.56% - 4.7%
Dividend yield		0%		0%		0%

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Note 5 - Note Payable (Details) (USD $)	1 Months Ended									9 Months Ended		12 Months Ended		51 Months Ended	1 Months Ended												9 Months Ended	1 Months Ended	0 Months Ended	1 Months Ended													3 Months Ended	9 Months Ended	12 Months Ended			1 Months Ended	9 Months Ended	1 Months Ended
	Sep. 23, 2014	Apr. 30, 2012	Sep. 30, 2014	Dec. 31, 2013	Dec. 30, 2013	Dec. 31, 2012	Apr. 30, 2012 April 2012 Warrants [Member]	Dec. 31, 2008 December 2008 Warrants [Member]	Nov. 30, 2010 November 2010 Warrants [Member]	Sep. 30, 2014 Related to Final Payment [Member] April 2012 Term Loan [Member]	Sep. 30, 2013 Related to Final Payment [Member] April 2012 Term Loan [Member]	Dec. 31, 2013 Related to Final Payment [Member] April 2012 Term Loan [Member]	Dec. 31, 2012 Related to Final Payment [Member] April 2012 Term Loan [Member]	Dec. 31, 2013 Related to Final Payment [Member] April 2012 Term Loan [Member]	Feb. 28, 2013 Bridge Loans on or before April 30, 2013 [Member] April 2012 Term Loan [Member] Minimum [Member]	Feb. 28, 2013 Bridge Loans on or before April 30, 2013 [Member] April 2012 Term Loan [Member] Maximum [Member]	May 31, 2013 Bridge Loans on or before September, 2013 [Member] April 2012 Term Loan [Member]	Sep. 30, 2013 Bridge Loans on or before August 28, 2103 [Member] April 2012 Term Loan [Member]	Jul. 31, 2013 Bridge Loans on or before August 28, 2103 [Member] April 2012 Term Loan [Member]	Sep. 30, 2013 Bridge Loans on or before August 28, 2103 [Member] November 2010 Term Loan [Member]	Sep. 30, 2013 Bridge Loans on or before October 28, 2013 [Member] April 2012 Term Loan [Member]	Sep. 30, 2013 Bridge Loans on or before October 28, 2013 [Member] November 2010 Term Loan [Member]	Nov. 30, 2013 Bridge Loan on or before December 27, 2013 [Member] April 2012 Term Loan [Member]	Jan. 31, 2014 Bridge Loans on or before February 25, 2014 [Member] April 2012 Term Loan [Member]	Feb. 28, 2014 Bridge Loans on or before April 25, 2014 [Member] April 2012 Term Loan [Member]	Feb. 28, 2014 Amendment to the January 2014 Amendment [Member] April 2012 Term Loan [Member] Maximum [Member]	Sep. 30, 2014 Related to the Restructuring Payment [Member] April 2012 Term Loan [Member]	May 30, 2013 Bridge Loans on or Before June 30, 2013 [Member] April 2012 Term Loan [Member]	Oct. 01, 2014 First Tranche [Member] September 2014 Term Loan [Member]	Jun. 30, 2014 April 2012 Term Loan [Member] Maximum [Member]	Feb. 28, 2014 April 2012 Term Loan [Member] Maximum [Member]	Jan. 31, 2014 April 2012 Term Loan [Member] Maximum [Member]	Jun. 30, 2014 April 2012 Term Loan [Member]	Feb. 28, 2014 April 2012 Term Loan [Member]	Jan. 31, 2014 April 2012 Term Loan [Member]	Nov. 30, 2013 April 2012 Term Loan [Member]	Sep. 30, 2013 April 2012 Term Loan [Member]	Jul. 31, 2013 April 2012 Term Loan [Member]	May 30, 2013 April 2012 Term Loan [Member]	May 31, 2013 April 2012 Term Loan [Member]	Feb. 28, 2013 April 2012 Term Loan [Member]	Apr. 30, 2012 April 2012 Term Loan [Member]	Sep. 30, 2014 April 2012 Term Loan [Member]	Sep. 30, 2013 April 2012 Term Loan [Member]	Dec. 31, 2013 April 2012 Term Loan [Member]	Dec. 30, 2013 April 2012 Term Loan [Member]	Dec. 31, 2012 April 2012 Term Loan [Member]	Sep. 30, 2014 September 2014 Term Loan [Member]	Sep. 30, 2014 September 2014 Term Loan [Member]	Dec. 31, 2008 December 2008 Term Loan [Member]	Nov. 30, 2010 November 2010 Term Loan [Member]	Dec. 31, 2013 November 2010 Term Loan [Member]	Dec. 31, 2012 November 2010 Term Loan [Member]	Dec. 31, 2013 Minimum [Member]	Dec. 31, 2013 Maximum [Member]
Note 5 - Note Payable (Details) [Line Items]
Debt Instrument, Face Amount																																										$ 2,135,159						$ 5,000,000	$ 5,000,000	$ 1,500,000	$ 2,000,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)	940,189			16,680,324	16,680,324	16,680,324	73,770	196,721	163,934																																							471,698	471,698
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)	$ 0.53			$ 0.06			$ 0.61	$ 0.61	$ 0.61																																							$ 0.53	$ 0.53					$ 0.04	$ 0.44
Debt Instrument, Repayment of Principal and Interest, Number of Installments		30																																								30
Debt Instrument, Interest Rate, Stated Percentage																																										9.50%								8.50%	9.50%
Additional Percentage of Principal Owed Upon Final Payment																																										4.00%
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid																																										85,000								75,000	80,000
Interest Expense, Debt										8,528	28,785	35,345	41,127	76,472													20,212																		27,288
Accrued Loan Balloon Payment			85,000	76,472																																							85,000		76,472	76,472	41,172
Notes Payable, Current			1,471,799	1,463,244	1,462,244	1,581,390
Contingent Bridge Loan Proceeds															500,000	1,500,000	500,000	500,000	500,000	500,000	500,000	500,000	500,000	500,000	500,000			500,000
Debt Instrument, Restructuring Fee																										5,000				15,000	20,000	15,000	5,000	5,000	5,000	10,000	10,000	10,000	10,000	10,000	15,000		47,500	45,000
Contingent Equity Event Proceeds																																				7,000,000		10,000,000
Accrued Debt Restructuring Costs			47,500	27,288																																							47,500		55,000	27,288
Proceeds from Issuance of Debt																													2,500,000
Repayments of Debt																													1,630,925
Warrant Term	5 years																																															10 years	10 years
Debt Instrument, Term																																																		27 months	36 months
Debt Instrument, Covenant Terms, Additional Equity Financing																																																		6,000,000
Notes Payable			1,471,799	1,463,244																																									1,471,798		1,606,612					0	0
Accrued Liabilities, Current			$ 387,538	$ 516,152		$ 345,644																																							$ 27,288

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Accounting Policies, by Policy (Policies)

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with US GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and the related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. In addition, any change in these estimates or their related assumptions could have an adverse effect on our operating results.

Reclassification, Policy [Policy Text Block]

Reclassifications

Certain prior year financial statement amounts have been reclassified to conform to the current year’s presentation. These reclassifications had no impact on previously reported total assets, stockholders’ deficit or net loss.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

The Company recognizes revenue from the sale of its product, the Viveve® System, and single-use treatment tips. Revenue is recognized upon delivery, provided that persuasive evidence of an arrangement exists, the price is fixed or determinable and collection of the resulting receivable is reasonably assured. Sales of Viveve’s products are subject to regulatory requirements that vary from country to country. The Company has regulatory clearance outside the U.S. and currently sells the Viveve System in Canada, Hong Kong and Japan.

The Company does not provide its customers with a contractual right of return.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued and Adopted Accounting Standards

In May 2014, as part of its ongoing efforts to assist in the convergence of US GAAP and International Financial Reporting Standards (“IFRS”), the Financial Accounting Standards Board (“FASB”)  issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606).” The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The ASU provides alternative methods of initial adoption and is effective for annual and interim periods beginning after December 15, 2016. We are currently evaluating the impact that this standard will have on our condensed consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12, “Compensation — Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved After a Requisite Service Period” (“ASU 2014-12”). Companies commonly issue share-based payment awards that require a specific performance target to be achieved in order for employees to become eligible to vest in the awards. ASU 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period should be treated as a performance condition. The performance target should not be reflected in estimating the grant date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved. ASU 2014-12 will be effective for the Company’s fiscal years beginning fiscal 2016 and interim reporting periods within that year, using either the retrospective or prospective transition method. Early adoption is permitted. We are currently evaluating the effect of the adoption of this guidance on our condensed consolidated financial statements.

In June 2014, the FASB issued ASU 2014-10,  “Development Stage Entities (Topic 915):  Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in topic 810, Consolidation” (“ASU 2014-10”). ASU 2014-10 removes the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. ASU 2014-10 also eliminates the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. The amendments in ASU 2014-10 will be effective retrospectively except for the clarification to Topic 275, which shall be applied prospectively for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued. We elected to early adopt the provisions of ASU 2014-10 in the second quarter of 2014.

In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 310-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”), to provide guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Since ASU 2014-15 only impacts financial statement disclosure requirements regarding whether there is  substantial doubt about an entity’s ability to continue as a going concern, we do not expect its adoption to have an impact on our ccondensed onsolidated financial statements.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration of Credit Risk and Other Risks and Uncertainties

To achieve profitable operations, the Company must successfully develop, manufacture, and market its products. There can be no assurance that any such products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products will be successfully marketed. These factors could have a material adverse effect upon the Company’s financial results, financial position, and future cash flows.

The Company’s future products may require approval from the U.S. Food and Drug Administration or other international regulatory agencies prior to commencing commercial sales. There can be no assurance that the Company’s future products will receive any of these required approvals. If the Company was denied such approvals or such approvals were delayed, it would have a material adverse impact on the Company’s financial results, financial position and future cash flows.

The Company is subject to risks common to companies in the medical device industry including, but not limited to, new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, uncertainty of market acceptance of products, product liability, and the need to obtain additional financing. The Company’s ultimate success is dependent upon its ability to raise additional capital and to successfully develop and market its products.

During the nine months ended September 30, 2014, three customers accounted for 94% of the Company’s revenue.

During the nine months ended September 30, 2013, one customer accounted for 100% of the Company’s revenue.

During the three months ended September 30, 2014, two customers accounted for 79% of the Company’s revenue.

During the three months ended September 30, 2013, one customer accounted for 100% of the Company’s revenue.

Inventory, Policy [Policy Text Block]

Inventory

Inventory is stated at the lower of cost or market, cost being determined on an actual cost basis on a first-in, first-out basis and market being determined as the lower of replacement cost or net realizable value.

Standard Product Warranty, Policy [Policy Text Block]

Product Warranty

The Company’s products are generally subject to a one year warranty, which provides for the repair, rework or replacement of products (at its option) that fail to perform within stated specification. The Company has assessed the historical claims and, to date, product warranty claims have not been significant. The Company will continue to assess if there should be a warranty accrual.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Loss

Comprehensive loss represents the changes in equity of an enterprise, except those resulting from stockholder transactions. Accordingly, comprehensive loss may include certain changes in equity that are excluded from net loss. For the three and nine months ended September 31, 2014 and 2013, the Company’s comprehensive loss is the same as its net loss. There were no components of comprehensive loss for any of the periods presented.

Earnings Per Share, Policy [Policy Text Block]

Net Loss per Share Attributable to Common Stockholders

The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding for the period. The diluted net loss per share attributable to common stockholders is computed by giving effect to all potentially dilutive common stock equivalents outstanding for the period. For purposes of this calculation, options and warrants to purchase common stock are considered common stock equivalents. For periods in which the Company has reported net losses, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Potential common shares will always be anti-dilutive for periods in which the Company has reported a net loss. Diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders for the three and nine months ended September 30, 2014 and 2013.

For the three and nine months ended September 30, 2014 and 2013, the following weighted average common stock equivalent shares were excluded from the calculation of net loss per share because the inclusion would be anti-dilutive.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Stock options to purchase common stock		476,671		409,488		445,804		491,609
Warrants to purchase common stock		72,322		-		24,107		-
		548,993		409,488		469,911		491,609