12.	Summary of Stock Options

Stock Option Plans

The Company has issued equity awards in the form of stock options and restricted stock awards (“RSAs”) from

two

employee benefit plans. The plans include the Viveve Amended and Restated

2006

Stock Plan (the

“2006

Plan”) and the Company's Amended and Restated

2013

Stock Option and Incentive Plan (the

“2013

Plan”).

As of

September 30, 2020,

there were outstanding stock option awards issued from the

2006

Plan covering a total of

104

shares of the Company's common stock and

shares are available for future awards. The weighted average exercise price of the outstanding stock options is

$992.00

per share and the weighted average remaining contractual term is

2.3

years.

As of

September 30, 2020,

there were outstanding stock option awards issued from the

2013

Plan covering a total of

9,755,350

shares of the Company's common stock and there remain reserved for future awards

4,770,640

shares of the Company's common stock. The weighted average exercise price of the outstanding stock options is

$1.95

per share, and the remaining contractual term is

9.1

years.

January 2020,

the board of directors approved the

2020

evergreen provision increasing the total stock reserved for issuance under the

2013

Plan by

2,639,926

shares from

11,872,531

shares to a total of

14,512,457

shares, which was effective

January 1, 2020.

Activity under the

2006

Plan and the

2013

Plan is as follows:

	Nine Months Ended September 30, 2020
						Weighted
				Weighted		Average
	Number			Average		Remaining		Aggregate
	of			Exercise		Contractual		Intrinsic
	Shares			Price		Term (years)		Value
Options outstanding, beginning of period		10,087,678		$	2.22		9.9	$	3,928,715
Options granted		1,018,000		$	0.70
Options exercised		-
Options canceled		(1,350,224	)	$	3.01
Options outstanding, end of period		9,755,454		$	1.96		9.1	$	-

Vested and exercisable and expected to vest, end of period		9,047,744		$	2.03		9.1	$	-

Vested and exercisable, end of period		1,969,073		$	5.19		8.7	$	-

The aggregate intrinsic value reflects the difference between the exercise price of the underlying stock options and the Company's closing share price as of

September 30, 2020.

The options outstanding and exercisable as of

September 30, 2020

were as follows:

							Weighted
			Number		Weighted		Average		Number		Weighted
			Outstanding		Average		Remaining		Exercisable		Average
Range of			as of		Exercise		Contractual		as of		Exercise
Exercise Prices			September 30, 2020		Price		Term (Years)		September 30, 2020		Price

$0.52	-	$0.89		9,563,606	$	0.85		9.1		1,918,010	$	0.87
$1.09	-	$1.36		155,000	$	1.26		9.4		25,000	$	1.36
$38.00	-	$58.00		1,250	$	55.20		8.7		1,115	$	56.99
$100.00	-	$197.00		19,996	$	142.17		8.0		11,956	$	144.84
$202.00	-	$283.00		725	$	250.69		7.3		451	$	253.26
$311.00	-	$358.00		1,875	$	343.99		7.9		1,505	$	346.28
$430.00	-	$497.00		6,443	$	454.44		6.4		4,935	$	455.06
$501.00	-	$567.00		3,139	$	537.25		6.2		2,777	$	536.54
$600.00	-	$661.00		1,379	$	601.64		5.1		1,379	$	601.64
$700.00	-	$792.00		1,937	$	767.72		6.1		1,841	$	767.15
$992.00	-	$992.00		104	$	992.00		2.3		104	$	992.00
Total:				9,755,454	$	1.96		9.1		1,969,073	$	5.19

Restricted Stock Awards

During the

three

and

nine

months ended

September 30, 2020,

RSAs for shares of common stock under the

2013

Plan were granted by the Company.

June 2020,

the Company issued

250

shares of common stock to a consultant in connection with the annual vesting of an RSA granted to the consultant in

June 2018.

July 2019,

the Company issued

378

shares of common stock under the

2013

Plan to members of the Company's board of directors with a weighted average grant date fair value of

$38.08

per share, based on the market price of the Company's common stock on the award date. The RSAs were fully vested on the date of grant and

378

shares of common stock were issued.

June 2019,

the Company issued

250

shares of common stock to a consultant in connection with the annual vesting of an RSA granted to the consultant in

June 2018.

April 2019,

the Company issued

525

shares of common stock under the

2013

Plan to board members as director compensation with a weighted average grant date fair value of

$91.00

per share, based on the market price of the Company's common stock on the award date. The RSAs were fully vested on the date of grant and

525

shares of common stock were issued.

January 2019,

the Company granted RSAs for

3,625

shares of common stock under the

2013

Plan to employees as part of their

2018

annual performance bonuses. The bonuses for

2018

performance were paid

50%

in cash and

50%

in the form of RSAs that will vest in full upon FDA approval of the Viveve System for improvement of sexual function or stress urinary incontinence in the United States. During the

nine

months ended

September 30, 2020,

153

shares pursuant to these RSAs were cancelled. As of

September 30, 2020,

there are

2,217

remaining shares and

zero

shares were vested and issued.

As of

September 30, 2020,

there were a total of

2,217

shares of unvested restricted stock awards outstanding that had been granted pursuant to RSAs.

2017

Employee Stock Purchase Plan

The activity of the Company's

2017

ESPP for the

nine

months ended

September 30, 2020

is described as follows:

The

tenth

offering period under the Company's

2017

ESPP began on

January 1, 2020

and ended on

March 31, 2020,

and

320

shares were issued on

March 31, 2020

at a purchase price of

$0.59.

The

eleventh

offering period under the Company's

2017

ESPP began on

April 1, 2020

and ended on

June 30, 2020,

and

300

shares were issued on

June 30, 2020

at a purchase price of

$0.48.

The

twelfth

offering period under the Company's

2017

Employee Stock Purchase Plan (the

“2017

ESPP”) began on

July 1, 2020,

and ended on

September 30, 2020,

and

220

shares were issued on

September 30, 2020

at a purchase price of

$0.44.

September 2020,

the board of directors approved the suspension of the Company's

2017

ESPP following the

twelfth

offering period and the ESPP purchase on

September 30, 2020.

As of

September 30, 2020,

the remaining shares available for issuance under the

2017

ESPP were

252

shares.

The Company estimates the fair value of purchase rights under the ESPP using a Black-Scholes valuation model. The fair value of each purchase right was estimated on the date of grant using the Black-Scholes option valuation model and the straight-line attribution approach with the following weighted-average assumptions:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019

Expected term (in years)		0.25		0.25		0.25		0.25
Average volatility		76%		98%		106%		84%
Risk-free interest rate		0.14%		2.21%		0.66%		2.40%
Dividend yield		0%		0%		0%		0%

The weighted average grant date fair value of the purchase rights issued under the

2017

ESPP during the

three

and

nine

months ended

September 30, 2020,

was

$0.17

and

$0.29,

respectively. The weighted average grant date fair value of the purchase rights issued under the

2017

ESPP during the

three

and

nine

months ended

September 30, 2019

was

$13.16

and

$2.12,

respectively.

Stock-Based Compensation

During the

three

ended

September 30, 2020,

the Company granted stock options to employees and nonemployees to purchase

550,000

shares of common stock with a weighted average grant date fair value of

$0.36

per share. There were

stock options granted during the

three

months ended

September 30, 2019.

During the

three

ended

September 30, 2020,

the Company granted stock options to employees and nonemployees to purchase

1,018,000

shares of common stock with a weighted average grant date fair value of

$0.44

per share. During the

nine

months ended

September 30, 2019,

the Company granted stock options to employees to purchase

23,069

shares of common stock, with a weighted average grant date fair value of

$117.86.

There were

stock options exercised during the

three

and

nine

months ended

September 30, 2020

and

2019.

The Company estimated the fair value of stock options using the Black-Scholes option pricing model. The fair value of employee and nonemployee 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 weighted average assumptions:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019

Expected term (in years)		5		N/A		5		5
Average volatility		87%		N/A		81%		73%
Risk-free interest rate		0.27%		N/A		0.34%		2.49%
Dividend yield		-		N/A		-		-

Option-pricing models require the input of various subjective assumptions, including the option's expected life and the price volatility of the underlying stock. The expected stock price volatility is based on analysis of the Company's stock price history over a period commensurate with the expected term of the options, trading volume of comparable companies' stock, look-back volatilities and the Company specific events that affected volatility in a prior period. The expected term of 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.

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, 2020

and

2019

(in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019

Cost of revenue	$	42	$	25	$	163	$	91
Research and development		78		41		250		134
Selling, general and administrative		522		452		1,596		1,409
Total	$	642	$	518	$	2,009	$	1,634

As of

September 30, 2020,

the total unrecognized compensation cost in connection with unvested stock options was approximately

$5,469,000.

These costs are expected to be recognized over a period of approximately

2.6

years.