Note 11 - Common Stock

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

11. Common Stock

Purchase Agreement with Lincoln Park Capital, LLC

The Company previously entered into the Purchase Agreement with LPC, which provided that the Company had the right, in its sole discretion, to sell to LPC, and LPC has committed to purchase from us up to $10,000,000 of our common stock, subject to certain limitations, from time to time over a 30-month term of the Purchase Agreement.

The Purchase Agreement limited the Company’s sale of shares of common stock to LPC to 301,762 shares of common stock, representing 19.99% of the shares of the common stock outstanding on the date of the Purchase Agreement unless (i) shareholder approval was obtained to issue more than such amount or (ii) the average price of all applicable sales of common stock to LPC under the Purchase Agreement equaled or exceeded $6.46 per share. On June 9, 2020, LPC purchased 52,500 shares of common stock at a price per share of $6.50 (the “Initial Purchase Shares”) under the Purchase Agreement for gross proceeds of approximately $341,000. Transaction costs in connection with the Purchase Agreement with LPC totaled approximately $494,000.

On March 31, 2021, the Company and LPC entered into the first amendment to the Purchase Agreement. The amendment limited the Company’s sale shares of common stock to LPC from the date thereof to 2,068,342 shares of shares of common stock, representing 19.99% of the shares of the common stock outstanding on the date of amendment unless (i) shareholder approval is obtained to issue more than such amount or (ii) the average price of all applicable sales of common stock to LPC under the Purchase Agreement, as amended equals or exceeds $2.99 per share, which represents the lower of (a) the closing price of the common stock on the Nasdaq Capital Market immediately preceding the date of the Amendment or (b) the average of the closing prices of our common stock on the Nasdaq Capital Market for the five business days immediately preceding the date of the Amendment, as calculated in accordance with Nasdaq Rules. Transaction costs in connection with the amendment to Purchase Agreement with LPC totaled approximately $70,000.

On May 4, 2021, pursuant to the provisions under the Purchase Agreement as amended, LPC purchased 250,000 shares of common stock at price per share of $2.817 for gross proceeds of approximately $704,000.

On June 23, 2021, the Company’s stockholders approved the proposal for the potential issuance of 20% or more of the Company’s outstanding common stock to LPC pursuant to the provisions under the Purchase Agreement, as amended.

As of March 31, 2022, the equity facility with LPC has a remaining financing commitment of approximately $9,000,000.

2021 Public Offering

On January 19, 2021, the Company closed the January 2021 Offering for gross proceeds of approximately $27,600,000, which included the exercise of the underwriter’s over-allotment option to purchase additional shares and warrants, prior to deducting underwriting discounts and commissions and offering expenses payable by Viveve Medical.

The offering comprised of: (1) 4,607,940 Class A Units, priced at a public offering price of $3.40 per Class A Unit, with each unit consisting of one share of common stock and one warrant to purchase one share of common stock, at an exercise price of $3.40 per share that expires on the fifth anniversary of the date of issuance; and (2) 2,450,880 Class B Units, priced at a public offering price of $3.40 per Class B Unit, with each unit consisting of one share of Series C convertible preferred stock and one warrant to purchase one share of common stock, at an exercise price of $3.40 per share that expires on the fifth anniversary of the date of issuance. The underwriter exercised an over-allotment option to purchase an additional 1,058,820 shares of common stock and warrants to purchase 1,058,820 shares of common stock in the offering. The net proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses payable by the Company, were approximately $25,122,000.

A total of 2,450,880 shares of Series C convertible preferred stock were issued in the January 2021 Offering. In January 2021, all Series C convertible preferred stock were converted into common stock and there are no remaining shares of Series C convertible preferred stock outstanding.

Warrants to purchase a total of 8,117,640 shares of common stock were issued in the January 2021 Offering. In February and March 2021, holders exercised January 2021 warrants to purchase 12,760 shares of common stock for aggregate exercise proceeds to the Company of approximately $43,000. As of March 31, 2022, there were January 2021 warrants to purchase a total of 8,104,880 shares of common stock still remaining and outstanding.

Restricted Common Shares

There were no restricted common shares issued during the three months ended March 31, 2022 and 2021. 

Warrants for Common Stock

As of March 31, 2022, outstanding warrants to purchase shares of common stock were as follows: 

					Number of
					Shares
					Outstanding
	Exercisable	Expiration	Exercise		Under
Issuance Date	for	Date	Price		Warrants
February 2015	Common Shares	February 17, 2025	$	4,000.00		79
March 2015	Common Shares	March 26, 2025	$	2,720.00		2
May 2015	Common Shares	May 12, 2025	$	4,240.00		37
December 2015	Common Shares	December 16, 2025	$	5,600.00		31
April 2016	Common Shares	April 1, 2026	$	6,080.00		25
June 2016	Common Shares	June 20, 2026	$	4,980.00		101
May 2017	Common Shares	May 25, 2027	$	9,500.00		223
November 2019	Common Shares	November 26, 2024	$	18.36		989,379
November 2019	Common Shares	November 26, 2024	$	2.82		285,632
April 2020	Common Shares	April 21, 2025	$	2.82		413,210
January 2021	Common Shares	January 19, 2026	$	3.40		8,104,880
						9,793,599

In connection with the 2017 Loan Agreement, the Company issued warrants to purchase a total of 223 shares of common stock at an exercise price of $9,500.00 per share. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part. The fair value of the warrants, along with financing and legal fees, are recorded as debt issuance costs and presented on the condensed consolidated balance sheets as a deduction from the carrying amount of the note payable. The debt issuance costs are amortized to interest expense over the loan term. During the three months ended March 31, 2022 and 2021, the Company recorded $1,000 and $1,000, respectively, of interest expense relating to the debt issuance costs using the effective interest method. As of March 31, 2022, the unamortized debt discount was $4,000.

In connection with the January 2021 Offering, warrants to purchase up to 8,117,640 shares of common stock were issued in the offering. The warrants to purchase one share of common stock have an exercise price of $3.40 per share and expire on the fifth anniversary of the date of issuance.

As a result of the closing of the January 2021 Offering at an effective price of $3.40 per share of its common stock, the per share exercise price of our previously issued Series B, A-2 and B-2 common stock warrants was automatically reduced pursuant to the terms of the warrants. The exercise price for Series B warrants was reduced from $6.10 per share to $3.40 per share. The exercise price for Series A-2 and B-2 warrants was reduced from $6.371 per share to $3.40 per share. There was no change to the quantity of warrant shares. The Company determined the incremental fair value on Series B, A-2 and B-2 warrants due to the reduction of exercise price on the date of such modification to be approximately $287,000 using the Black-Scholes option pricing model. Assumptions used were as follows: 

	Immediately			Immediately
Series B Warrants	before Modification			After Modification
Exercise price	$	6.10		$	3.40
Common stock price	$	3.19		$	3.19
Expected term (in years)		3.9			3.9
Average volatility		90	%		90	%
Risk-free interest rate		0.33	%		0.33	%
Dividend yield		0	%		0	%

	Immediately			Immediately
Series A-2 and B-2 Warrants	before Modification			After Modification
Exercise price	$	6.37		$	3.40
Common stock price	$	3.19		$	3.19
Expected term (in years)		4.3			4.3
Average volatility		90	%		90	%
Risk-free interest rate		0.33	%		0.33	%
Dividend yield		0	%		0	%

The incremental fair value of the Series B, A-2 and B-2 warrants is included in other income (expense) on the condensed consolidated statement of operations and comprehensive loss, with a corresponding increase to additional paid-in capital on the condensed consolidated balance sheet.

In February 2021, a total of 40,000 shares of common stock were issued in connection with the exercise of Series B warrants for gross proceeds of approximately $136,000 and a total of 8,760 shares of common stock were issued in connection with the exercise of January 2021 warrants for gross proceeds of approximately $30,000.

In March 2021, a total of 4,000 shares of common stock were issued in connection with the exercise of January 2021 warrants for gross proceeds of approximately $13,000.

No shares issuable pursuant to warrants have been cancelled during the three months ended March 31, 2022 and 2021.

No shares issuable pursuant to warrants expired during the three months ended March 31, 2022 and 2021.

As of Marcher 31, 2022, there were no Series A warrants to purchase shares of common stock and Series B warrants to purchase a total of 285,632 shares of common stock outstanding.

As of March 31, 2022, there were Series A-2 warrants to purchase a total of 392,830 shares of common stock and Series B-2 warrants to purchase a total of 20,380 shares of common stock outstanding.

As of March 31, 2022, there were January 2021 warrants to purchase a total of 8,104,880 shares of common stock outstanding.