10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2019

OR

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

For the transition period from ______________ to _______________

Commission File Number 1-11388

VIVEVE MEDICAL, INC.

(Exact name of registrant as specified in its charter)

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

 345 Inverness Drive South

Building B, Suite 250

Englewood, CO 80112

(Address of principal executive offices)

(Zip Code)

(720) 696-8100

(Registrant’s telephone number, including area code)     

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

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

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

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

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

Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ☒
Emerging growth company ☐

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

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

As of November 6, 2019, the issuer had 1,477,529 shares of common stock, par value $0.0001 per share, outstanding.

TABLE OF CONTENTS

Note About Forward-Looking Statements
		Page  No.
PART I	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (unaudited)	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	38
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41
SIGNATURES		42

2

NOTE ABOUT FORWARD-LOOKING STATEMENTS 

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

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

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

3

PART I. FINANCIAL INFORMATION

ITEM 1.  Financial Statements (unaudited)  

VIVEVE MEDICAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	September 30,			December 31,
	2019			2018
	(unaudited)			(1)
ASSETS
Current assets:
Cash and cash equivalents	$	9,086		$	29,523
Accounts receivable, net of allowance for doubtful accounts of $543 and $284 as of September 30, 2019 and December 31, 2018, respectively		2,806			5,704
Inventory		4,141			4,119
Prepaid expenses and other current assets		3,051			2,558
Total current assets		19,084			41,904
Property and equipment, net		3,066			2,916
Investment in limited liability company		1,412			1,843
Other assets		587			171
Total assets	$	24,149		$	46,834
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	1,791		$	3,994
Accrued liabilities		4,457			6,766
Total current liabilities		6,248			10,760
Note payable, noncurrent portion		31,694			30,528
Other noncurrent liabilities		997			634
Total liabilities		38,939			41,922
Commitments and contingences (Note 8)
Stockholders’ equity (deficit):
Common stock, $0.0001 par value; 75,000,000 shares authorized as of September 30, 2019 and December 31, 2018; 1,469,789 and 463,630 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		-			-
Additional paid-in capital		168,304			160,297
Accumulated deficit		(183,094	)		(155,385	)
Total stockholders’ equity (deficit)		(14,790	)		4,912
Total liabilities and stockholders’ equity (deficit)	$	24,149		$	46,834

 (1) The condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited consolidated financial statements as of that date. 

Note: All share and per share data has been adjusted to reflect the 1-for-100 reverse stock split which became effective after market close on September 18, 2019, as discussed in Note 2.

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

4

VIVEVE MEDICAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
Revenue	$	1,052		$	4,821		$	5,116		$	14,045
Cost of revenue		1,099			3,327			3,981			8,390
Gross profit (loss)		(47	)		1,494			1,135			5,655
Operating expenses:
Research and development		1,449			3,442			6,831			10,870
Selling, general and administrative		5,032			9,114			17,188			27,482
Restructuring costs		-			-			742			-
Total operating expenses		6,481			12,556			24,761			38,352
Loss from operations		(6,528	)		(11,062	)		(23,626	)		(32,697	)
Interest expense, net		(1,209	)		(1,106	)		(3,519	)		(3,239	)
Other expense, net		(51	)		(4	)		(133	)		(14	)
Net loss from consolidated companies		(7,788	)		(12,172	)		(27,278	)		(35,950	)
Loss from minority interest in limited liability company		(168	)		(132	)		(431	)		(539	)
Comprehensive and net loss	$	(7,956	)	$	(12,304	)	$	(27,709	)	$	(36,489	)
Net loss per share:
Basic and diluted	$	(13.51	)	$	(39.07	)	$	(54.73	)	$	(123.41	)
Weighted average shares used in computing net loss per common share:
Basic and diluted		588,976			314,899			506,329			295,677

Note: All share and per share data has been adjusted to reflect the 1-for-100 reverse stock split which became effective after market close on September 18, 2019, as discussed in Note 2.

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

5

VIVEVE MEDICAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except share and per share data)

(unaudited)

	Common Stock,					Additional						Total
	$0.0001 par value					Paid-In			Accumulated			Stockholders’
	Shares			Amount		Capital			Deficit			Equity (Deficit)
Balances as of December 31, 2018		463,630		$	-	$	160,297		$	(155,385	)	$	4,912
Stock-based compensation expense		-			-		470			-			470
Issuance of common shares from employee stock purchase plan		429			-		35			-			35
Issuance of restricted common shares in connection with consulting agreement		274			-		25			-			25
Issuance of common shares in connection with restricted stock award to employee		6			-		1			-			1
Net loss		-			-		-			(10,029	)		(10,029	)
Balances as of March 31, 2019		464,339			-		160,828			(165,414	)		(4,586	)
Stock-based compensation expense		-			-		562			-			562
Issuance of common shares from employee stock purchase plan		602			-		20			-			20
Restricted stock awards issued to directors for quarterly compensation		527			-		48			-			48
Issuance of restricted common shares in connection with consulting agreement		250			-		11			-			11
Issuance of common shares in connection with restricted stock award to employee		6			-		-			-			-
Net loss		-			-		-			(9,724	)		(9,724	)
Balances as of June 30, 2019		465,724			-		161,469			(175,138	)		(13,669	)
August 2019 ATM Facility, net of issuance cost		1,004,171			-		6,322			-			6,322
Stock-based compensation expense		-			-		503			-			503
Issuance of common shares from employee stock purchase plan		200			-		1			-			1
Restricted stock awards issued to directors for quarterly compensation		378			-		14			-			14
Issuance of common shares in connection with restricted stock award to employee		4			-		-			-			-
Reverse stock split - cancellation and payout of fractional shares		(688	)		-		(5	)		-			(5	)
Net loss		-			-		-			(7,956	)		(7,956	)
Balances as of September 30, 2019		1,469,789		$	-	$	168,304		$	(183,094	)	$	(14,790	)

	Common Stock				Additional						Total
	$0.0001 par value				Paid-In			Accumulated			Stockholders’
	Shares		Amount		Capital			Deficit			Equity (Deficit)
Balances as of December 31, 2017		195,033	$	-	$	102,981		$	(105,581	)	$	(2,600	)
February 2018 Offering, net of issuance costs		115,000		-		32,225			-			32,225
November 2017 ATM Facility, net of issuance cost		2,082		-		1,011			-			1,011
Stock-based compensation expense		-		-		645			-			645
Issuance of restricted stock awards to directors and consultant		221		-		108			-			108
Issuance of common shares from employee stock purchase plan		207		-		65			-			65
Cumulative effect adjustment from adoption of new accounting standard – ASC 606		-		-		-			177			177
Net loss		-		-		-			(12,669	)		(12,669	)
Balances as of March 31, 2018		312,543		-		137,035			(118,073	)		18,962
November 2017 ATM Facility, net of issuance cost		652		-		171			-			171
February 2018 Offering issuance costs		-		-		(11	)		-			(11	)
Stock-based compensation expense		-		-		709			-			709
Issuance of common shares from employee stock purchase plan		256		-		59			-			59
Issuance of restricted stock awards to directors and consultant		208		-		67			-			67
Issuance of restricted common shares		1,000		-		256			-			256
Net loss		-		-		-			(11,516	)		(11,516	)
Balances as of June 30, 2018		314,659		-		138,286			(129,589	)		8,697
November 2017 ATM Facility, net of issuance cost		37		-		11			-			11
Stock-based compensation expense		-		-		698			-			698
Issuance of common shares from employee stock purchase plan		286		-		64			-			64
Issuance of restricted stock awards to directors and consultant		182		-		47			-			47
Issuance of restricted common shares		62		-		20			-			20
Net loss				-		-			(12,304	)		(12,304	)
Balances as of September 30, 2018		315,226	$	-	$	139,126		$	(141,893	)	$	(2,767	)

Note: All share and per share data has been adjusted to reflect the 1-for-100 reverse stock split which became effective after market close on September 18, 2019, as discussed in Note 2.

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

6

 VIVEVE MEDICAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Nine Months Ended
	September 30,
	2019			2018
Cash flows from operating activities:
Net loss	$	(27,709	)	$	(36,489	)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for doubtful accounts		260			103
Depreciation and amortization		819			545
Stock-based compensation		1,634			2,294
Fair value of common shares issued		-			256
Non-cash interest expense		1,266			1,176
Amortization of operating lease right-of-use assets and accretion of operating lease liabilities		4			-
Loss from minority interest in limited liability company		431			539
Loss on disposal of property and equipment		93			-
Changes in assets and liabilities:
Accounts receivable		2,638			1,119
Inventory		(236	)		(2,317	)
Prepaid expenses and other current assets		(493	)		61
Other noncurrent assets		40			1
Accounts payable		(2,203	)		(1,297	)
Accrued and other liabilities		(2,566	)		502
Other noncurrent liabilities		160			262
Net cash used in operating activities		(25,862	)		(33,245	)
Cash flows from investing activities:
Purchase of property and equipment		(848	)		(983	)
Net cash used in investing activities		(848	)		(983	)
Cash flows from financing activities:
Proceeds from sale of common stock, net of issuance costs		6,322			33,407
Proceeds from issuance of common shares from employee stock purchase plan		56			188
Transaction costs in connection with note payable		(100	)		-
Reverse stock split - cancellation and payout of fractional shares		(5	)		-
Net cash provided by financing activities		6,273			33,595
Net decrease in cash and cash equivalents		(20,437	)		(633	)
Cash and cash equivalents - beginning of period		29,523			20,730
Cash and cash equivalents - end of period	$	9,086		$	20,097
Supplemental disclosure:
Cash paid for interest	$	2,067		$	1,991
Cash paid for income taxes	$	-		$	2
Supplemental disclosure of cash flow information as of end of period:
Issuance of note payable in settlement of accrued interest	$	973		$	934
Net transfer of equipment between inventory and property and equipment	$	214		$	210
Supplemental cash flow information related to leases was as follows:
Operating cash outflows from operating leases	$	220
Right-of-use assets obtained in exchange for operating lease liabilities (upon adoption of ASC 842)	$	629

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

7

VIVEVE MEDICAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. The Company and Basis of Presentation

Viveve Medical, Inc. (“Viveve Medical”, the “Company”, “we”, “our”, or “us”) designs, develops, manufactures and markets a platform medical technology, which we refer to as Cryogen-cooled Monopolar RadioFrequency, or CMRF. Our proprietary CMRF technology is delivered through a radiofrequency generator, handpiece and treatment tip, which collectively, we refer to as the Viveve® System. Viveve Medical competes in the women’s intimate health industry in some countries by marketing the Viveve System as a way to improve the overall well-being and quality of life of women suffering from vaginal introital laxity, for improved sexual function, or stress urinary incontinence, depending on the relevant country-specific clearance or approval.  In the United States, the Viveve System is currently indicated for use in general surgical procedures for electrocoagulation and hemostasis.

ATM Equity Offerings

The Company established an “at-the-market” equity offering program through the filing of a prospectus supplement to its shelf registration statement on Form S-3, which was filed on August 16, 2019, under which the Company may offer and sell, from time-to-time, up to $6,760,000 aggregate offering price of shares of its common stock (the “August 2019 ATM Facility”). The Company’s offering of $6,760,000 of its common stock under the August 2019 ATM Facility was completed in late September 2019. During the three months ended September 30, 2019, the Company sold 1,004,171 shares of common stock under the August 2019 ATM Facility for net proceeds, after deducting sales commissions and other offering costs, of approximately $6,322,000. As of September 30, 2019, the Company had no remaining capacity to issue shares under the August 2019 ATM Facility.

The Company had previously established an “at-the-market” equity offering program through the filing of a prospectus supplement to its shelf registration statement on Form S-3, which was filed on November 8, 2017, under which the Company could offer and sell, from time-to-time, up to $25,000,000 aggregate offering price of shares of its common stock (the “November 2017 ATM Facility”). On August 16, 2019, the Company suspended and subsequently terminated the November 2017 ATM Facility pursuant to the prospectus supplement, dated November 7, 2017. The Company will no longer make any sales of its common stock under the November 2017 ATM Facility. During the three and nine months ended September 30, 2019, the Company sold zero shares of common stock under the November 2017 ATM Facility. During the three and nine months ended September 30, 2018, the Company sold 37 and 2,771 shares of common stock under the November 2017 ATM Facility for net proceeds of approximately $11,000 and $1,194,000, respectively. Through the closing of the November 2017 ATM Facility in August 2019, the Company sold 3,364 shares of common stock under the equity offering program for net proceeds, after deducting sales commissions and other offering costs, of approximately $1,318,000.

Public Offerings

 In December 2018, in connection with the closing of a public offering (the “December 2018 Offering”), the Company issued an aggregate of 147,285 shares of common stock, including the shares issued in connection with the exercise of the underwriters’ overallotment option, for gross proceeds of approximately $22,093,000. The net proceeds to the Company, after deducting underwriting discounts and commissions and other offering expenses, were approximately $20,385,000.  

In February 2018, in connection with the closing of a public offering (the “February 2018 Offering”), the Company issued an aggregate of 115,000 shares of common stock, including the shares issued in connection with the exercise of the underwriters’ overallotment option, for gross proceeds of approximately $34,500,000. The net proceeds to the Company, after deducting underwriting discounts and commissions and other offering expenses, were approximately $32,214,000.  

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 (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. 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 condensed consolidated financial statements have been included.

8

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the Securities and Exchange Commission on March 15, 2019. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results for the year ending December 31, 2019 or any future interim period.

Liquidity and Management Plans

The Company has adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standard Codification (“ASC”) Topic 205-40, Presentation of Financial Statements – Going Concern, which requires that management evaluate whether there are relevant conditions and events that, in the aggregate, raise substantial doubt about the entity’s ability to continue as a going concern and to meet its obligations as they become due within one year after the date that the financial statements are issued.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. However, since inception, the Company has sustained significant operating losses and such losses are expected to continue for the foreseeable future. As of September 30, 2019, the Company had an accumulated deficit of $183,094,000, cash and cash equivalents of $9,086,000 and working capital of $12,836,000. Additionally, the Company used $6,608,000 in cash for operations in the three months ended September 30, 2019 and $25,862,000 in cash for operations for the nine months ended September 30, 2019. The Company will require additional cash funding to fund operations through November 2020. Accordingly, management has concluded that the Company does not have sufficient funds to support operations within one year after the date the financial statements are issued and, therefore, the Company concluded there was substantial doubt about the Company’s ability to continue as a going concern.

To fund further operations, the Company will need to raise additional capital. The Company may obtain additional financing in the future through the issuance of its common stock, or through other equity or debt financings. The Company’s ability to continue as a going concern or meet the minimum liquidity requirements in the future is dependent on its ability to raise significant additional capital, of which there can be no assurance. If the necessary financing is not obtained or achieved, the Company will likely be required to reduce its planned expenditures, which could have an adverse impact on the results of operations, financial condition and the Company’s ability to achieve its strategic objective. There can be no assurance that financing will be available on acceptable terms, or at all. The financial statements contain no adjustments for the outcome of these uncertainties. These factors raise substantial doubt about the Company’s ability to continue as a going concern and have a material adverse effect on the Company’s future financial results, financial position and cash flows.

2. Summary of Significant Accounting Policies

Financial Statement Presentation

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

Reverse Stock Split

On September 18, 2019, the Company effected a 1-for-100 reverse stock split of its common stock that became effective after market close on September 18, 2019. The reverse stock split uniformly affected all issued and outstanding shares of the Company’s common stock. The reverse stock split did not alter any stockholder's percentage ownership interest in the Company, except to the extent that the reverse stock split resulted in fractional shares. No fractional shares were issued in connection with the reverse stock split. Any fractional shares that resulted from the reverse stock split were rounded down, and stockholders were issued cash in lieu of such fractional share interest.

The par value of the Company’s common stock remained unchanged at $0.0001 per share after the reverse stock split.

The number of authorized shares of common stock remained at 75 million.

The reverse stock split proportionately affected the number of shares of common stock available for issuance under the Company’s equity incentive plans. All stock options, warrants and restricted stock awards of the Company outstanding shares immediately prior to the reverse stock split were adjusted in accordance with their terms.

9

On the effective date of the reverse stock split, (i) each 100 shares of outstanding common stock were reduced to one share of common stock; (ii) the number of shares of common stock into which each outstanding stock option or warrant to purchase common stock is exercisable were proportionately reduced on an 100-to-1 basis; (iii) the exercise price of each outstanding stock option or warrant to purchase common stock were proportionately increased on a 1-to-100 basis; and (iv) the number of shares of common stock each outstanding restricted stock award will be issued upon vesting were proportionally reduced on a 100-to-1 basis.

All of the share numbers, share prices, and exercise prices have been adjusted, on a retroactive basis, to reflect this 1-for-100 reverse stock split.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. 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. 

Changes in Accounting Policies

Except for the changes for the adoption of the new accounting standard for leases, the Company has consistently applied the accounting policies to all periods presented in these condensed consolidated financial statements.

Adoption of New Accounting Standard - Leases

The Company adopted FASB’s Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), as of January 1, 2019, using the modified retrospective approach. The modified retrospective approach provides a method for recording existing leases at the beginning of the period of adoption. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification and we elected the hindsight practical expedient to determine the lease term for existing leases. We determined that the renewal options for the facilities lease would be reasonably certain to be renewed and as such, included that renewal period in determining the expected lease term of that lease. Adoption of the new standard resulted in the recording of operating lease right-of-use assets of $629,000 and operating lease liabilities of $629,000, as of January 1, 2019. The standard did not have an impact on our consolidated results of operations, cash flows or stockholders’ equity previously reported. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

The effect of the changes made to our consolidated January 1, 2019 balance sheet for the adoption of the new lease standard was as follows (in thousands): 

			Adjustments
			Due to
	December 31,		Adoption of			January 1,
	2018		ASC 842			2019
Other assets	$	171	$	629	(1)	$	800
Total assets	$	46,834	$	629	(1)	$	47,463
Accrued liabilities	$	6,766	$	230	(2)	$	6,996
Total current liabilities	$	10,760	$	230	(2)	$	10,990
Other noncurrent liabilities	$	634	$	399	(2)	$	1,033
Total liabilities	$	41,922	$	629	(2)	$	42,551
Total liabilities and stockholders' equity	$	46,834	$	629	(2)	$	47,463

(1)	Represents capitalization of operating lease right-of-use assets and reclassification of deferred rent.
(2)	Represents recognition of operating lease liabilities.

10

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 accounts primarily 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.

Most of the Company’s products to date require clearance or approvals from the U.S. Food and Drug Administration (“FDA”) or other international regulatory agencies prior to commencing commercial sales. There can be no assurance that the Company’s products will receive any of these required clearances or approvals or for the indications requested. If the Company was denied such clearances or approvals or if such clearances or approvals were delayed, it would have a material adverse effect 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. 

The Company designs, develops, manufactures and markets a medical device that it refers to as the Viveve System, which is intended for the non-invasive treatment of vaginal introital laxity, for improved sexual function, for vaginal rejuvenation, for use in general surgical procedures for electrocoagulation and hemostasis, and stress urinary incontinence, depending on the relevant country-specific clearance or approval. The Viveve System consists of three main components: a RF, or radio frequency, generator housed in a table-top console, a reusable handpiece and a single-use treatment tip. Included with the system are single-use accessories (e.g. RF return pad, coupling fluid), as well as a cryogen canister that can be used for approximately four to five procedures, and a foot pedal. The Company outsources the manufacture and repair of the Viveve System to a single contract manufacturer. Also, certain other components and materials that comprise the device are currently manufactured by a single supplier or a limited number of suppliers. A significant supply interruption or disruption in the operations of the contract manufacturer or these third-party suppliers would adversely impact the production of our products for a substantial period of time, which could have a material adverse effect on our business, financial condition, operating results and cash flows.

In North America, the Company sells its products primarily through a direct sales force to health care practitioners. Outside North America, the Company sells through an extensive network of distribution partners. During the three months ended September 30, 2019, two distributors, collectively, accounted for 31 % of the Company’s revenue. During the three months ended September 30, 2018, three distributors accounted for 42% of the Company’s revenue. During the nine months ended September 30, 2019, one distributor accounted for 17 % of the Company’s revenue. During the nine months ended September 30, 2018, one distributor accounted for 21% of the Company’s revenue.

There were no direct sales customers that accounted for more than 10% of the Company’s revenue during the three and nine months ended September 30, 2019 and 2018.

As of September 30, 2019, four distributors, collectively, accounted for 67% of total accounts receivable, net. As of December 31, 2018, three distributors, collectively, accounted for 54% of total accounts receivable, net.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at the invoiced amount and are not interest bearing. Our typical payment terms vary by region and type of customer (distributor or physician). Occasionally, payment terms of up to six months may be granted to customers with an established history of collections without concessions. Should we grant payment terms greater than six months or terms that are not in accordance with established history for similar arrangements, revenue would be recognized as payments become due and payable assuming all other criteria for revenue recognition have been met. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company makes ongoing assumptions relating to the collectability of its accounts receivable in its calculation of the allowance for doubtful accounts. In determining the amount of the allowance, the Company makes judgments about the creditworthiness of customers based on ongoing credit evaluations and assesses current economic trends affecting its customers that might impact the level of credit losses in the future and result in different rates of bad debts than previously seen. The Company also considers its historical level of credit losses. The allowance for doubtful accounts was $543,000 as of September 30, 2019 and $284,000 as of December 31, 2018.

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Revenue Recognition

Revenue consists primarily of the sale of the Viveve System, single-use treatment tips and ancillary consumables. The Company applies the following five steps: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. The Company considers customer purchase orders to be the contracts with a customer. Revenues, net of expected discounts, are recognized when the performance obligations of the contract with the customer are satisfied and when control of the promised goods are transferred to the customer, typically when products, which have been determined to be the only distinct performance obligations, are shipped to the customer. Expected costs of assurance warranties and claims are recognized as expense. Revenue is recognized net of any sales taxes from the sale of the products.

Rental revenue is generated through the lease of the Viveve System. The Company’s operating leases for the Viveve System have a rental period of six months and can be extended or terminated by the customer after that time or the Viveve System can be purchased by the customer. Rental revenue on those operating leases is recognized on a straight-line basis over the terms of the underlying leases. The Company began this rental program in the quarter ended June 30, 2019 and the revenue associated with it has not been material to the periods presented. As of September 30, 2019, the Company had deferred revenue in the amount of $579,000 related to its rental program.

In connection with the lease of the Viveve System, the Company offers single-use treatment tips and ancillary consumables that are considered nonlease components. In the contracts with lease and nonlease components, the Company follows the relevant guidance in ASC 606, Revenue from Contracts with Customers, to determine how to allocate contractual consideration between the lease and nonlease components.

Sales of our products are subject to regulatory requirements that vary from country to country. The Company has regulatory clearance for differing indications, or can sell its products without a clearance, in many countries throughout the world, including countries within the following regions: North America, Latin America, Europe, the Middle East and Asia Pacific. In North America, we market and sell primarily through a direct sales force. Outside of North America, we market and sell primarily through distribution partners.

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

Customer Advance Payments

From time to time, customers will pay for a portion of the products ordered in advance.  Upon receipt of such payments, the Company records the customer advance payment as a component of accrued liabilities.  The Company will remove the customer advance payment from accrued liabilities when revenue is recognized upon shipment of the products. 

Contract Assets and Liabilities

The Company continually evaluates whether the revenue generating activities and advanced payment arrangements with customers result in the recognition of contract assets or liabilities. No such assets existed as of September 30, 2019 or December 31, 2018. The Company had customer contracts liabilities in the amount of $470,000, primarily related to marketing programs that performance had not yet been delivered to its customers as of September 30, 2019 and $686,000 as of December 31, 2018.

The following table reflects the changes in our customer contract liabilities for the nine months ended September 30, 2019:

	September 30,		December 31,		Nine Months
	2019		2018		Change
Customer contracts liabilities:
Marketing programs	$	470	$	639	$	(169	)
Other		-		47		(47	)
Total	$	470	$	686	$	(216	)

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Separately, accounts receivable, net represents receivables from contracts with customers.

Significant Financing Component

The Company applies the practical expedient to not make any adjustment for a significant financing component if, at contract inception, the Company does not expect the period between customer payment and transfer of control of the promised goods or services to the customer to exceed one year. During the three and nine months ended September 30, 2019 and 2018, the Company did not have any contracts for the sale of its products with its customers with a significant financing component.

Contract Costs 

The Company expects that commissions paid to obtain subscriptions are recoverable and has therefore capitalized them as a contract costs in the amount of $198,000 and $0 at September 30, 2019 and 2018, respectively. Capitalized commissions are amortized based on the subscription periods to which the assets relate and are included in selling, general and administrative expenses. For the three and nine months ended September 30, 2019, the amount of amortization was $30,000 ($0 in 2018). There was no impairment loss in relation to the costs capitalized. The Company has elected the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is less than six months.

Shipping and Handling

Shipping costs billed to customers are recorded as revenue. Shipping and handling expense related to costs incurred to deliver product are recognized within cost of goods sold. The Company accounts for shipping and handling activities that occur after control has transferred as a fulfillment cost as opposed to a separate performance obligation, and the costs of shipping and handling are recognized concurrently with the related revenue.

Revenue by Geographic Area

Management has determined that the sales by geography is a key indicator for understanding the Company’s financials because of the different sales and business models that are required in the various regions of the world (including regulatory, selling channels, pricing, customers and marketing efforts). The following table presents the revenue from unaffiliated customers disaggregated by geographic area for the three and nine months ended September 30, 2019 and 2018 (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
North America	$	652	$	3,455	$	3,106	$	10,613
Asia Pacific		373		717		1,684		2,238
Europe and Middle East		27		612		316		1,143
Latin America		-		37		10		51
Total	$	1,052	$	4,821	$	5,116	$	14,045

The Company determines geographic location of its revenue based upon the destination of the shipments of its products.

Investments in Unconsolidated Affiliates

The Company uses the equity method to account for its investments in entities that it does not control but have the ability to exercise significant influence over the investee. Equity method investments are recorded at original cost and adjusted periodically to recognize (1) the proportionate share of the investees’ net income or losses after the date of investment, (2) additional contributions made and dividends or distributions received, and (3) impairment losses resulting from adjustments to net realizable value. The Company eliminates all intercompany transactions in accounting for equity method investments. The Company records the proportionate share of the investees’ net income or losses in equity in earnings of unconsolidated affiliates on the condensed consolidated statements of operations. The Company utilizes a three-month lag in reporting equity income from its investments, adjusted for known amounts and events, when the investee’s financial information is not available timely or when the investee’s reporting period differs from our reporting period.

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The Company assesses the potential impairment of the equity method investments when indicators such as a history of operating losses, a negative earnings and cash flow outlook, and the financial condition and prospects for the investee’s business segment might indicate a loss in value. The carrying value of the investments is reviewed annually for changes in circumstances or the occurrence of events that suggest the investment may not be recoverable. No impairment charges have been recorded in the condensed consolidated statements of operations during the three and nine months ended September 30, 2019 and 2018.

Product Warranty

The Company’s products are generally subject to warranties between one and three years, which provides for the repair, rework or replacement of products (at the Company’s option) that fail to perform within stated specifications. The Company has assessed the historical claims and, to date, product warranty claims have not been significant.

Accounting for Stock-Based Compensation

Share-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized as expense over the employee’s service period. The Company recognizes compensation expense on a straight-line basis over the requisite service period of the award.

The Company determined that the Black-Scholes option pricing model is the most appropriate method for determining the estimated fair value for stock options and purchase rights under the employee stock purchase plan. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions which determine the fair value of share-based awards, including the option’s expected term and the price volatility of the underlying stock.

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 represents the changes in equity of an enterprise, other than those resulting from stockholder transactions. Accordingly, comprehensive loss may include certain changes in equity that are excluded from net loss. For the three months and nine months ended September 30, 2019 and 2018, the Company’s comprehensive loss is the same as its net loss. 

Net Loss per Share

The Company’s basic net loss per share 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 is computed by giving effect to all potentially dilutive common stock equivalents outstanding during the period. For purposes of this calculation, stock options and warrants to purchase common stock and restricted common stock awards are considered common stock equivalents. For periods in which the Company has reported net losses, diluted net loss per share is the same as basic net loss per share, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

The following securities were excluded from the calculation of net loss per share because the inclusion would be anti-dilutive. 

	Nine Months Ended
	September 30,
	2019		2018
Stock options to purchase common stock		50,471		42,917
Warrants to purchase common stock		5,549		6,408
Restricted common stock awards		3,432		600

Other Recently Issued and Adopted Accounting Standards

In June 2018, the FASB issued ASU 2018-07, “Stock Compensation (Topic 718) – Improvements to Nonemployee Share- Based Payment Accounting”. The intent of this guidance is to simplify the accounting for nonemployee share-based payment accounting. The amendments in this guidance expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. Equity- classified nonemployee share-based payment awards are measured at the grant date. Consistent with the accounting for employee share-based payment awards, an entity considers the probability of satisfying performance conditions when nonemployee share-based payment awards contain such conditions. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within the reporting period. We adopted this guidance as of January 1, 2019 and the adoption of the guidance did not have a significant impact on the condensed consolidated financial statements.

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We have reviewed other recent accounting pronouncements and concluded they are either not applicable to the business, or no material effect is expected on the consolidated financial statements as a result of future adoption.

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. 

There were no financial instruments that were measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018.

The carrying amounts of the Company’s financial assets and liabilities, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses as of September 30, 2019, and December 31, 2018 approximate fair value because of the short maturity of these instruments. Based on borrowing rates currently available to the Company for loans with similar terms, the carrying value of the note payable approximates fair value. 

There were no changes in valuation techniques from prior periods.

4. Investment in Limited Liability Company

On August 8, 2017, the Company entered into an exclusive Distributorship Agreement (the “Distributorship Agreement”) with InControl Medical, LLC (“ICM”), a Wisconsin limited liability company focused on women's health, pursuant to which the Company will directly market, promote, distribute and sell ICM’s products to licensed medical professional offices and hospitals in North America.

Under the terms of the Distributorship Agreement, ICM agreed to not directly or indirectly appoint or authorize any third party to market, promote, distribute or sell any of the licensed products to any licensed medical professional offices and hospitals in the United States. In exchange, the Company agreed to not market, promote, distribute or sell (or contract to do so) any product which substantially replicates all or almost all of the key features of the licensed products. The Company has a minimum purchase requirement to purchase a certain quantity of ICM products per month during the term of this Distributorship Agreement. In addition, the parties agreed to certain mutual marketing obligations to promote sales of the licensed products. As of September 30, 2019, the Company has purchased approximately 4,800 units of ICM products. The Company paid ICM approximately zero and $27,000 for product related costs during the three and nine months ended September 30, 2019 respectively.  There were no amounts due to ICM for the accounts payable as of September 30, 2019 and December 31, 2018.

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In connection with the Distributorship Agreement, the Company also entered into a Membership Unit Subscription Agreement with ICM and the associated limited liability company operating agreement of ICM, pursuant to which the Company invested $2,500,000 in, and acquired membership units of, ICM. This investment has been recorded in investment in a limited liability company in the condensed consolidated balance sheets. The Company used the equity method to account for the investment in ICM because the Company does not control it but has the ability to exercise significant influence over it. As of September 30, 2019, the Company owns approximately 7% ownership interest in ICM. The Company recognizes its allocated portion of ICM’s results of operations on a three-month lag due to the timing of financial information. For the three and nine months ended September 30, 2019, the allocated net loss from ICM’s operations was $168,000 and $431,000, respectively. For the three and nine months ended September 30, 2018, the allocated net loss from ICM’s operations was $132,000 and $539,000, respectively. The allocated net loss from ICM’s operations was recorded as loss from minority interest in limited liability company in the condensed consolidated statements of operations.

In February 2019, the Company executed a mutual termination of the Distributorship Agreement with ICM. As a result, the Company no longer has a minimum purchase requirement to purchase a certain quantity of ICM products per month.

5. Accrued Liabilities

Accrued liabilities consisted of the following as of September 30, 2019 and December 31, 2018 (in thousands): 

	September 30,		December 31,
	2019		2018
Accrued bonuses	$	728	$	837
Accrued interest		704		683
Deferred revenue - subscription rental program		579		-
Accrued payroll and other related expenses		500		877
Accrued professional fees		494		978
Customer contracts liabilities		470		686
Accrued sales commission		423		1,743
Current operating lease liabilities		257		-
Accrued clinical trial costs		166		84
Travel and entertainment		54		280
Accrued sales & use tax		9		259
Other accruals		73		339
Total accrued liabilities	$	4,457	$	6,766

  6. Note Payable

On May 22, 2017, the Company entered into a Term Loan Agreement (the “2017 Loan Agreement”) with affiliates of CRG LP (“CRG”). The credit facility consists of $20,000,000 drawn at closing and access to additional funding of up to an aggregate of $10,000,000 for a total of $30,000,000 available under the credit facility. On December 29, 2017, the Company accessed the remaining $10,000,000 available under the credit facility.

A portion of the initial loan proceeds were used to repay all of the amounts owed by the Company under its 2016 Loan Agreement with Western Alliance Bank. The remainder of the loan proceeds (after deducting loan origination costs and other fees and expenses incurred in connection with the 2017 Loan Agreement), plus any additional amounts that may be borrowed in the future, will be used for general corporate purposes and working capital.

The 2017 Loan Agreement has a six-year term with four years of interest-only payments after which quarterly principal and interest payments will be due through the maturity date. Amounts borrowed under the 2017 Loan Agreement accrue interest at an annual fixed rate of 12.5%, 4.0% of which may, at the election of the Company, be paid in-kind during the interest-only period by adding such accrued amount to the principal loan amount each quarter. During the three and nine months ended September 30, 2019, the Company paid interest in-kind of $331,000 and $973,000, respectively, which was added to the total outstanding principal loan amount. During the three and nine months ended September 30, 2018, the Company paid interest in-kind of $318,000 and $934,000, respectively, which was added to the total outstanding principal loan amount. The Company is also required to pay CRG a final payment fee upon repayment of the loans in full equal to 5.0% of the sum of the aggregate principal amount plus the deferred interest added to the principal loan amount during the interest-only period. The Company accounts for the final payment fee by accruing the fee over the term of the loan using the effective interest rate method. As of September 30, 2019, interest accrued related to the final payment fee in the amount of $756,000 was included in other noncurrent liabilities in the condensed consolidated balance sheets.

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The Company may prepay all or a portion of the outstanding principal and accrued unpaid interest under the 2017 Loan Agreement at any time upon prior notice to CRG, subject to a prepayment fee during the first five years of the term (which reduces each year) and no prepayment fee thereafter.

As security for its obligations under the 2017 Loan Agreement, the Company entered into security agreements with CRG whereby the Company granted CRG a lien on substantially all of the Company’s assets, including intellectual property.

The terms of the 2017 Loan Agreement also require the Company to meet certain financial and other covenants. These covenants require the Company to maintain cash and cash equivalents of $2.0 million and, each year through the end of 2022, to meet a minimum total annual revenue threshold. In the event that the Company does not meet the minimum total annual revenue threshold for a particular year, then the Company can retroactively cure the shortfall by either issuing additional equity in exchange for cash or incurring certain additional permitted indebtedness, in each case, in an amount equal to 2.0 times the shortfall. Any such amounts shall be applied to prepay the loans. The 2017 Loan Agreement also contains customary affirmative and negative covenants for a credit facility of this size and type, including covenants that limit or restrict the Company’s ability to, among other things, incur indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make acquisitions, enter into transactions with affiliates, pay dividends or make distributions, license intellectual property rights on an exclusive basis or repurchase stock, in each case subject to customary exceptions. As of September 30, 2019, the Company was in compliance with all covenants.

As of September 30, 2019 and December 31, 2018, $31,694,000 and $30,528,000, respectively, was recorded on the balance sheets under the 2017 Loan Agreement, respectively, which is net of the remaining unamortized debt discount.

In connection with the 2017 Loan Agreement, the Company issued two 10-year warrants to CRG to purchase a total of 2,220 shares of the Company’s common stock at an exercise price of $950.00 per share (See Note 9). 

As of September 30, 2019, future minimum payments under the note payable are as follows (in thousands): 

Year Ending December 31,
2019 (remaining three months)	$	710
2020		2,901
2021		16,673
2022		19,306
2023		6,220
Total payments		45,810
Less: Amount representing interest		(13,087	)
Present value of obligations		32,723
Less: Unamortized debt discount		(1,029	)
Note payable, noncurrent portion	$	31,694

 7. Leases

Lessee:

The following information pertains to those operating lease agreements where the Company is the lessee.

In January 2012, the Company entered into a lease agreement for office and laboratory facilities in Sunnyvale, California. The lease agreement, as amended, commenced in March 2012 and terminated in April 2018.

On February 1, 2017, the Company entered into a sublease agreement (the “Sublease”) for approximately 12,400 square feet of building space for the relocation of the Company’s corporate headquarters to Englewood, Colorado (the “Sublease Premises”), which was effective as of January 26, 2017. The lease term commenced on June 1, 2017 and will terminate in May 2020. The Company relocated its corporate headquarters from Sunnyvale, California to Englewood, Colorado in June 2017.

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The monthly base rent under the Sublease is equal to $20.50 per rentable square foot of the Sublease Premises during the first year. The monthly base rent is equal to $21.12 and $21.75 per rentable square foot during the second and third years, respectively. In connection with the execution of the Sublease, the Company also agreed to pay a security deposit of approximately $22,000. The Company was also provided an allowance of approximately $88,000 for certain tenant improvements relating to the engineering, design and construction of the Sublease Premises which has been reimbursed.

Rent expense for the three and nine months ended September 30, 2018 was $65,000 and $293,000.

In September 2018, the Company entered into a 36-month noncancelable operating lease agreement for office equipment.  The lease commenced on September 20, 2018.  The monthly payment is approximately $3,000. 

After the adoption of ASU 842 – Leases on January 1, 2019, operating lease rentals are expensed on a straight-line basis over the life of the lease beginning on the date the Company takes possession of the property. At lease inception, the Company determines the lease term by assuming the exercise of those renewal options that are reasonably assured. The lease term is used to determine whether a lease is financing or operating and is used to calculate straight-line rent expense. Additionally, the depreciable life of leasehold improvements is limited by the expected lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The following table reflects the Company's lease assets and lease liabilities at September 30, 2019 and January 1, 2019 (in thousands):

	September 30,		January 1,
	2019		2019
Assets:
Operating lease right-of-use assets	$	456	$	629
Liabilities:
Current operating lease liabilities	$	257	$	230
Noncurrent operating lease liabilities		203		399
	$	460	$	629

The operating lease right-of-use assets are included in other assets on the condensed consolidated balance sheet. The operating lease liabilities are included in accrued liabilities and other noncurrent liabilities on the condensed consolidated balance sheet.

The operating leases expense for the three and nine months ended September 30, 2019 was $75,000 and $225,000, respectively.

As of September 30, 2019, the maturity of operating lease liabilities was as follows (in thousands):

Year Ending December 31,
2019 (remaining three months)	$	75
2020		303
2021		136
Total lease payments		514
Less: Amount representing interest		(54	)
Present value of lease liabilities	$	460

The weighted average remaining lease term was approximately 20 months as of September 30, 2019. The weighted average discount rate for the three and nine months ended September 30, 2019 was 12.5%.

Lessor:

The following information pertains to those operating lease agreements where the Company is the lessor.

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As of September 30, 2019, minimum future rentals from customers on non-cancellable operating leases of Viveve Systems are as follows (in thousands):

Year Ending December 31,
2019 (remaining three months)	$	255
2020		324
Thereafter		-
Total	$	579

As of September 30, 2019, $456,000 of property and equipment is related to these operating lease agreements. The depreciation expense for that property and equipment for the three and nine months ended September 30, 2019 is $46,000 and $46,000, respectively.

8. Commitments and Contingencies

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. 

Loss Contingencies

The Company is or has been subject to proceedings, lawsuits and other claims arising in the ordinary course of business. The Company evaluates contingent liabilities, including threatened or pending litigation, for potential losses. If the potential loss from any claim or legal proceeding is considered probable and the amount can be estimated, the Company accrues a liability for the estimated loss. Because of uncertainties related to these matters, accruals are based upon the best information available. For potential losses for which there is a reasonable possibility (meaning the likelihood is more than remote but less than probable) that a loss exists, the Company will disclose an estimate of the potential loss or range of such potential loss or include a statement that an estimate of the potential loss cannot be made. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation and may revise its estimates, which could materially impact its condensed consolidated financial statements.  Management does not believe that the outcome of any outstanding legal matters will have a material adverse effect on the Company's consolidated financial position, results of operations and cash flows.

9. Common Stock

Through the August 2019 ATM Facility, the Company may offer and sell, from time-to-time, up to $6,760,000 aggregate offering price of shares of its common stock”). The Company’s offering of $6,760,000 of its common stock under the August 2019 ATM Facility was completed in late September 2019. During the three months ended September 30, 2019, the Company sold 1,004,171 shares of common stock under the August 2019 ATM Facility for net proceeds, after deducting sales commissions and other offering costs, of approximately $6,322,000.

In August 2019, the Company terminated the November 2017 ATM Facility under which the Company could offer and sell, from time-to-time, up to $25,000,000 aggregate offering price of shares of its common stock. During the three and nine months ended September 30, 2019, the Company sold zero shares of common stock under the November 2017 ATM Facility. During the three and nine months ended September 30, 2018, the Company sold 37 and 2,771 shares of common stock under the November 2017 ATM Facility for net proceeds, after deducting sales commissions and other offering costs, of approximately $11,000 and $1,194,000, respectively. Through the closing of the November 2017 ATM Facility in August 2019, the Company sold 3,364 shares of common stock under the equity offering program for net proceeds of approximately $1,318,000.

In March 2019, the Company issued 274 restricted shares of its common stock at an aggregate value of approximately $25,000.

In December 2018, in connection with the closing of the December 2018 Offering, the Company issued an aggregate of 147,285 shares of common stock, including the shares issued in connection with the exercise of the underwriters’ overallotment option, for gross proceeds of approximately $22,093,000. The net proceeds to the Company, after deducting underwriting discounts and commissions and other offering expenses, were approximately $20,385,000.  

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In June 2018, the Company issued 1,000 restricted shares of its common stock at an aggregate value of approximately $256,000.

In February 2018, in connection with the closing of the February 2018 Offering, the Company issued an aggregate of 115,000 shares of common stock, including the shares issued in connection with the exercise of the underwriters’ overallotment option, for gross proceeds of approximately $34,500,000. The net proceeds to the Company, after deducting underwriting discounts and commissions and other offering expenses, were approximately $32,214,000.  

Warrants for Common Stock

As of September 30, 2019, 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
October 2014	Common Shares	October 13, 2019	$	424.00		288
November 2014	Common Shares	November 12, 2019	$	424.00		125
February 2015	Common Shares	February 17, 2025	$	400.00		754
March 2015	Common Shares	March 26, 2025	$	272.00		14
May 2015	Common Shares	May 12, 2025	$	424.00		362
May 2015	Common Shares	May 17, 2020	$	424.00		215
December 2015	Common Shares	December 16, 2025	$	560.00		267
April 2016	Common Shares	April 1, 2026	$	608.00		250
May 2016	Common Shares	May 11, 2021	$	774.00		50
June 2016	Common Shares	June 20, 2026	$	498.00		1,004
May 2017	Common Shares	May 25, 2027	$	950.00		2,220
						5,549

 In connection with the 2017 Loan Agreement, the Company issued warrants to purchase a total of 2,220, shares of common stock at an exercise price of $950.00 per share. The warrants have a contractual life of ten years and are exercisable immediately in whole or in part. The Company determined the fair value of the warrants on the date of issuance to be $940,000 using the Black-Scholes option pricing model. Assumptions used were dividend yield of 0%, volatility of 55.1%, risk free interest rate of 2.25% and a contractual life of ten years. The fair value of the warrants along with financing and legal fees totaling $790,000, are recorded as debt issuance costs and presented in 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 and nine months ended September 30, 2019, the Company recorded $92,000 and $270,000, respectively, of interest expense relating to the debt issuance costs using the effective interest method. During the three and nine months ended September 30, 2018, the Company recorded $82,000 and $242,000, respectively, of interest expense relating to the debt issuance costs using the effective interest method.

No shares issuable pursuant to warrants were issued in connection with the exercise of warrants during the three and nine months ended September 30, 2019 and 2018.

No shares issuable pursuant to warrants have been cancelled during the three and nine months ended September 30, 2019 and 2018.

A total of 859 shares issuable pursuant to warrants expired during the three and nine months ended September 30, 2019. No shares issuable pursuant to warrants expired during the three and nine months ended September 30, 2018.

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10. 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, 2019, there are outstanding stock option awards issued from the 2006 Plan covering a total of 104 shares of the Company’s common stock and no shares are available for future awards. The weighted average exercise price of the outstanding stock options is $992.00 per share and the weighted average remaining contractual term is 3.3 years.

As of September 30, 2019, there are outstanding stock option awards issued from the 2013 Plan covering a total of 50,367 shares of the Company’s common stock and there remain reserved for future awards 11,770 shares of the Company’s common stock. The weighted average exercise price of the outstanding stock options is $297.56 per share, and the remaining contractual term is 8.3 years.

In January 2019, the board of directors approved the 2019 evergreen provision increasing the total stock reserved for issuance under the 2013 Plan by 20,431 shares from 49,140 shares to a total of 69,571 shares, which was effective January 1, 2019.

In September 2019, the Company’s stockholders approved an amendment to the 2013 Plan to increase the number of shares of common stock reserved for issuance thereunder to equal 18% of the issued and outstanding shares of common stock of the Company on a fully diluted basis calculated as of the earlier of: (1) the day immediately after the consummation of the Company’s next underwritten public equity offering with gross proceeds of $5.0 million or more; or (2) December 31, 2019.

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

	Nine Months Ended September 30, 2019
						Weighted
				Weighted		Average
	Number			Average		Remaining		Aggregate
	of			Exercise		Contractual		Intrinsic
	Shares			Price		Term (years)		Value
Options outstanding, beginning of period		40,144		$	456.00		7.4	$	-
Options granted		23,344		$	117.91
Options exercised		-
Options canceled		(13,017	)	$	457.34
Options outstanding, end of period		50,471		$	298.99		8.3	$	-
Vested and exercisable and expected to vest, end of period		48,506		$	302.18		8.3	$	-
Vested and exercisable, end of period		21,169		$	397.45		7.4	$	-

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, 2019.

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The options outstanding and exercisable as of September 30, 2019 are as follows: 

			Number		Weighted		Average		Number		Weighted
			Outstanding		Average		Remaining		Exercisable		Average
Range of			as of		Exercise		Contractual		as of		Exercise
Exercise Prices			September 30, 2019		Price		Term (Years)		September 30, 2019		Price
$38.00	-	$58.00		1,650	$	55.42		9.7		-	$	-
$100.00	-	$197.00		25,496	$	138.25		9.1		6,839	$	148.08
$202.00	-	$283.00		775	$	252.06		8.3		305	$	258.36
$311.00	-	$382.00		4,377	$	357.96		8.1		2,318	$	360.44
$430.00	-	$497.00		8,908	$	452.58		7.7		4,576	$	454.70
$501.00	-	$567.00		4,594	$	536.63		6.9		3,126	$	536.17
$600.00	-	$661.00		2,397	$	601.91		5.9		2,236	$	601.42
$700.00	-	$792.00		2,170	$	769.23		6.3		1,665	$	769.86
$992.00	-	$992.00		104	$	992.00		3.3		104	$	992.00
Total:				50,471	$	298.99		8.3		21,169	$	397.45

Restricted Stock Awards (‘RSA”)

In 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.

In June 2019, the Company issued 250 shares to a consultant in connection with the vesting of an RSA granted to the consultant in June 2018.

In 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.

In 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 three and nine months ended September 30, 2019, a total of 421 and 443 shares, respectively, pursuant to these RSAs were cancelled. As of September 30, 2019, zero shares were vested and issued.

As of September 30, 2019, there are 3,432 shares of unvested restricted stock outstanding that have been granted pursuant to RSAs.

2017 Employee Stock Purchase Plan

The eighth offering period under the Company’s 2017 Employee Stock Purchase Plan (the “2017 ESPP”) began on July 1, 2019 and ended on September 30, 2019, and 200 shares were issued on September 30, 2019 at a purchase price of $3.75.

The seventh offering period under the Company’s 2017 ESPP began on April 1, 2019 and ended on June 30, 2019, and 602 shares were issued on June 28, 2019 at a purchase price of $32.30.

The sixth offering period under the Company’s 2017 ESPP began on January 1, 2019 and ended on March 31, 2019, and 429 shares were issued on March 29, 2019 at a purchase price of $79.88.

As of September 30, 2019, the remaining shares available for issuance under the 2017 ESPP were 1,392 shares.

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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,
	2019			2018			2019			2018
Expected term (in years)		0.25			0.25			0.25			0.25
Average volatility		98	%		67	%		84	%		67	%
Risk-free interest rate		2.21	%		1.93	%		2.40	%		1.71	%
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, 2019 was $13.16 and $2.12, respectively and during the three and nine months ended September 30, 2018 was $75.00 and $100.00, respectively.

Stock-Based Compensation

During the three months ended September 30, 2019, the Company did not grant any stock options to employees. During the three months ended September 30, 2018, the Company granted stock options to employees to purchase 2,375 shares of common stock with a weighted average grant date fair value of $301.17 per share, respectively. During the nine months ended September 30, 2019 and 2018, the Company granted stock options to employees to purchase 23,069 and 20,544 shares of common stock with a weighted average grant date fair value of $117.86 and $364.98 per share, respectively. There were no stock options exercised during the three and nine months ended September 30, 2019 and 2018.

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 weighted average assumptions:   

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2019		2018			2019			2018
Expected term (in years)		N/A		5			5			5
Average volatility		N/A		70	%		73	%		73	%
Risk-free interest rate		N/A		2.86	%		2.49	%		2.67	%
Dividend yield		N/A		0	%		0	%		0	%

During the three months ended September 30, 2019, the Company did not grant any stock options to nonemployees. During the nine months ended September 30, 2019, the Company granted stock options to nonemployees to purchase 275 shares of common stock with a weighted average grant date fair value of $121.82. During the three and nine months ended September 30, 2018, the Company granted stock options to nonemployees to purchase 100 and 2,123 shares of common stock with a weighted average grant date fair value of $283.00 and $241.69 respectively. There were no stock options exercised by nonemployees during the three and nine months ended September 30, 2019 and 2018.

The fair value of nonemployee stock options granted was estimated using the following weighted average assumptions: 

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2019		2018			2019			2018
Expected term (in years)		N/A		10			5			10
Average volatility		N/A		66	%		73	%		66	%
Risk-free interest rate		N/A		3.04	%		2.49	%		3.04	%
Dividend yield		N/A		0	%		0	%		0	%

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

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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, 2019 and 2018 (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Cost of revenue	$	25	$	19	$	91	$	47
Research and development		41		79		134		266
Selling, general and administrative		451		667		1,409		1,981
Total	$	517	$	765	$	1,634	$	2,294

As of September 30, 2019, the total unrecognized compensation cost in connection with unvested stock options was approximately $3,371,000. These costs are expected to be recognized over a period of approximately 2.2 years.

11. Income Taxes

No provision for income taxes has been recorded due to the net operating losses incurred from inception to date, for which no benefit has been recorded.

For interim periods, the Company estimates its annual effective income tax rate and applies the estimated rate to the year-to-date income or loss before income taxes. The Company also computes the tax provision or benefit related to items reported separately and recognizes the items net of their related tax effect in the interim periods in which they occur. The Company also recognizes the effect of changes in enacted tax laws or rates in the interim periods in which the changes occur.

The Company’s effective tax rate is 0% for the three and nine months ended September 30, 2019. The Company expects that its effective tax rate for the full year 2019 will be 0%.

12. Related Party Transactions

In June 2006, the Company entered into a Development and Manufacturing Agreement (the “Agreement”) with Stellartech Research Corporation (“Stellartech”). The Agreement was amended on October 4, 2007. Under the Agreement, the Company agreed to purchase 300 generators manufactured by Stellartech. As of September 30, 2019, the Company has purchased 855 units. The price per unit is variable and dependent on the volume and timing of units ordered. In conjunction with the Agreement, Stellartech purchased 375 shares of Viveve, Inc.’s common stock. Under the Agreement, the Company paid Stellartech approximately $720,000 and $3,015,000 for goods and services during the three months ended September 30, 2019 and 2018, respectively, and approximately $3,853,000 and $8,613,000 for the nine months ended September 30, 2019 and 2018, respectively. The amounts due to Stellartech for accounts payable as of September 30, 2019 and December 31, 2018 were approximately $ 456,000 and $960,000, respectively.

13. Restructuring Costs

In January 2019, the Company implemented a strategic organizational realignment plan to reduce operating expenses and prepare the Company for expanded indications for its CMRF technology platform for improved sexual function and stress urinary incontinence in women. The restructuring included a reduction in headcount of approximately 40 full-time employees. The total restructuring costs were approximately $742,000 and have been recorded in operating expenses in the condensed consolidated statements of operations. As of September 30, 2019, the total restructuring costs have been fully paid out. The restructuring contributed to a reduction in total operating expenses in the first quarter of 2019 as planned and is expected to result in additional operating cost savings throughout the remainder of this year.

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

You should read the following discussion of our financial condition and results of operations in conjunction with the condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission on March 15, 2019. In addition to historical condensed consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report, particularly in Part II, Item 1A. "Risk Factors."

Overview of Our Business

In the discussion below, when we use the terms “we”, “us” and “our”, we are referring to Viveve Medical, Inc. and our wholly-owned subsidiaries, Viveve, Inc. and Viveve BV.

We design, develop, manufacture and market a platform medical technology, which we refer to as Cryogen-cooled Monopolar Radiofrequency (“CMRF”). Our proprietary CMRF technology is delivered through a radiofrequency generator, handpiece and treatment tip that, collectively, we refer to as the Viveve® System. The Viveve System is currently marketed and sold for a number of indications, depending on the relevant country-specific clearance or approval. Currently, the Viveve System is cleared for marketing in 57 countries throughout the world under the following indications for use: 

Indication for Use:	No. of Countries:
General Surgical procedures for electrocoagulation and hemostasis		4 (including the U.S.)
General Surgical procedures for electrocoagulation and hemostasis of vaginal tissue and for the treatment of vaginal laxity		32
For treatment of vaginal laxity		4
For treatment of the vaginal introitus, after vaginal childbirth, to improve sexual function		14
General Surgical procedures for electrocoagulation and hemostasis and for the treatment of vaginal laxity		1
For vaginal rejuvenation		1
For treatment of vaginal laxity, urinary incontinence and sexual function		1

In the U.S., the Viveve System is indicated for use in general surgical procedures for electrocoagulation and hemostasis and we market and sell primarily through a direct sales force. Outside the U.S., we primarily market and sell through distribution partners. As of September 30, 2019, we have a global installed base of 805 Viveve Systems and we have sold approximately 39,150 single-use treatment tips worldwide. 

Because the revenues we have earned to date have not been sufficient to support our operations, we have relied on sales of our securities, bank term loans and loans from related parties to fund our operations.

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 U.S. Food and Drug Administration (“FDA”) and other governmental clearance or approval for the sale of our product for all desired indications and whether there will be a demand for the Viveve System, given that the cost of the procedure will likely not be reimbursed by the government or private health insurers. In addition, we will continue to require substantial funds to support our clinical trials and fund our efforts to expand regulatory clearance or approval for our products, including in the U.S. We cannot be certain that any additional required financing will be available when needed or on terms which are favorable to us. As noted above, our operations to date have been primarily funded through the sales of our securities, bank term loans and loans from related parties. Various factors, including our limited operating history with limited revenues to date and our limited ability to market and sell our products have resulted in limited working capital available to fund our operations. There are no assurances that we will be successful in securing additional financing in the future to fund our operations going forward. 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.

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Recent Events

Nasdaq Delisting Notice

On May 13, 2019 and May 21, 2019, the Company received written notices from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying it that the Company was not in compliance with the minimum bid price requirements as well as the market value of listed securities requirements. Both notification letters state that the Company has 180 calendar days, or until November 11, 2019 and November 18, 2019, respectively, to regain compliance. 

On September 17, 2019, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a 1-for-100 reverse stock split of the Company’s issued and outstanding common stock. The reverse stock split became effective after the Nasdaq Capital Market trading closed on September 18, 2019 and the Company’s common stock began trading on a split-adjusted basis on the Nasdaq Capital Market on September 19, 2019.

On October 3, 2019, the Company was notified by Nasdaq that as of October 2, 2019, it had maintained a closing bid above $1.00 for a period of 10 consecutive trading days and therefore had regained compliance with the minimum bid price requirement. There can be no assurance that the Company will continue to be in compliance with the minimum bid price requirement or comply with Nasdaq’s other continued listing standards in the future.

We have until November 18, 2019 to regain compliance with the market value of listed securities requirement under Nasdaq Listing Rule 5550(b)(2). Alternatively, we could gain compliance with Nasdaq Listing Rule 5550(b)(1) or Nasdaq Listing Rule 5550(b)(3). In order to regain compliance with Nasdaq Listing Rule 5550(b)(2), we must maintain a market value of listed securities of at least $35 million for a minimum of ten (10) consecutive business days. If we do not regain compliance with Nasdaq Listing Rule 5550(b)(2) or, alternatively, gain compliance with Nasdaq Listing Rule 5550(b)(1) or Nasdaq Listing Rule 5550(b)(3), prior to the expiration of the compliance period, Nasdaq would notify us that our securities would be subject to delisting. In the event of such a notification, we may appeal the Staff’s determination to delist our securities, but there can be no assurance the Staff would grant our request for continued listing.

Reverse Stock Split

The Company effected a 1-for-100 reverse stock split of its common stock that became effective after the Nasdaq Capital Market trading closed on September 18, 2019. The reverse stock split uniformly affected all issued and outstanding shares of the Company’s common stock. The reverse stock split did not alter any stockholder's percentage ownership interest in the Company, except to the extent that the reverse stock split results in fractional shares. No fractional shares were issued in connection with the reverse stock split. Any fractional share that resulted from the reverse stock split was rounded down and stockholders were issued cash in lieu of such fractional share interest.

The par value of the Company’s common stock remained unchanged at $0.0001 per share after the reverse stock split. The number of authorized shares of common stock remained at 75 million.

The reverse stock split proportionately affected the number of shares of common stock available for issuance under the Company’s equity incentive plans. All stock options, warrants and restricted stock awards of the Company outstanding shares immediately prior to the reverse stock split were adjusted in accordance with their terms.

On the effective date of the reverse stock split, (i) each 100 shares of outstanding common stock were reduced to one share of common stock; (ii) the number of shares of common stock into which each outstanding stock option or warrant to purchase common stock is exercisable were proportionately reduced on an 100-to-1 basis; (iii) the exercise price of each outstanding stock option or warrant to purchase common stock were proportionately increased on a 1-to-100 basis; and (iv) the number of shares of common stock each outstanding restricted stock award will be issued upon vesting were proportionally reduced on a 100-to-1 basis.

All of the share numbers, share prices, and exercise prices have been adjusted, on a retroactive basis, to reflect this 1-for-100 reverse stock split.

“At-the-Market” Offering

The Company established an “at-the-market” equity offering program through the filing of a prospectus supplement to its shelf registration statement on Form S-3, which was filed on August 16, 2019, under which the Company may offer and sell, from time-to-time, up to $6,760,000 aggregate offering price of shares of its common stock (the “August 2019 ATM Facility”). The Company’s offering of $6,760,000 of its common stock under the August 2019 ATM Facility was completed in late September 2019. During the three months ended September 30, 2019, the Company sold 1,004,171 shares of common stock under the August 2019 ATM Facility for net proceeds, after deducting sales commissions and other offering costs, of approximately $6,322,000. As of September 30, 2019, the Company had no remaining capacity to issue shares under the August 2019 ATM Facility.

The Company had previously established an “at-the-market” equity offering program through the filing of a prospectus supplement to its shelf registration statement on Form S-3, which was filed on November 8, 2017, under which the Company could offer and sell, from time-to-time, up to $25,000,000 aggregate offering price of shares of its common stock (the “November 2017 ATM Facility”). On August 16, 2019, the Company suspended and subsequently terminated the November 2017 ATM Facility pursuant to the prospectus supplement, dated November 7, 2017. The Company will no longer make any sales of its common stock under the November 2017 ATM Facility. During the three and nine months ended September 30, 2019, the Company sold zero shares of common stock under the November 2017 ATM Facility. During the three and nine months ended September 30, 2018, the Company sold 37 and 2,771 shares of common stock under the November 2017 ATM Facility for net proceeds of approximately $11,000 and $1,194,000, respectively. Through the closing of the November 2017 ATM Facility in August 2019, the Company sold 3,364 shares of common stock under the equity offering program for net proceeds, after deducting sales commissions and other offering costs, of approximately $1,318,000.

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Effective Shelf Registration Statements

In November 2017, we filed a universal shelf registration statement with the SEC on Form S-3 for the proposed offering from time to time of up to $50,000,000 of our securities, including common stock, preferred stock, and/or warrants (the “2017 Shelf Registration Statement”). The 2017 Shelf Registration Statement currently has a balance of $35,016,000 available for future issuance. However, on August 18, 2019, the Company filed a prospectus supplement in which the Company disclosed that as a result of the limitations of General Instruction I.B.6. of Form S-3, and in accordance with the terms of the Sales Agreement, the amount of shares of our common stock available for sale under the New Form S-3 was limited to one-third of the aggregate market value of our common equity held by non-affiliates of the Company over any rolling 12-month period.

On August 16, 2019, the Company entered into a Sales Agreement (the "Ladenburg Sales Agreement") with Ladenburg Thalmann & Co. Inc. ("Ladenburg") to sell up to $6,760,000 of its common stock, from time to time during the term of the Ladenburg Sales Agreement, through an "at the market" equity offering program under which Ladenburg will act as the Company’s sales agent (the “August 2019 ATM Facility”). This was effected through the filing of a prospectus supplement to the 2017 Shelf Registration Statement on August 16, 2019. Previously, in November 2017, the Company had established an “at-the-market” offering program with Cowen and Company, LLC (“Cowen”), also through the filing of a prospectus supplement to the 2017 Shelf Registration Statement (the “November 2017 ATM Facility”). In connection with the Company’s entry into the Ladenburg Sales Agreement, on August 16, 2019, the Company delivered written notice to Cowen that it was suspending and terminating, effective immediately, the prospectus supplement related to the November 2017 ATM Facility, pursuant to the terms of the Sales Agreement, dated November 8, 2017, by and between the Company and Cowen. As of September 30, 2019, the Company had sold all of the shares available under the August 2019 ATM Facility.

As of September 30, 2019, the Company had no remaining capacity to issue shares under the 2017 Shelf Registration Statement due to the limitations under General Instruction I.B.6.

Submission of an ITA to Conduct Short-Term Feasibility Study in SUI

In September 2019, the Company reported its submission of an Investigational Testing Application (ITA) to the Canadian Ministry of Health to conduct a three-arm, three-month feasibility study to compare Viveve’s cryogen-cooled monopolar radiofrequency (CMRF) treatment to cryogen-only treatment and to an inert sham treatment for the improvement of Stress Urinary Incontinence (SUI) in women. The proposed three-month study may provide a strategic path forward in its pursuit of global label expansion for SUI indications following the positive, yet inconclusive results of the LIBERATE-International trial reported in August 2019. Upon approval of the ITA by Health Canada, the Company intends to rapidly initiate the feasibility study. Study subjects will be randomized in a 1:1:1 ratio to the three arms and assessed using the 1-hour Pad Weight Test, 3-day Voiding Diary, the 24-hour Pad Weight Test and I-QOL at three months post treatment. If approved, the three-arm feasibility study is targeted for read-out in April 2020.  

CE Mark Clearance for Next Generation 2.0 Platform in Europe

In April 2019, the Company received CE Mark clearance for its next generation Viveve 2.0 CMRF system and tips in European Union and European Economic Area countries. As part of our ongoing regulatory strategy to expand the commercial launch of our Viveve 2.0 CMRF system globally, the Company’s next generation system and its consumable treatment tips are now available in over 30 countries in Europe. The Company’s Viveve 2.0 CMRF system significantly reduced manufacturing costs for both the next generation system and for the consumable tips since becoming available in the U.S. and it should have a positive impact on our overall gross margins going forward.

Enrollment Completed in VIVEVE II Clinical Study 

In March 2019, enrollment was completed for the VIVEVE II (VIveve treatment of the Vaginal Introitus to EValuate Effectiveness clinical study following IDE approval by the FDA. This is a prospective, randomized, double-blind, sham controlled study to evaluate the efficacy and safety of the Viveve System to improve symptoms of female sexual disfunction, associated with vaginal laxity. Nineteen (19) active clinical sites in the United States enrolled 250 female patients who were pre-menopausal, 18 years of age or older who experienced at least one full term vaginal delivery at least twelve months prior to enrollment date, randomized in a 2:1 ratio to either an active treatment group or sham-control group. Patients will be followed for twelve months post-treatment to assess the primary effectiveness and safety endpoints of the study with data being collected at one, three, six, nine and twelve months. Patients randomized to the sham arm will be offered the opportunity to receive a Viveve treatment once they have completed the twelve-month evaluation following the sham intervention.

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The primary efficacy endpoint of the study is the mean change from baseline in the Female Sexual Function Index (FSFI) total score at twelve months post treatment. Secondary endpoints include evaluation of the mean change from baseline of the total FSFI score at six months, as well as evaluation of the mean change from baseline of the six different domains within the FSFI at six and twelve months. At months six and twelve, in addition to the FSFI, subjects will be asked to complete the Patient’s Global Impression of Improvement (PGI-I). Subjects will also be assessed for adverse events throughout the study. The Company intends to report final twelve-month clinical data from the study in the second quarter of 2020.

Clinical Results Reported from LIBERATE-International SUI Trial 

In August 2019, clinical results for the LIBERATE-International study in stress urinary incontinence ("SUI") were reported by the Company. While the study did not meet its primary endpoint, review of the full clinical data demonstrates a consistency of benefit at six months post-treatment across all endpoints in the majority of patients within both groups. The Company further analyzed the results and announced in September 2019 a potential strategic path forward for its SUI clinical development program. An Investigational Testing Application was submitted to the Canadian Ministry of Health and is under review for approval to conduct a three-arm, three-month SUI feasibility study.

In July 2019, topline results for the LIBERATE-International study in SUI were reported by the Company. Statistical significance was not achieved on the primary endpoint of mean change from baseline on the 1-hour Pad Weight Test at six months post-treatment compared to the control group. The median change from baseline at six months post-treatment was -8.0g in the active group of 66 subjects (baseline median 12.8g) and -8.0g in the sham-control group of 33 subjects (baseline median 12.9g).

LIBERATE International was a randomized, double-blind, sham-controlled study conducted at 9 sites in Canada and included enrollment of 99 patients suffering from mild-to-moderate SUI. Patients were randomized in a 2:1 ratio to either an active CMRF treatment (RF and cryogen-cooling) group or sham-control (cryogen-cooling only) group. Patients were followed for six months post-treatment to assess the primary effectiveness and safety endpoints of the study with data being collected at one, three and six months.

The primary efficacy endpoint was the 6-month change from baseline in the one-hour pad weight test, and the study protocol included 6 months of safety follow-up, as well as assessments of other secondary endpoints, including: 24-hour pad weight test, daily incontinence episodes, as well as composite scores from the validated UDI-6 (Urogenital Distress Inventory-Short Form), IIQ-7 (Incontinence Impact Questionnaire), and ICIQ-UI-SF (International Consultation on Incontinence Questionnaire-Urinary Incontinence-Short Form) outcome questionnaires.

Health Canada issued an authorization to conduct the investigational testing. The study was conducted in Canada to evaluate support for SUI indications in Canada, the European Union and several other international countries.

Reported Positive Twelve-Month Data from SUI Feasibility Study

In December 2018, the Company reported positive twelve-month interim data from its SUI feasibility study.  At twelve months post-treatment, 72% of women experienced improvement in one-hour pad weight test and 60% of patients experienced significant benefit as they had ≤ 1 gram of urine leakage in the one-hour pad weight test at twelve months. A clinically meaningful benefit was achieved across all patient-reported SUI symptoms and quality of life outcome measures. No device-related safety issues were reported for any of the patients.

This single-arm feasibility study included 36 subjects with mild to moderate SUI (based on the one-hour pad weight test) who underwent treatment with Viveve’s CMRF technology under a proprietary treatment protocol. Clinical results included the objective one-hour pad weight test and seven-day bladder voiding diary, as well as composite scores from multiple validated patient-reported outcomes, including: UDI-6 (Urogenital Distress Inventory-Short Form), IIQ-7 (Incontinence Impact Questionnaire) and ICIQ-UI-SF (International Consultation on Incontinence Questionnaire-Urinary Incontinence-Short Form).

Submission of IDE to FDA for Approval to Conduct SUI Trial in the United States

In September 2018, the Company submitted an Investigational Device Exemption (IDE) to the U.S. Food and Drug Administration (FDA) for authorization to begin LIBERATE-U.S., a multicenter, randomized, double-blinded, sham-controlled trial to evaluate the safety and efficacy of the Company’s proprietary CMRF technology for the improvement of SUI in women. Intended enrollment for the LIBERATE-U.S. trial is approximately 240 subjects at up to 25 study sites in the United States. Subjects will be randomized in a 2:1 ratio for active and sham treatments.

In October 2018, the FDA sent a letter to the Company stating that the FDA did not approve the IDE submission for the LIBERATE-U.S. study and requested the Company to submit additional safety testing as part of an IDE re-submission.  Viveve has had ongoing discussions with the FDA regarding such safety testing.  The decision and timing to conduct the safety testing and re-submit the IDE to the FDA upon testing completion is under strategic assessment by the Company and pending results of the SUI feasibility study for which an ITA has been submitted and is in review by Health Canada for authorization to conduct.

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U.S. Commercial Sales Transition to Recurring Revenue Rental Model

In June 2019, U.S. sales of the Viveve System transitioned from a capital equipment sales model to a recurring revenue rental model. The new U.S. commercial sales model is intended to lower up-front costs for customers and thus lower hurdles to adoption, increase placement rates, and improve profitability by significantly reducing selling time per unit. The new commercial sales model successfully increased physician adoption rates in the first month and is continuing to gain traction in the U.S. market. In June 2019, Viveve Systems placed with new customers represented a higher monthly productivity rate per sales representative than any prior month in the company’s history. Sale of Viveve products outside of the U.S. will continue to be supported by the Company’s current distributors without significant change to the international business model.

Under the recurring revenue rental model, customers may lease the Viveve System for a set initial term. After the initial term, the customer may purchase the Viveve System, continue to pay a monthly rental amount or terminate the contract.

The rental program is accounted for under ASU Topic 842 and meets the classification criteria for an operating lease. Revenue from the rental program is included in revenue and is currently not a material amount. The Viveve Systems that are being leased are included in property and equipment, net and depreciated over their expected useful lives of 5 years. When other products (“nonlease components”), such as single-use treatment tips or ancillary consumables, are included in the offering, the Company follows the relevant guidance in ASC 606, Revenue from Contracts with Customers, to determine how to allocate contractual consideration between the lease and nonlease components.

Strategic Organizational Realignment

In January 2019, the Company implemented a strategic and organizational realignment plan (the “Strategic Organizational Realignment”) to reduce operating expenses and prepare the Company for expanded indications for its CMRF technology platform for improved sexual function and stress urinary incontinence in women. The Strategic Organizational Realignment included a reduction in total headcount of approximately 40 full-time employees. It also included a nearly two-thirds reduction in the Company’s direct sales organization, which has been repositioned to provide targeted market development activities to further expand awareness and adoption of Viveve’s CMRF technology in the before mentioned medical specialties. The Company’s current and prospective aesthetic medicine customers in the U.S. will be supported by a network of distributor partners under Viveve’s direction. International commercial distribution will remain unchanged through Viveve’s global network of distributor partners. The total restructuring costs for employee severance and other related termination benefits were approximately $742,000 and it was recorded in the quarter ended March 31, 2019. This restructuring contributed to a reduction in our total operating expenses in the first quarter of 2019 as planned and is expected to result in additional operating cost savings throughout the remainder of this year.

 Adoption of New Accounting Standard - Leases

The Company adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASU”) No. 2016-02, Leases (Topic 842), as of January 1, 2019, using the modified retrospective approach. The modified retrospective approach provides a method for recording existing leases at the beginning of the period of adoption. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification and we elected the hindsight practical expedient to determine the lease term for existing leases. We determined that the renewal options for the facilities lease would be reasonably certain to be renewed and as such, included that renewal period in determining the expected lease term of that lease. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

Plan of Operation

We intend to increase our sales both internationally and in the U.S. market by seeking additional regulatory clearances or approvals for the sale and distribution of our products, identifying and training qualified distributors, and expanding the scope of physicians who offer the Viveve System to include plastic surgeons, general surgeons, urologists and urogynecologists. 

In June 2019, we transitioned from a capital equipment sales model to a recurring revenue rental model in the U.S. market. The new U.S. commercial sales model is intended to lower up-front costs for customers and thus lower hurdles to adoption, increase placement rates, and improve profitability by significantly reducing selling time per unit. Sale of Viveve products outside of the U.S. will continue to be supported by our international distributors.

In addition, we intend to use the strategic relationships that we have developed with outside contractors and medical experts to improve our products 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; and

● developing new RF consoles.

29

The net proceeds received from sales of our securities and the term loans have been used 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 our cash will be sufficient to fund our current operations through December 31, 2019; however, we will require additional capital from the sale of equity or debt securities to fully implement our plan of operation. 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, as amended (the “Exchange Act”). We also expect to incur expenses related to obtaining regulatory clearance and approvals in the U.S. and internationally as well as legal and related expenses to protect our intellectual property. We expect capital expenditures, for the foreseeable future, to be less than $500,000 annually.

We intend to continue to meet our operating cash flow requirements through the sales of our products and by raising additional capital 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 strategic 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 Quarterly Report on Form 10-Q, we do not have any committed sources of financing and there are no assurances that we will be able to secure additional funding, or if we do secure additional financing that it will be on terms that are favorable to us. If we cannot obtain financing, then we may be forced to curtail our operations or consider other strategic alternatives.

Results of Operations 

Comparison of the Three Months Ended September 30, 2019 and 2018

Revenue

	Three Months Ended
	September 30,				Change
	2019		2018		$			%
	(in thousands, except percentages)
Revenue	$	1,052	$	4,821	$	(3,769	)		(78	)%

We recorded revenue of $1,052,000 for the three months ended September 30, 2019, compared to revenue of $4,821,000 for the three months ended September 30, 2018, a decrease of $3,769,000, or approximately 78%. The decrease in revenue was primarily due to lower sales volume of Viveve Systems sold as the Company transitioned its U.S. commercial sales model to a recurring revenue rental model versus selling systems under a capital equipment sales model. Sales in the third quarter of 2019 included 6 Viveve Systems and approximately 1,300 disposable treatment tips sold globally. Under the new subscription offering program, which was launched in June 2019, the Company placed 25 Viveve Systems in the U.S. market in the third quarter of 2019. Rental revenue on these leases will be recognized on a straight-line basis over the term of the lease (upon completion of system installation and training). Sales in the third quarter of 2018 included 64 Viveve Systems (which included 48 Viveve Systems sold in the U.S. market - 30 Viveve Systems through direct sales and 18 Viveve Systems through our distribution partner) and approximately 5,700 disposable treatment tips sold globally.

Gross profit (loss)

	Three Months Ended
	September 30,					Change
	2019			2018		$			%
	(in thousands, except percentages)
Gross profit (loss)	$	(47	)	$	1,494	$	(1,541	)		(103	)%

 Gross loss was ($47,000), or (4%) of revenue, for the three months ended September 30, 2019, compared to a gross profit of $1,494,000, or 31% of revenue, for the three months ended September 30, 2018, a decrease of $1,541,000, or approximately 103%. The decrease in gross profit was primarily due to the lower sales volume of Viveve Systems sold as the Company transitioned its U.S. business model to a recurring revenue rental model versus selling systems under a capital equipment sales model during the second quarter of 2019.

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Research and development expenses

	Three Months Ended
	September 30,				Change
	2019		2018		$			%
	(in thousands, except percentages)
Research and development	$	1,449	$	3,442	$	(1,993	)		(58	)%

 Research and development expenses totaled $1,449,000, for the three months ended September 30, 2019, compared to research and development expense of $3,442,000 for the three months ended September 30, 2018, a decrease of $1,993,000, or approximately 58%. Spending on research and development decreased in the third quarter of 2019 primarily due to reduced engineering and development work related to our products in the period as well as certain cost savings in connection with the Company’s Strategic Organizational Realignment which occurred in the first quarter of 2019. Research and development expense during the three months ended September 30, 2019 also included lower clinical study costs primarily due to the completion and readout of our LIBERATE-International SUI clinical trial in July 2019. Research and development spending in the third quarter of 2018 included higher costs associated with engineering and development work with our contract manufacturer related to product improvement efforts primarily for our next generation 2.0 platform in advance of the 2018 commercial product release as well as higher clinical study costs associated with our clinical development programs in female sexual function and SUI .

Selling, general and administrative expenses   

	Three Months Ended
	September 30,				Change
	2019		2018		$			%
	(in thousands, except percentages)
Selling, general and administrative	$	5,032	$	9,114	$	(4,082	)		(45	)%

Selling, general and administrative expenses totaled $5,032,000 for the three months ended September 30, 2019, compared to $9,114,000 for the three months ended September 30, 2018, a decrease of $4,082,000, or approximately 45%. The decrease in selling, general and administrative expenses in the third quarter of 2019 was primarily due to certain cost savings in connection with the Company’s Strategic Organizational Realignment which occurred in the first quarter of 2019 as well as lower professional and legal fees associated with our intellectual property. 

Interest expense, net 

	Three Months Ended
	September 30,				Change
	2019		2018		$		%
	(in thousands, except percentages)
Interest expense, net	$	1,209	$	1,106	$	103		9	%

  During the three months ended September 30, 2019, we had interest expense, net of $1,209,000, compared to $1,106,000 for the three months ended September 30, 2018. The increase of $103,000, or approximately 9%, resulted primarily from the additional interest expense in 2019, which was computed on a higher term loan balance compared to 2018 due to the interest in-kind which has been added to the total outstanding principal loan amount each quarterly period.

Other expense, net

	Three Months Ended
	September 30,						Change
	2019			2018			$			%
	(in thousands, except percentages)
Other expense, net	$	(51	)	$	(4	)	$	(47	)		NM

During the three months ended September 30, 2019, we had other expense, net, $51,000, compared to 4,000 for the three months ended September 30, 2018.

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Loss from minority interest in limited liability company

	Three Months Ended
	September 30,				Change
	2019		2018		$		%
	(in thousands, except percentages)
Loss from minority interest in limited liability company	$	168	$	132	$	36		27	%

The Company uses the equity method to account for its investment in InControl Medical, LLC (“ICM”). For the three months ended September 30, 2019, the allocated net loss from ICM’s operations was $168,000, compared to $132,000 for the three months ended September 30, 2018       

Comparison of the Nine Months Ended September 30, 2019 and 2018

Revenue

	Nine Months Ended
	September 30,				Change
	2019		2018		$			%
	(in thousands, except percentages)
Revenue	$	5,116	$	14,045	$	(8,929	)		(64	)%

 We recorded revenue of $5,116,000 for the nine months ended September 30, 2019, compared to revenue of $14,045,000 for the nine months ended September 30, 2018, a decrease of $8,929,000, or approximately 64%. The decrease in revenue was primarily due to lower sales volume of Viveve Systems sold as the Company transitioned its U.S. commercial sales model to a recurring revenue rental model versus selling systems under a capital equipment sales model. In the nine months ended September 30, 2019 sales of 53 Viveve Systems (which included 30 Viveve Systems sold in the U.S. market – 19 Viveve Systems through direct sales and 11 Viveve Systems through our U.S. distribution partner) and approximately 5,850 disposable treatment tips sold globally. Under the new subscription offering program, which was launched in June 2019, the Company placed 49 Viveve Systems in the U.S. market. Rental revenue on these leases will be recognized on a straight-line basis over the term of the lease (upon completion of system installation and training). Sales in the nine months ended September 30, 2018 included 202 Viveve Systems (which included 155 Viveve Systems sold in the U.S. market – 137 Viveve Systems through direct sales and 18 Viveve Systems through our distribution partner), and higher quantities of disposable products sold (which included approximately 13,800 disposable treatment tips sold globally).

Gross profit

	Nine Months Ended
	September 30,				Change
	2019		2018		$			%
	(in thousands, except percentages)
Gross profit	$	1,135	$	5,655	$	(4,520	)		(80	)%

 Gross profit was $1,135,000, or 22% of revenue, for the nine months ended September 30, 2019, compared to a gross profit of $5,655,000 or 40% of revenue, for the nine months ended September 30, 2018, a decrease of $4,520,000, or approximately 80%. The decrease in gross profit was primarily due to the lower sales volume of Viveve Systems sold as the Company transitioned its U.S. business model to a recurring revenue rental model versus selling systems under a capital equipment sales model in the second quarter of 2019.

Research and development expenses  

	Nine Months Ended
	September 30,				Change
	2019		2018		$			%
	(in thousands, except percentages)
Research and development	$	6,831	$	10,870	$	(4,039	)		(37	)%

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Research and development expenses totaled $6,831,000 for the nine months ended September 30, 2019, compared to research and development expense of $10,870,000 for the nine months ended September 30, 2018, a decrease of $4,039,000 or approximately 37%. Spending on research and development decreased in the first half of 2019 primarily due to reduced engineering and development work related to our products in the period as well as certain cost savings in connection with the Company’s Strategic Organizational Realignment, partially offset by higher clinical study costs associated with our clinical development programs in female sexual function and SUI. Research and development spending in the first half of 2018 included higher costs associated with engineering and development work with our contract manufacturer related to product improvement efforts primarily for our next generation 2.0 platform in advance of the 2018 commercial product release.

Selling, general and administrative expenses  

	Nine Months Ended
	September 30,				Change
	2019		2018		$			%
	(in thousands, except percentages)
Selling, general and administrative	$	17,188	$	27,482	$	(10,294	)		(37	)%

 Selling, general and administrative expenses totaled $17,188,000 for the nine months ended September 30, 2019, compared to $27,482,000 for the nine months ended September 30, 2018, a decrease of $10,294,000 or approximately 37%. The decrease in selling, general and administrative expenses in the first half of 2019 was primarily due to certain cost savings in connection with the Company’s Strategic Organizational Realignment as well as lower professional and legal fees associated with our intellectual property. Selling, general and administrative expenses in the first half of 2018 included higher professional and legal fees associated with strategies to protect the Company’s intellectual property. In June 2018, we reached a favorable settlement in the Company’s patent infringement litigation with ThermiGen, LLC.

Restructuring costs

	Nine Months Ended
	September 30,				Change
	2019		2018		$		%
	(in thousands, except percentages)
Restructuring costs	$	742	$	-	$	742		-

In January 2019, the Company implemented the Strategic Organizational Realignment to reduce operating expenses and prepare the Company for expanded indications for its CMRF technology platform for improved sexual function and stress urinary incontinence in women. The restructuring included a reduction in headcount of approximately 40 full-time employees. The total restructuring costs recorded for the nine months ended September 30, 2019 were approximately $742,000. This restructuring contributed to a reduction in total operating expenses in the second quarter of 2019 as planned and is expected to result in additional operating cost savings throughout the remainder of this year.

Interest expense, net  

	Nine Months Ended
	September 30,				Change
	2019		2018		$		%
	(in thousands, except percentages)
Interest expense, net	$	3,519	$	3,239	$	280		9	%

During the nine months ended September 30, 2019, we had interest expense, net of $3,519,000, compared to $3,239,000 for the nine months ended September 30, 2018. The increase of $280,000, or approximately 9%, resulted primarily from the additional interest expense in the first half of 2019, which was computed on a higher term loan balance compared to the first half of 2018 due to the interest in-kind which has been added to the total outstanding principal loan amount each quarterly period.

Other expense, net  

	Nine Months Ended
	September 30,				Change
	2019		2018		$		%
	(in thousands, except percentages)
Other expense, net	$	133	$	14	$	119		NM

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During the nine months ended September 30, 2019, we had other expense, net, of $133,000, compared to $14,000 for the nine months ended September 30, 2018.

 Loss from minority interest in limited liability company

	Nine Months Ended
	September 30,				Change
	2019		2018		$			%
	(in thousands, except percentages)
Loss from minority interest in limited liability company	$	431	$	539	$	(108	)		(20	)%

The Company uses the equity method to account for its investment in ICM. For the nine months ended September 30, 2019, the allocated net loss from ICM’s operations was $431,000, compared to $539,000 for the nine months ended September 30, 2018.

Liquidity and Capital Resources

Comparison of the Nine Months Ended September 30, 2019 and 2018

Since inception, the Company has sustained significant operating losses and such losses are expected to continue for the foreseeable future. As of September 30, 2019, the Company had an accumulated deficit of $183,094,000, cash and cash equivalents of $9,086,000 and working capital of $12,836,000. Additionally, the Company used $6,608,000 in cash for operations in the three months ended September 30, 2019 and $25,862,000 in cash for operations for the nine months ended September 30, 2019. The Company will require additional cash funding to fund operations through November 2020. Accordingly, management has concluded that the Company does not have sufficient funds to support operations within one year after the date the financial statements are issued and, therefore, the management has concluded there was substantial doubt about the Company’s ability to continue as a going concern.

To fund further operations, the Company will need to raise additional capital. The Company may obtain additional financing in the future through the issuance of its common stock, or through other equity or debt financings. The Company’s ability to continue as a going concern or meet the minimum liquidity requirements in the future is dependent on its ability to raise significant additional capital, of which there can be no assurance. If the necessary financing is not obtained or achieved, the Company will likely be required to reduce our operating costs and other expenditures, including reductions of personnel, salaries and capital expenditures. Alternatively, or in addition to such potential measures, we may elect to implement additional cost reduction actions as we may determine are necessary and in our best interests. Any such actions undertaken might limit the Company’s ability to achieve its strategic objectives. There can be no assurance that financing will be available on acceptable terms, or at all. These factors raise substantial doubt about the Company’s ability to continue as a going concern and have a material adverse effect on the Company’s future financial results, financial position and cash flows.

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

	Nine Months Ended
	September 30,
	2019			2018
Net cash used in operating activities	$	(25,862	)	$	(33,245	)
Net cash used in investing activities		(848	)		(983	)
Net cash provided by financing activities		6,273			33,595
Net decrease in cash and cash equivalents	$	(20,437	)	$	(633	)

Operating Activities

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

Operating activities used $25,862,000 for the nine months ended September 30, 2019 compared to $33,245,000 used for the nine months ended September 30, 2018. 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 during the nine months ended September 30, 2019 consisted of a net loss of $27,709,000 adjusted for non-cash expenses including provision for doubtful accounts of $260,000, depreciation and amortization of $819,000, stock-based compensation of $1,634,000, non-cash interest expense of $1,266,000, loss from minority interest in limited liability company of $431,000, loss on disposal of property and equipment of $93,000 and cash outflows from changes in operating assets and liabilities of $2,660,000. The change in operating assets and liabilities was primarily due to a decrease in accounts payable of $2,203,000, a decrease in accrued and other liabilities of $2,566,000, an increase in inventory of $236,000, an increase in prepaid expenses and other current assets of $493,000, partially offset by a decrease in accounts receivable of $2,638,000, an increase in other noncurrent liabilities of $160,000, and an increase in other noncurrent assets of $40,000. Net cash used during the nine months ended September 30, 2018 consisted of a net loss of $36,489,000 adjusted for non-cash expenses including provision for doubtful accounts of $83,000, depreciation and amortization of $545,000, stock-based compensation of $2,294,000, fair value of common stock issued of $256,000, non-cash interest expense of $1,176,000, loss from minority interest in limited liability company of $539,000, and cash outflows from changes in operating assets and liabilities of $1,669,000. The change in operating assets and liabilities was primarily due to a decrease in accounts receivable of $1,119,000, increase in inventory of $2,317,000, a decrease in prepaid expenses and other current assets of $61,000, a decrease in accounts payable of $1,297,000, an increase in accrued and other liabilities of $502,000, and an increase in other noncurrent liabilities of $262,000.

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Investing Activities

Net cash used in investing activities during the nine months ended September 30, 2019 and 2018 was $848,000 and $983,000, respectively. Net cash used in investing activities during the nine months ended September 30, 2019 and 2018 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 any changes to the capital equipment requirements related to our development programs and clinical trials.

Financing Activities

Net cash provided by financing activities during the nine months ended September 30, 2019 was $6,273,000, which was the result of gross proceeds of $6,760,000 from our August 2019 ATM Facility (partially offset by transaction costs of $438,000) and the proceeds of $56,000 from purchases of common shares under the 2017 ESPP, partially offset by transaction costs of $100,000 in connection with our note payable.

Net cash provided by financing activities during the nine months ended September 30, 2018 was $33,595,000, which was the result of the gross proceeds of $34,500,000 from our February 2018 Offering (partially offset by transaction costs of $2,287,000) and gross proceeds of $1,327,000 from our November 2017 ATM Facility (partially offset by transaction costs of $133,000).

As of September 30, 2019, there is a balance of $35,016,000 available for future issuance under the 2017 Shelf Registration Statement following the termination of our November 2017 ATM Facility and the use of our August 2019 ATM Facility. However, the Company is subject to the limitations under General Instruction I.B.6. As of September 30, 2019, the Company had no capacity to issue shares under the 2017 Shelf Registration Statement due to these limitations.

Contractual Payment Obligations

We have obligations under a bank term loan and non-cancelable operating leases. As of September 30, 2019, our contractual obligations are as follows (in thousands):

			Less than						More than
Contractual Obligations:	Total		1 Year		1 - 3 Year		3 -5 Years		5 Years
Debt obligations (including interest)	$	45,810	$	2,871	$	32,095	$	10,844	$	-
Non-cancellable operating lease obligations		239		209		30		-		-
Total	$	46,049	$	3,080	$	32,125	$	10,844	$	-

On February 1, 2017, we entered into a Sublease for approximately 12,400 square feet of building space for the relocation of the Company’s corporate headquarters to Englewood, Colorado. The lease term is 36 months and the monthly base rent for the first, second and third years is $20.50, $21.12 and $21.75 per rentable square foot, respectively. In connection with the execution of the Sublease, the Company paid a security deposit of approximately $22,000. The Company is also entitled to an allowance of approximately $88,000 for certain tenant improvements relating to the engineering, design and construction of the Sublease Premises. The lease term commenced in June 2017 and will terminate in May 2020.

On May 22, 2017, the Company entered into the 2017 Loan Agreement with affiliates of CRG LP (“CRG”). The credit facility consists of $20,000,000 that was drawn at closing and the ability to access additional funding of up to an aggregate of $10,000,000 for a total of $30,000,000 under the credit facility. On December 29, 2017, the Company accessed the remaining $10,000,000 available under the credit facility. The term of the loan is six years with the first four years being interest only. The outstanding principal balance under the 2017 Loan Agreement is $32,723,000 as of September 30, 2019.

In September 2018, the Company entered into a 36-month noncancelable operating lease agreement for office equipment.  The lease commenced on September 20, 2018.  The monthly payment is approximately $3,000. 

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Critical Accounting Policies and Estimates

The discussion and analysis of financial condition and results of operations is based upon our condensed consolidated 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 audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018, that was filed with the SEC on March 15, 2019, for a more complete description of our significant accounting policies. Except for the adoption of the new leases accounting standard on January 1, 2019, there have been no material changes to the significant accounting policies during the nine months ended September 30, 2019.

Recent Accounting Pronouncements

The Company adopted FASB’s ASU No. 2016-02, Leases (Topic 842), as of January 1, 2019, using the modified retrospective approach. The modified retrospective approach provides a method for recording existing leases at the beginning of the period of adoption. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification and we elected the hindsight practical expedient to determine the lease term for existing leases. We determined that the renewal options for the facilities lease would be reasonably certain to be renewed and as such, included that renewal period in determining the expected lease term of that lease. Adoption of the new standard resulted in the recording of operating lease right-of-use assets of $629,000 and operating lease liabilities of $629,000, as of January 1, 2019. The standard did not have an impact on our consolidated results of operations, cash flows or stockholders’ equity previously reported. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

In June 2018, the FASB issued ASU 2018-07, “Stock Compensation (Topic 718) – Improvements to Nonemployee Share- Based Payment Accounting”. The intent of this guidance is to simplify the accounting for nonemployee share-based payment accounting. The amendments in this guidance expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. Equity- classified nonemployee share-based payment awards are measured at the grant date. Consistent with the accounting for employee share-based payment awards, an entity considers the probability of satisfying performance conditions when nonemployee share-based payment awards contain such conditions. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within the reporting period. We adopted this guidance as of January 1, 2019 and the adoption of the guidance did not have a significant impact on the condensed consolidated financial statements.

We have reviewed other recent accounting pronouncements and concluded they are either not applicable to the business, or no material effect is expected on the consolidated financial statements as a result of future adoption.

Nasdaq Delisting Notice

On May 13, 2019, we received written notice (the “First Notification Letter”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that we are not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of thirty (30) consecutive business days. Based on the closing bid price of our common stock for the thirty (30) consecutive business days from March 28, 2019 to May 10, 2019, we no longer meet the minimum bid price requirement.

The First Notification Letter states that we have 180 calendar days, or until November 11, 2019, to regain compliance with Nasdaq Listing Rule 5550(a)(2). To regain compliance, the bid price of our common stock must have a closing bid price of at least $1.00 per share for a minimum of ten (10) consecutive business days. If we do not regain compliance with Nasdaq Listing Rule 5550(a)(2) by November 11, 2019, we may be eligible for an additional 180 calendar day compliance period. To qualify, we would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and would need to provide written notice of our intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary. On September 18, 2019, we effected a 1-for-100 reverse stock split of our issued and outstanding shares of common stock. On October 3, 2019, the Company was notified by Nasdaq that as of October 2, 2019, it had maintained a closing bid above $1.00 for a period of 10 consecutive trading days and therefore had regained compliance with the minimum bid price requirement.

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We intend to monitor the closing bid price of our common stock and may, if appropriate, consider implementing available options, including, but not limited to, implementing a reverse stock split of our outstanding securities, to regain compliance with the minimum bid price requirement under the Nasdaq Listing Rules.

Additionally, on May 21, 2019, we received written notice (the “Second Notification Letter”) from the Listing Qualifications Department of Nasdaq notifying us that we are not in compliance with the market value of listed securities requirements set forth in Nasdaq Listing Rule 5550(b)(2), or the alternative standards of Nasdaq Listing Rule 5550(b)(1), which requires a listed company to have minimum stockholders’ equity of $2.5 million, or Nasdaq Listing Rule 5550(b)(3), which requires a listed company to have had net income from continuing operations of at least $500,000 in the latest fiscal year or in two of the last three fiscal years. Nasdaq Listing Rule 5550(b)(2) requires listed securities to maintain a market value of at least $35 million for the previous thirty (30) consecutive business days for continued listing on The Nasdaq Capital Market. Based on our market value of listed securities for the thirty (30) consecutive business days from April 8, 2019 to May 20, 2019, we no longer meet the market value of listed securities requirement. In addition, we do not satisfy the alternative requirements of sufficient minimum stockholders’ equity or sufficient net income from continuing operations.

The Second Notification Letter does not impact our listing on The Nasdaq Capital Market at this time. The Second Notification Letter states that we have 180 calendar days, or until November 18, 2019, to regain compliance with Nasdaq Listing Rule 5550(b)(2). Alternatively, we could gain compliance with Nasdaq Listing Rule 5550(b)(1) or Nasdaq Listing Rule 5550(b)(3). In order to regain compliance with Nasdaq Listing Rule 5550(b)(2), we must maintain a market value of listed securities of at least $35 million for a minimum of ten (10) consecutive business days. If we do not regain compliance with Nasdaq Listing Rule 5550(b)(2) or, alternatively, gain compliance with Nasdaq Listing Rule 5550(b)(1) or Nasdaq Listing Rule 5550(b)(3), prior to the expiration of the compliance period, Nasdaq would notify us that our securities would be subject to delisting. In the event of such a notification, we may appeal the Staff’s determination to delist our securities, but there can be no assurance the Staff would grant our request for continued listing. Unlike the minimum bid price noncompliance described in the First Notification Letter, no additional compliance period is applicable to the noncompliance described in the Second Notification Letter.

If in the future we are not able to maintain compliance with the minimum bid price requirement within an allotted grace period, our shares of common stock would be subject to delisting. The Company is also not currently in compliance with the minimum stockholder equity requirement under the Nasdaq continued listing standards. In the event that our common stock is not eligible for continued listing on Nasdaq or another national securities exchange, trading of our common stock could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such event, it could become more difficult to dispose of, or obtain accurate price quotations for, our common stock, and there would likely also be a reduction in our coverage by security analysts and the news media, which could cause the price of our common stock to decline further. Also, it may be difficult for us to raise additional capital if we are not listed on a major exchange.

Off-Balance Sheet Transactions

We do not have any off-balance sheet transactions.

Trends, Events and Uncertainties

Research, development and commercialization of new technologies and products is, by its nature, unpredictable. Although we will undertake development efforts, including efforts with commercially reasonable diligence, there can be no assurance that we will have adequate capital to develop or commercialize 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 Quarterly Report on Form 10-Q, we are not aware of any trends, events or uncertainties that are likely to have a material effect on our financial condition.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risk related to changes in interest rates. As of September 30, 2019, our cash and cash equivalents consisted of cash and interest-bearing accounts. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates. However, since a majority of our investments are in highly liquid interest-bearing accounts, we do not believe we are subject to any material market risk exposure.  As of September 30, 2019, we did not have any material derivative financial instruments.  The fair value of our cash and cash equivalents was $9.1 million as of September 30, 2019.

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We are also exposed to market risk related to changes in foreign currency exchange rates. From time to time, we contract with vendors or service providers that are located outside the U.S., which are denominated in foreign currencies. We are subject to fluctuations in foreign currency rates in connection with these agreements. We do not currently hedge our foreign currency exchange rate risk. As of September 30, 2019, and December 31, 2018, we had minimal liabilities denominated in foreign currencies.

We do not believe that inflation had a material effect on our business, financial condition or results of operations during the nine months ended September 30, 2019 and 2018.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer, as appropriate, to allow timely decisions regarding required disclosure. 

We carried out an evaluation under the supervision and with the participation of management, including our principal executive officer and principal financial and accounting officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2019, the end of the period covered by this Quarterly Report. Based upon the evaluation of our disclosure controls and procedures as of September 30, 2019, our Chief Executive Officer (principal executive officer) and Vice President of Finance and Administration (principal accounting and financial officer) concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

No changes in the Company's internal control over financial reporting have come to management's attention during the Company's last fiscal quarter that have materially affected, or are likely to materially affect, the Company's internal control over financial reporting.

PART II-OTHER INFORMATION

Item 1. Legal Proceedings.

Except as disclosed below and in our Annual Report on Form 10-K for the year ended December 31, 2018, we are not subject to any material pending legal proceedings. From time to time, we may be involved in routine legal proceedings, as well as demands, claims and threatened litigation, which arise in the normal course of our business.

Item 1A. Risk Factors.

We incorporate herein by reference the risk factors included in the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2019. 

We may not be able to comply with all applicable listing requirements or standards of The Nasdaq Capital Market and Nasdaq could delist our common stock.

Our common stock is currently listed on The Nasdaq Capital Market. In order to maintain that listing, we must satisfy minimum financial and other continued listing requirements and standards. One such requirement is that we maintain a minimum bid price of at least $1.00 per share for our common stock. For example, in May 2019, we received a letter from the Listing Qualifications Department of The Nasdaq Stock Market (Nasdaq) advising us that for 30 consecutive trading days preceding the date of the Notice, the bid price of our common stock had closed below the $1.00 per share minimum required for continued listing on The Nasdaq Global Select Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the Minimum Bid Price Requirement).

On September 18, 2019, we filed a Certificate of Amendment to our Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a 1-for-100 reverse stock split of our issued and outstanding common stock. The reverse stock split became effective at 5:00 p.m. Eastern Time on September 18, 2019 and our common stock began trading on a split-adjusted basis on The Nasdaq Capital Market on September 19, 2019. All issued and outstanding common stock, options and warrants exercisable for common stock, restricted stock units, preferred stock conversions into common stock and per share amounts contained in our condensed consolidated financial statements have been retrospectively adjusted.

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On October 3, 2019, we were notified by Nasdaq that as of October 2, 2019 we had maintained a closing bid above $1.00 for a period of 10 consecutive trading days and therefore had regained compliance with the Minimum Bid Price Requirement. There can be no assurance that we will continue to be in compliance with the $1.00 minimum bid price requirement or comply with Nasdaq’s other continued listing standards in the future.

In addition, on May 21, 2019, we received written notice (the “Second Notification Letter”) from the Listing Qualifications Department of Nasdaq notifying us that we are not in compliance with the market value of listed securities requirements set forth in Nasdaq Listing Rule 5550(b)(2), or the alternative standards of Nasdaq Listing Rule 5550(b)(1), which requires a listed company to have minimum stockholders’ equity of $2.5 million, or Nasdaq Listing Rule 5550(b)(3), which requires a listed company to have had net income from continuing operations of at least $500,000 in the latest fiscal year or in two of the last three fiscal years. Nasdaq Listing Rule 5550(b)(2) requires listed securities to maintain a market value of at least $35 million for the previous thirty (30) consecutive business days for continued listing on The Nasdaq Capital Market. Based on our market value of listed securities for the thirty (30) consecutive business days from April 8, 2019 to May 20, 2019, we no longer meet the market value of listed securities requirement. In addition, we do not satisfy the alternative requirements of sufficient minimum stockholders’ equity or sufficient net income from continuing operations.

The Second Notification Letter states that we have 180 calendar days, or until November 18, 2019, to regain compliance with Nasdaq Listing Rule 5550(b)(2). Alternatively, we could gain compliance with Nasdaq Listing Rule 5550(b)(1) or Nasdaq Listing Rule 5550(b)(3). In order to regain compliance with Nasdaq Listing Rule 5550(b)(2), we must maintain a market value of listed securities of at least $35 million for a minimum of ten (10) consecutive business days. If we do not regain compliance with Nasdaq Listing Rule 5550(b)(2) or, alternatively, gain compliance with Nasdaq Listing Rule 5550(b)(1) or Nasdaq Listing Rule 5550(b)(3), prior to the expiration of the compliance period, Nasdaq would notify us that our securities would be subject to delisting. In the event of such a notification, we may appeal the Staff’s determination to delist our securities, but there can be no assurance the Staff would grant our request for continued listing.

 If in the future we are not able to maintain compliance with the Minimum Bid Price Requirement within an allotted grace period, our shares of common stock would be subject to delisting. The Company is also not currently in compliance with the minimum stockholder equity requirement under the Nasdaq continued listing standards. In the event that our common stock is not eligible for continued listing on Nasdaq or another national securities exchange, trading of our common stock could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such event, it could become more difficult to dispose of, or obtain accurate price quotations for, our common stock, and there would likely also be a reduction in our coverage by security analysts and the news media, which could cause the price of our common stock to decline further. Also, it may be difficult for us to raise additional capital if we are not listed on a major exchange.

We will need to raise additional funding, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations.

Developing our products is expensive, and we expect our research and development expenses to increase substantially in connection with our ongoing activities. We will continue to require substantial funds to support our clinical trials and fund our efforts to expand regulatory clearance or approval for our products, including in the U.S.

As of September 30, 2019, our cash and cash equivalents were $9.1 million and the 2017 Loan Agreement held an outstanding principal balance of $32.7 million. The 2017 Loan Agreement is collateralized by substantially all of our personal property, including our intellectual property. Under the 2017 Loan Agreement, we, as the borrower, are required to maintain cash and cash equivalents of $2.0 million and, each year through the end of 2022, to meet a minimum total annual revenue threshold, which as of September 30, 2019 and December 31, 2018 was $19.1 million and $21.0 million, respectively.

We expect that our cash and cash equivalents will be sufficient to fund our current operations through December 31, 2019. However, our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings, government or other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements or a combination of these approaches. In any event, we will require additional capital to obtain regulatory approval for, and to commercialize, our product candidates. Raising funds in the current economic environment may present additional challenges. Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations.

Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may adversely affect the holdings or the rights of our stockholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our shares to decline. The sale of additional equity or convertible securities would dilute all of our stockholders. The incurrence of indebtedness would result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or product candidate or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.

If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of any product candidate or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.

Our historical operating results indicate substantial doubt exists related to the Company's ability to continue as a going concern.

Our financial statements have been prepared assuming that our company will continue as a going concern. We have incurred net losses and used significant cash in operating activities since inception and have an accumulated deficit of approximately $183.1 million and working capital of $12.8 million as of September 30, 2019. These factors raise substantial doubt about our ability to continue as a going concern and satisfying our estimated liquidity needs 12 months from the issuance of the financial statements.

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If we continue to experience operating losses, and we are not able to generate additional liquidity through a capital raise or other cash infusion, while not expected, we may not be able to access additional funds under the 2017 Loan Agreement and we might need to secure additional sources of funds, which may or may not be available to us. Additionally, a failure to generate additional liquidity could negatively impact our ability to operate our business. Moreover, we currently believe that, without additional liquidity, we will not be in compliance with the covenants in the Company's credit agreement for the fourth quarter of 2019, which could result in an event of default and an acceleration of the indebtedness.

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

Unregistered Sales of Securities

None.

Item 3. Defaults Upon Senior Securities.

Not applicable.      

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Effective December 31, 2019 the Company is eliminating the position of President and Chief Business Officer. The Company intends to enter into a separation agreement and release of the Company and its affiliates with Mr. James Atkinson, the present President and Chief Business Officer, pursuant to the terms of the employment agreement by and between the Company and Mr. Atkinson dated as of February 27, 2018. According to such separation agreement and release, Mr. Atkinson shall receive 9 months of base salary continuation and 9 months of COBRA continuation medical benefits subsidized by the Company following his departure and 6 months of unvested options held by him shall immediately accelerate and become fully exercisable as of the date of his termination, provided that he does not revoke such separation agreement and release.

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Item 6. Exhibits.

Exhibit Number	Document
3.1.1(1)	Certificate of Conversion for Delaware
3.1.2(2)	Amended and Restated Certificate of Incorporation
3.1.3(3)	Articles of Amendment to the Articles of Continuance of Viveve Medical, Inc.
3.1.3(4)	Certificate of Amendment to the Amended and Restated Certificate of Incorporation
3.2(2)	Amended and Restated Bylaws
31.1*	Certification of the Company’s Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Company’s Principal Accounting and Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1+	Certification of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2+	Certification of the Company’s Principal Accounting and Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance
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.

+ This document is deemed not filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

(1) Incorporated by reference from the Form 10-Q filed with the Securities and Exchange Commission on May 13, 2016.

(2) Incorporated by reference from the Form 8-K filed with the Securities and Exchange Commission on August 16, 2017.

(3) Incorporated by reference from the Form 8-K filed with the Securities and Exchange Commission on April 14, 2016.

(4) Incorporated by reference from the Form 8-K filed with the Securities and Exchange Commission on September 18, 2019.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated:  November 7, 2019	VIVEVE MEDICAL, INC.
	(Registrant)
	By:	/s/ Scott Durbin
		Scott Durbin
		Chief Executive Officer (Principal Executive Officer)
	By:	/s/ Jim Robbins
		Jim Robbins
		Vice President of Finance and Administration (Principal Accounting and Financial Officer)

42

EX-31.1

Exhibit 31.1

Certification of Principal Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

I, Scott Durbin, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for Viveve Medical, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2019	/s/ Scott Durbin
	Scott Durbin
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Principal Accounting and Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

I, Jim Robbins, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for Viveve Medical, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2019	/s/ Jim Robbins
	Jim Robbins
	Vice President of Finance and Administration
	(Principal Accounting and Financial Officer)

EX-32.1

Exhibit 32.1

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (A) and (B) of Section 1350, Chapter 63 of Title 18,

United States Code)

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of Title 18, United States Code), the undersigned officer of Viveve Medical, Inc. (the “Company”), does hereby certify with respect to the Quarterly Report of the Company on Form 10-Q for the period ended September 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), that, to the best of their knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2019	/s/ Scott Durbin
	Scott Durbin
	Chief Executive Officer
	(Principal Executive Officer)

EX-32.2

Exhibit 32.2

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (A) and (B) of Section 1350, Chapter 63 of Title 18,

United States Code)

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of Title 18, United States Code), the undersigned officer of Viveve Medical, Inc. (the “Company”), does hereby certify with respect to the Quarterly Report of the Company on Form 10-Q for the period ended September 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), that, to the best of their knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2019	/s/ Jim Robbins
	Jim Robbins
	Vice President of Finance and Administration
	(Principal Accounting and Financial Officer)

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Note 12 - Related Party Transactions (Details Textual) - Stellartech Research Corporation [Member] - USD ($)	3 Months Ended		9 Months Ended		120 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Dec. 31, 2018
Stock Issued During Period, Shares, New Issues					375
Related Party Transaction, Amounts of Transaction	$ 720,000	$ 3,015,000	$ 3,853,000	$ 8,613,000
Accounts Payable, Related Parties, Current	$ 456,000		$ 456,000		$ 456,000	$ 960,000

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Note 6 - Note Payable

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Debt Disclosure [Text Block]

   6. Note Payable

On

May 22, 2017,

the Company entered into a Term Loan Agreement (the

“2017

Loan Agreement”) with affiliates of CRG LP (“CRG”). The credit facility consists of

$20,000,000

drawn at closing and access to additional funding of up to an aggregate of

$10,000,000

for a total of

$30,000,000

available under the credit facility. On

December 29, 2017,

the Company accessed the remaining

$10,000,000

available under the credit facility.

A portion of the initial loan proceeds were used to repay all of the amounts owed by the Company under its

2016

Loan Agreement with Western Alliance Bank. The remainder of the loan proceeds (after deducting loan origination costs and other fees and expenses incurred in connection with the

2017

Loan Agreement), plus any additional amounts that

may

be borrowed in the future, will be used for general corporate purposes and working capital.

The

2017

Loan Agreement has a

six

-year term with

four

years of interest-only payments after which quarterly principal and interest payments will be due through the maturity date. Amounts borrowed under the

2017

Loan Agreement accrue interest at an annual fixed rate of

12.5%,

4.0%

of which

may,

at the election of the Company, be paid in-kind during the interest-only period by adding such accrued amount to the principal loan amount each quarter. During the

three

and

nine

months ended

September 30, 2019,

the Company paid interest in-kind of

$331,000

and

$973,000,

respectively, which was added to the total outstanding principal loan amount. During the

three

and

nine

months ended

September 30, 2018,

the Company paid interest in-kind of

$318,000

and

$934,000,

respectively, which was added to the total outstanding principal loan amount. The Company is also required to pay CRG a final payment fee upon repayment of the loans in full equal to

5.0%

of the sum of the aggregate principal amount plus the deferred interest added to the principal loan amount during the interest-only period. The Company accounts for the final payment fee by accruing the fee over the term of the loan using the effective interest rate method. As of

September 30, 2019,

interest accrued related to the final payment fee in the amount of

$756,000

was included in other noncurrent liabilities in the condensed consolidated balance sheets.

The Company

may

prepay all or a portion of the outstanding principal and accrued unpaid interest under the

2017

Loan Agreement at any time upon prior notice to CRG, subject to a prepayment fee during the

first

five

years of the term (which reduces each year) and

no

prepayment fee thereafter.

As security for its obligations under the

2017

Loan Agreement, the Company entered into security agreements with CRG whereby the Company granted CRG a lien on substantially all of the Company’s assets, including intellectual property.

The terms of the

2017

Loan Agreement also require the Company to meet certain financial and other covenants. These covenants require the Company to maintain cash and cash equivalents of

$2.0

million and, each year through the end of

2022,

to meet a minimum total annual revenue threshold. In the event that the Company does

not

meet the minimum total annual revenue threshold for a particular year, then the Company can retroactively cure the shortfall by either issuing additional equity in exchange for cash or incurring certain additional permitted indebtedness, in each case, in an amount equal to

2.0

times the shortfall. Any such amounts shall be applied to prepay the loans. The

2017

Loan Agreement also contains customary affirmative and negative covenants for a credit facility of this size and type, including covenants that limit or restrict the Company’s ability to, among other things, incur indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make acquisitions, enter into transactions with affiliates, pay dividends or make distributions, license intellectual property rights on an exclusive basis or repurchase stock, in each case subject to customary exceptions. As of

September 30, 2019,

the Company was in compliance with all covenants.

As of

September 30, 2019

and

December 31, 2018,

$31,694,000

and

$30,528,000,

respectively, was recorded on the balance sheets under the

2017

Loan Agreement, respectively, which is net of the remaining unamortized debt discount.

In connection with the

2017

Loan Agreement, the Company issued

two

10

-year warrants to CRG to purchase a total of

2,220

shares of the Company’s common stock at an exercise price of

$950.00

per share (See Note

9

). 

As of

September 30, 2019,

future minimum payments under the note payable are as follows (in thousands): 

Year Ending December 31,
2019 (remaining three months)	$	710
2020		2,901
2021		16,673
2022		19,306
2023		6,220
Total payments		45,810
Less: Amount representing interest		(13,087	)
Present value of obligations		32,723
Less: Unamortized debt discount		(1,029	)
Note payable, noncurrent portion	$	31,694

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Note 10 - Summary of Stock Options

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

10. 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, 2019,

there are outstanding stock option awards issued from the

2006

Plan covering a total of

104

shares of the Company’s common stock and

no

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

$992.00

per share and the weighted average remaining contractual term is

3.3

years.

As of

September 30, 2019,

there are outstanding stock option awards issued from the

2013

Plan covering a total of

50,367

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

11,770

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

$297.56

per share, and the remaining contractual term is

8.3

years.

In

January 2019,

the board of directors approved the

2019

evergreen provision increasing the total stock reserved for issuance under the

2013

Plan by

20,431

shares from 

49,140

shares to a total of

69,571

shares, which was effective

January 1, 2019.

In

September 2019,

the Company’s stockholders approved an amendment to the

2013

Plan to increase the number of shares of common stock reserved for issuance thereunder to equal

18%

of the issued and outstanding shares of common stock of the Company on a fully diluted basis calculated as of the earlier of: (

1

) the day immediately after the consummation of the Company’s next underwritten public equity offering with gross proceeds of

$5.0

million or more; or (

2

)

December 31, 2019.

Activity under the

2006

Plan and the

2013

Plan is as follows:

	Nine Months Ended September 30, 2019
						Weighted
				Weighted		Average
	Number			Average		Remaining		Aggregate
	of			Exercise		Contractual		Intrinsic
	Shares			Price		Term (years)		Value
Options outstanding, beginning of period		40,144		$	456.00		7.4	$	-
Options granted		23,344		$	117.91
Options exercised		-
Options canceled		(13,017	)	$	457.34
Options outstanding, end of period		50,471		$	298.99		8.3	$	-
Vested and exercisable and expected to vest, end of period		48,506		$	302.18		8.3	$	-
Vested and exercisable, end of period		21,169		$	397.45		7.4	$	-

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, 2019.

The options outstanding and exercisable as of

September 30, 2019

are as follows: 

			Number		Weighted		Average		Number		Weighted
			Outstanding		Average		Remaining		Exercisable		Average
Range of			as of		Exercise		Contractual		as of		Exercise
Exercise Prices			September 30, 2019		Price		Term (Years)		September 30, 2019		Price
$38.00	-	$58.00		1,650	$	55.42		9.7		-	$	-
$100.00	-	$197.00		25,496	$	138.25		9.1		6,839	$	148.08
$202.00	-	$283.00		775	$	252.06		8.3		305	$	258.36
$311.00	-	$382.00		4,377	$	357.96		8.1		2,318	$	360.44
$430.00	-	$497.00		8,908	$	452.58		7.7		4,576	$	454.70
$501.00	-	$567.00		4,594	$	536.63		6.9		3,126	$	536.17
$600.00	-	$661.00		2,397	$	601.91		5.9		2,236	$	601.42
$700.00	-	$792.00		2,170	$	769.23		6.3		1,665	$	769.86
$992.00	-	$992.00		104	$	992.00		3.3		104	$	992.00
Total:				50,471	$	298.99		8.3		21,169	$	397.45

Restricted Stock Awards (‘RSA”)

In

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.

In

June 2019,

the Company issued

250

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

June 2018.

In

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.

In

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

three

and

nine

months ended

September 30, 2019,

a total of

421

and

443

shares, respectively, pursuant to these RSAs were cancelled. As of

September 30, 2019,

zero

shares were vested and issued.

As of

September 30, 2019,

there are

3,432

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

2017

Employee Stock Purchase Plan

The

eighth

offering period under the Company’s

2017

Employee Stock Purchase Plan (the

“2017

ESPP”) began on

July 1, 2019

and ended on

September 30, 2019,

and

200

shares were issued on

September 30, 2019

at a purchase price of

$3.75.

The

seventh

offering period under the Company’s

2017

ESPP began on

April 1, 2019

and ended on

June 30, 2019,

and

602

shares were issued on

June 28, 2019

at a purchase price of

$32.30.

The

sixth

offering period under the Company’s

2017

ESPP began on

January 1, 2019

and ended on

March 31, 2019,

and

429

shares were issued on

March 29, 2019

at a purchase price of

$79.88.

As of

September 30, 2019,

the remaining shares available for issuance under the

2017

ESPP were

1,392

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,
	2019			2018			2019			2018
Expected term (in years)		0.25			0.25			0.25			0.25
Average volatility		98	%		67	%		84	%		67	%
Risk-free interest rate		2.21	%		1.93	%		2.40	%		1.71	%
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, 2019

was

$13.16

and

$2.12,

respectively and during the

three

and

nine

months ended

September 30, 2018

was

$75.00

and

$100.00,

respectively.

Stock-Based Compensation

During the

three

months ended

September 30, 2019,

the Company did

not

grant any stock options to employees. During the

three

months ended

September 30, 2018,

the Company granted stock options to employees to purchase

2,375

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

$301.17

per share, respectively. During the

nine

months ended

September 30, 2019

and

2018,

the Company granted stock options to employees to purchase

23,069

and

20,544

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

$117.86

and

$364.98

per share, respectively. There were

no

stock options exercised during the

three

and

nine

months ended

September 30, 2019

and

2018.

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 weighted average assumptions:   

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2019		2018			2019			2018
Expected term (in years)		N/A		5			5			5
Average volatility		N/A		70	%		73	%		73	%
Risk-free interest rate		N/A		2.86	%		2.49	%		2.67	%
Dividend yield		N/A		0	%		0	%		0	%

During the

three

months ended

September 30, 2019,

the Company did

not

grant any stock options to nonemployees. During the

nine

months ended

September 30, 2019,

the Company granted stock options to nonemployees to purchase

275

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

$121.82.

During the

three

and

nine

months ended

September 30, 2018,

the Company granted stock options to nonemployees to purchase

100

and

2,123

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

$283.00

and

$241.69

respectively. There were

no

stock options exercised by nonemployees during the

three

and

nine

months ended

September 30, 2019

and

2018.

The fair value of nonemployee stock options granted was estimated using the following weighted average assumptions: 

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2019		2018			2019			2018
Expected term (in years)		N/A		10			5			10
Average volatility		N/A		66	%		73	%		66	%
Risk-free interest rate		N/A		3.04	%		2.49	%		3.04	%
Dividend yield		N/A		0	%		0	%		0	%

Option-pricing models require the input of various subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The expected stock price volatility is based on analysis of the Company’s stock price history over a period commensurate with the expected term of the options, trading volume of comparable companies’ stock, look-back volatilities and the Company specific events that affected volatility in a prior period. The expected term of 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, 2019

and

2018

(in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Cost of revenue	$	25	$	19	$	91	$	47
Research and development		41		79		134		266
Selling, general and administrative		451		667		1,409		1,981
Total	$	517	$	765	$	1,634	$	2,294

As of

September 30, 2019,

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

$3,371,000.

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

2.2

years.

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Note 6 - Note Payable (Details Textual) - USD ($)			3 Months Ended		9 Months Ended
	Dec. 29, 2017	May 22, 2017	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Interest Payable			$ 13,087,000		$ 13,087,000
Notes Payable, Noncurrent, Total			$ 31,694,000		$ 31,694,000		$ 30,528,000	[1]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			5,549		5,549
May 2017 Issuance Related to 2017 Loan Agreement [Member]
Warrants and Rights Outstanding, Term		10 years
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		2,220	2,220		2,220
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 950	$ 950		$ 950
The 2017 Loan Agreement [Member] | CRG LP [Member]
Debt Instrument, Face Amount		$ 20,000,000
Debt Agreement, Covenant, Additional Funding		10,000,000
Debt Agreement, Maximum Borrowing Capacity		$ 30,000,000
Proceeds from Lines of Credit, Total	$ 10,000,000
Debt Instrument, Term		6 years
Debt instrument, Interest Only Payment, Period		4 years
Debt Instrument, Interest Rate, Stated Percentage		12.50%
Debt Instrument, Interest Rate, Stated Percentage Deferred During Interest-only Period		4.00%
Paid-in-Kind Interest			$ 331,000	$ 318,000	$ 973,000	$ 934,000
Debt Instrument, Prepayment Fee, Percentage		5.00%
Debt Instrument, Prepayment Fee, Period of Term		5 years
Debt Instrument, Covenant, Cash and Cash Equivalents		$ 2,000,000
Notes Payable, Noncurrent, Total			31,694,000		31,694,000		$ 30,528,000
The 2017 Loan Agreement [Member] | CRG LP [Member] | Other Noncurrent Liabilities [Member]
Interest Payable			$ 756,000		$ 756,000

[1] The condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited consolidated financial statements as of that date.

XML

Note 2 - Summary of Significant Accounting Policies - Revenue From Unaffiliated Customers by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenue	$ 1,052	$ 4,821	$ 5,116	$ 14,045
North America [Member]
Revenue	652	3,455	3,106	10,613
Asia Pacific [Member]
Revenue	373	717	1,684	2,238
Europe And Middle East [Member]
Revenue	27	612	316	1,143
Latin America [Member]
Revenue		$ 37	$ 10	$ 51

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Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Sep. 30, 2019	Dec. 31, 2018	[1]
Current assets:
Cash and cash equivalents	$ 9,086,000	$ 29,523,000
Accounts receivable, net of allowance for doubtful accounts of $543 and $284 as of September 30, 2019 and December 31, 2018, respectively	2,806,000	5,704,000
Inventory	4,141,000	4,119,000
Prepaid expenses and other current assets	3,051,000	2,558,000
Total current assets	19,084,000	41,904,000
Property and equipment, net	3,066,000	2,916,000
Investment in limited liability company	1,412,000	1,843,000
Other assets	587,000	171,000
Total assets	24,149,000	46,834,000
Current liabilities:
Accounts payable	1,791,000	3,994,000
Total accrued liabilities	4,457,000	6,766,000
Total current liabilities	6,248,000	10,760,000
Note payable, noncurrent portion	31,694,000	30,528,000
Other noncurrent liabilities	997,000	634,000
Total liabilities	38,939,000	41,922,000
Commitments and contingences (Note 8)
Stockholders’ equity (deficit):
Common stock, $0.0001 par value; 75,000,000 shares authorized as of September 30, 2019 and December 31, 2018; 1,469,789 and 463,630 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively
Additional paid-in capital	168,304,000	160,297,000
Accumulated deficit	(183,094,000)	(155,385,000)
Total stockholders’ equity (deficit)	(14,790,000)	4,912,000
Total liabilities and stockholders’ equity (deficit)	$ 24,149,000	$ 46,834,000

[1] The condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited consolidated financial statements as of that date.

XML

Note 7 - Leases - Maturity of Operating Lease Liabilities (Details) - USD ($)	Sep. 30, 2019	Jan. 01, 2019
2019 (remaining three months)	$ 75,000
2020	303,000
2021	136,000
Total lease payments	514,000
Less: Amount representing interest	(54,000)
Present value of lease liabilities	$ 460,000	$ 629,000

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2019		Sep. 30, 2018
Cash flows from operating activities:
Net loss	$ (27,709,000)		$ (36,489,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for doubtful accounts	260,000		103,000
Depreciation and amortization	819,000		545,000
Stock-based compensation	1,634,000		2,294,000
Fair value of common shares issued			256,000
Non-cash interest expense	1,266,000		1,176,000
Amortization of operating lease right-of-use assets and accretion of operating lease liabilities	4,000
Loss from minority interest in limited liability company	431,000		539,000
Loss on disposal of property and equipment	93,000
Changes in assets and liabilities:
Accounts receivable	2,638,000		1,119,000
Inventory	(236,000)		(2,317,000)
Prepaid expenses and other current assets	(493,000)		61,000
Other noncurrent assets	40,000		1,000
Accounts payable	(2,203,000)		(1,297,000)
Accrued and other liabilities	(2,566,000)		502,000
Other noncurrent liabilities	160,000		262,000
Net cash used in operating activities	(25,862,000)		(33,245,000)
Cash flows from investing activities:
Purchase of property and equipment	(848,000)		(983,000)
Net cash used in investing activities	(848,000)		(983,000)
Cash flows from financing activities:
Proceeds from sale of common stock, net of issuance costs	6,322,000		33,407,000
Proceeds from issuance of common shares from employee stock purchase plan	56,000		188,000
Transaction costs in connection with note payable	(100,000)
Reverse stock split - cancellation and payout of fractional shares	(5,000)
Net cash provided by financing activities	6,273,000		33,595,000
Net decrease in cash and cash equivalents	(20,437,000)		(633,000)
Cash and cash equivalents - beginning of period	29,523,000	[1]	20,730,000
Cash and cash equivalents - end of period	9,086,000		20,097,000
Supplemental disclosure:
Cash paid for interest	2,067,000		1,991,000
Cash paid for income taxes			2,000
Supplemental disclosure of cash flow information as of end of period:
Issuance of note payable in settlement of accrued interest	973,000		934,000
Net transfer of equipment between inventory and property and equipment	214,000		210,000
Operating cash outflows from operating leases	220,000
Right-of-use assets obtained in exchange for operating lease liabilities (upon adoption of ASC 842)	$ 629,000

[1] The condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited consolidated financial statements as of that date.

XML

Note 2 - Summary of Significant Accounting Policies (Details Textual)		3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended
	Sep. 18, 2019	Sep. 30, 2019 USD ($) $ / shares shares	Sep. 30, 2018 USD ($)	Jun. 30, 2019	Sep. 30, 2019 USD ($) $ / shares shares	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($) $ / shares shares		Jan. 01, 2019 USD ($)
Common Stock, Par or Stated Value Per Share | $ / shares		$ 0.0001			$ 0.0001		$ 0.0001	[1]
Common Stock, Shares Authorized | shares		75,000,000			75,000,000		75,000,000	[1]
Operating Lease, Right-of-Use Asset		$ 456,000			$ 456,000				$ 629,000
Operating Lease, Liability, Total		$ 460,000			$ 460,000				$ 629,000
Number of Financial Institutions		1			1
Accounts Receivable, Allowance for Credit Loss, Ending Balance		$ 543,000			$ 543,000		$ 284,000
Deferred Income		579,000			579,000
Contract with Customer, Asset, after Allowance for Credit Loss, Total		0			0		0
Contract with Customer, Liability, Total		470,000			470,000		$ 686,000
Capitalized Contract Cost, Net, Total		198,000	$ 0		198,000	$ 0
Capitalized Contract Cost, Amortization		30,000	0		30,000	0
Equity Method Investment, Other than Temporary Impairment		$ 0	$ 0		$ 0	$ 0
Minimum [Member]
Warranty Period				1 year
Maximum [Member]
Warranty Period				3 years
Customer Concentration Risk [Member] | Revenue Benchmark [Member]
Concentration Risk, Number of Customers		2	3		1	1
Concentration Risk, Percentage			42.00%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | One Customer [Member]
Concentration Risk, Percentage					17.00%	21.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member]
Concentration Risk, Number of Customers					4		3
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Four Customers [Member]
Concentration Risk, Percentage					67.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Three Customers [Member]
Concentration Risk, Percentage							54.00%
Reverse Stock Split [Member]
Stockholders' Equity Note, Stock Split, Conversion Ratio	100

[1] The condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited consolidated financial statements as of that date.

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Financial Statement Presentation

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

Reserve Stock Split, Policy [Policy Text Block]

Reverse Stock Split

On

September 18, 2019,

the Company effected a

1

-for-

100

reverse stock split of its common stock that became effective after market close on

September 18, 2019.

The reverse stock split uniformly affected all issued and outstanding shares of the Company’s common stock. The reverse stock split did

not

alter any stockholder's percentage ownership interest in the Company, except to the extent that the reverse stock split resulted in fractional shares.

No

fractional shares were issued in connection with the reverse stock split. Any fractional shares that resulted from the reverse stock split were rounded down, and stockholders were issued cash in lieu of such fractional share interest.

The par value of the Company’s common stock remained unchanged at

$0.0001

per share after the reverse stock split.

The number of authorized shares of common stock remained at

75

million.

The reverse stock split proportionately affected the number of shares of common stock available for issuance under the Company’s equity incentive plans. All stock options, warrants and restricted stock awards of the Company outstanding shares immediately prior to the reverse stock split were adjusted in accordance with their terms.

On the effective date of the reverse stock split, (i) each

100

shares of outstanding common stock were reduced to

one

share of common stock; (ii) the number of shares of common stock into which each outstanding stock option or warrant to purchase common stock is exercisable were proportionately reduced on an

100

-to-

1

basis; (iii) the exercise price of each outstanding stock option or warrant to purchase common stock were proportionately increased on a

1

-to-

100

basis; and (iv) the number of shares of common stock each outstanding restricted stock award will be issued upon vesting were proportionally reduced on a

100

-to-

1

basis.

All of the share numbers, share prices, and exercise prices have been adjusted, on a retroactive basis, to reflect this

1

-for-

100

reverse stock split.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. 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. 

Changes in Accounting Policies, Policy [Policy Text Block]

Changes in Accounting Policies

Except for the changes for the adoption of the new accounting standard for leases, the Company has consistently applied the accounting policies to all periods presented in these condensed consolidated financial statements.

Adoption of New Accounting Standard - Leases

The Company adopted FASB’s Accounting Standards Update (“ASU”)

No.

2016

-

02,

Leases (Topic

842

), as of

January 1, 2019,

using the modified retrospective approach. The modified retrospective approach provides a method for recording existing leases at the beginning of the period of adoption. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification and we elected the hindsight practical expedient to determine the lease term for existing leases. We determined that the renewal options for the facilities lease would be reasonably certain to be renewed and as such, included that renewal period in determining the expected lease term of that lease. Adoption of the new standard resulted in the recording of operating lease right-of-use assets of

$629,000

and operating lease liabilities of

$629,000,

as of

January 1, 2019.

The standard did

not

have an impact on our consolidated results of operations, cash flows or stockholders’ equity previously reported. The comparative information has

not

been restated and continues to be reported under the accounting standards in effect for those periods.

The effect of the changes made to our consolidated

January 1, 2019

balance sheet for the adoption of the new lease standard was as follows (in thousands): 

			Adjustments
			Due to
	December 31,		Adoption of			January 1,
	2018		ASC 842			2019
Other assets	$	171	$	629	(1)	$	800
Total assets	$	46,834	$	629	(1)	$	47,463
Accrued liabilities	$	6,766	$	230	(2)	$	6,996
Total current liabilities	$	10,760	$	230	(2)	$	10,990
Other noncurrent liabilities	$	634	$	399	(2)	$	1,033
Total liabilities	$	41,922	$	629	(2)	$	42,551
Total liabilities and stockholders' equity	$	46,834	$	629	(2)	$	47,463

( 1 )	Represents capitalization of operating lease right-of-use assets and reclassification of deferred rent.
( 2 )	Represents recognition of operating lease liabilities.

Cash and Cash Equivalents, Policy [Policy Text Block]

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 accounts primarily at

one

financial institution. Deposits in this institution

may,

from time to time, exceed the federally insured amounts.

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.

Most of the Company’s products to date require clearance or approvals from the U.S. Food and Drug Administration (“FDA”) or other international regulatory agencies prior to commencing commercial sales. There can be

no

assurance that the Company’s products will receive any of these required clearances or approvals or for the indications requested. If the Company was denied such clearances or approvals or if such clearances or approvals were delayed, it would have a material adverse effect 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. 

The Company designs, develops, manufactures and markets a medical device that it refers to as the Viveve System, which is intended for the non-invasive treatment of vaginal introital laxity, for improved sexual function, for vaginal rejuvenation, for use in general surgical procedures for electrocoagulation and hemostasis, and stress urinary incontinence, depending on the relevant country-specific clearance or approval. The Viveve System consists of

three

main components: a RF, or radio frequency, generator housed in a table-top console, a reusable handpiece and a single-use treatment tip. Included with the system are single-use accessories (e.g. RF return pad, coupling fluid), as well as a cryogen canister that can be used for approximately

four

to

five

procedures, and a foot pedal. The Company outsources the manufacture and repair of the Viveve System to a single contract manufacturer. Also, certain other components and materials that comprise the device are currently manufactured by a single supplier or a limited number of suppliers. A significant supply interruption or disruption in the operations of the contract manufacturer or these

third

-party suppliers would adversely impact the production of our products for a substantial period of time, which could have a material adverse effect on our business, financial condition, operating results and cash flows.

In North America, the Company sells its products primarily through a direct sales force to health care practitioners. Outside North America, the Company sells through an extensive network of distribution partners. During the

three

months ended

September 30, 2019,

two

distributors, collectively, accounted for

31

% of the Company’s revenue. During the

three

months ended

September 30, 2018,

three

distributors accounted for

42%

of the Company’s revenue. During the 

nine

 months ended

September 30, 2019,

one

distributor accounted for

17

% of the Company’s revenue. During the

nine

months ended

September 30, 2018,

one

distributor accounted for

21%

of the Company’s revenue.

There were

no

direct sales customers that accounted for more than

10%

of the Company’s revenue during the

three

and

nine

months ended

September 30, 2019

and

2018.

As of

September 30, 2019,

four

distributors, collectively, accounted for

67%

of total accounts receivable, net. As of

December 31, 2018,

three

distributors, collectively, accounted for

54%

of total accounts receivable, net.

Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block]

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at the invoiced amount and are

not

interest bearing. Our typical payment terms vary by region and type of customer (distributor or physician). Occasionally, payment terms of up to

six

months

may

be granted to customers with an established history of collections without concessions. Should we grant payment terms greater than

six

months or terms that are

not

in accordance with established history for similar arrangements, revenue would be recognized as payments become due and payable assuming all other criteria for revenue recognition have been met. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company makes ongoing assumptions relating to the collectability of its accounts receivable in its calculation of the allowance for doubtful accounts. In determining the amount of the allowance, the Company makes judgments about the creditworthiness of customers based on ongoing credit evaluations and assesses current economic trends affecting its customers that might impact the level of credit losses in the future and result in different rates of bad debts than previously seen. The Company also considers its historical level of credit losses. The allowance for doubtful accounts was

$543,000

as of

September 30, 2019

and

$284,000

as of

December 31, 2018.

Revenue from Contract with Customer [Policy Text Block]

Revenue Recognition

Revenue consists primarily of the sale of the Viveve System, single-use treatment tips and ancillary consumables. The Company applies the following

five

steps: (

1

) identify the contract with a customer, (

2

) identify the performance obligations in the contract, (

3

) determine the transaction price, (

4

) allocate the transaction price to the performance obligations in the contract, and (

5

) recognize revenue when a performance obligation is satisfied. The Company considers customer purchase orders to be the contracts with a customer. Revenues, net of expected discounts, are recognized when the performance obligations of the contract with the customer are satisfied and when control of the promised goods are transferred to the customer, typically when products, which have been determined to be the only distinct performance obligations, are shipped to the customer. Expected costs of assurance warranties and claims are recognized as expense. Revenue is recognized net of any sales taxes from the sale of the products.

Rental revenue is generated through the lease of the Viveve System. The Company’s operating leases for the Viveve System have a rental period of

six

months and can be extended or terminated by the customer after that time or the Viveve System can be purchased by the customer. Rental revenue on those operating leases is recognized on a straight-line basis over the terms of the underlying leases. The Company began this rental program in the quarter ended

June 30, 2019

and the revenue associated with it has

not

been material to the periods presented.

In connection with the lease of the Viveve System, the Company offers single-use treatment tips and ancillary consumables that are considered nonlease components. In the contracts with lease and nonlease components, the Company follows the relevant guidance in ASC

606,

Revenue from Contracts with Customers, to determine how to allocate contractual consideration between the lease and nonlease components.

Sales of our products are subject to regulatory requirements that vary from country to country. The Company has regulatory clearance for differing indications, or can sell its products without a clearance, in many countries throughout the world, including countries within the following regions: North America, Latin America, Europe, the Middle East and Asia Pacific. In North America, we market and sell primarily through a direct sales force. Outside of North America, we market and sell primarily through distribution partners.

The Company does 

not

 provide its customers with a right of return.

Customer Advance Payments

From time to time, customers will pay for a portion of the products ordered in advance.  Upon receipt of such payments, the Company records the customer advance payment as a component of accrued liabilities.  The Company will remove the customer advance payment from accrued liabilities when revenue is recognized upon shipment of the products. 

Contract Assets and Liabilities

The Company continually evaluates whether the revenue generating activities and advanced payment arrangements with customers result in the recognition of contract assets or liabilities.

No

such assets existed as of 

September 30, 2019

or 

December 

31,

2018.

The Company had customer contracts liabilities in the amount of

$470,000,

primarily related to marketing programs that performance had

not

yet been delivered to its customers as of

September 30, 2019

and

$686,000

as of

December 31, 2018.

The following table reflects the changes in our customer contract liabilities for the

nine

months ended

September 30, 2019:

	September 30,		December 31,		Nine Months
	2019		2018		Change
Customer contracts liabilities:
Marketing programs	$	470	$	639	$	(169	)
Other		-		47		(47	)
Total	$	470	$	686	$	(216	)

Separately, accounts receivable, net represents receivables from contracts with customers.

Significant Financing Component

The Company applies the practical expedient to

not

make any adjustment for a significant financing component if, at contract inception, the Company does

not

expect the period between customer payment and transfer of control of the promised goods or services to the customer to exceed

one

year. During the 

three

and

nine

months ended

September 30, 2019

and

2018,

the Company did

not

have any contracts for the sale of its products with its customers with a significant financing component.

Contract Costs

 

The Company expects that commissions paid to obtain subscriptions are recoverable and has therefore capitalized them as a contract costs in the amount of

$198,000

and

$0

at

September 30, 2019

and

2018,

respectively. Capitalized commissions are amortized based on the subscription periods to which the assets relate and are included in selling, general and administrative expenses. For the

three

and

nine

months ended

September 30, 2019,

the amount of amortization was

$30,000

(

$0

in

2018

). There was

no

impairment loss in relation to the costs capitalized. The Company has elected the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is less than

six

months.

Shipping and Handling

Shipping costs billed to customers are recorded as revenue. Shipping and handling expense related to costs incurred to deliver product are recognized within cost of goods sold. The Company accounts for shipping and handling activities that occur after control has transferred as a fulfillment cost as opposed to a separate performance obligation, and the costs of shipping and handling are recognized concurrently with the related revenue.

Revenue by Geographic Area

Management has determined that the sales by geography is a key indicator for understanding the Company’s financials because of the different sales and business models that are required in the various regions of the world (including regulatory, selling channels, pricing, customers and marketing efforts). The following table presents the revenue from unaffiliated customers disaggregated by geographic area for the

three

and

nine

months ended

September 30, 2019

and

2018

(in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
North America	$	652	$	3,455	$	3,106	$	10,613
Asia Pacific		373		717		1,684		2,238
Europe and Middle East		27		612		316		1,143
Latin America		-		37		10		51
Total	$	1,052	$	4,821	$	5,116	$	14,045

The Company determines geographic location of its revenue based upon the destination of the shipments of its products.

Equity Method Investments [Policy Text Block]

Investments in Unconsolidated Affiliates

The Company uses the equity method to account for its investments in entities that it does

not

control but have the ability to exercise significant influence over the investee. Equity method investments are recorded at original cost and adjusted periodically to recognize (

1

) the proportionate share of the investees’ net income or losses after the date of investment, (

2

) additional contributions made and dividends or distributions received, and (

3

) impairment losses resulting from adjustments to net realizable value. The Company eliminates all intercompany transactions in accounting for equity method investments. The Company records the proportionate share of the investees’ net income or losses in equity in earnings of unconsolidated affiliates on the condensed consolidated statements of operations. The Company utilizes a

three

-month lag in reporting equity income from its investments, adjusted for known amounts and events, when the investee’s financial information is

not

available timely or when the investee’s reporting period differs from our reporting period.

The Company assesses the potential impairment of the equity method investments when indicators such as a history of operating losses, a negative earnings and cash flow outlook, and the financial condition and prospects for the investee’s business segment might indicate a loss in value. The carrying value of the investments is reviewed annually for changes in circumstances or the occurrence of events that suggest the investment

may

not

be recoverable.

No

impairment charges have been recorded in the condensed consolidated statements of operations during the

three

and

nine

months ended

September 30, 2019

and

2018.

Standard Product Warranty, Policy [Policy Text Block]

Product Warranty

The Company’s products are generally subject to warranties between

one

and

three

years, which provides for the repair, rework or replacement of products (at the Company’s option) that fail to perform within stated specifications. The Company has assessed the historical claims and, to date, product warranty claims have

not

been significant.

Share-based Payment Arrangement [Policy Text Block]

Accounting for Stock-Based Compensation

Share-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized as expense over the employee’s service period. The Company recognizes compensation expense on a straight-line basis over the requisite service period of the award.

The Company determined that the Black-Scholes option pricing model is the most appropriate method for determining the estimated fair value for stock options and purchase rights under the employee stock purchase plan. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions which determine the fair value of share-based awards, including the option’s expected term and the price volatility of the underlying stock.

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 Income, Policy [Policy Text Block]

Comprehensive Loss

Comprehensive loss represents the changes in equity of an enterprise, other than those resulting from stockholder transactions. Accordingly, comprehensive loss

may

include certain changes in equity that are excluded from net loss. For the

three

months and

nine

months ended

September 30, 2019

and

2018,

the Company’s comprehensive loss is the same as its net loss. 

Earnings Per Share, Policy [Policy Text Block]

Net Loss per Share

The Company’s basic net loss per share 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 is computed by giving effect to all potentially dilutive common stock equivalents outstanding during the period. For purposes of this calculation, stock options and warrants to purchase common stock and restricted common stock awards are considered common stock equivalents. For periods in which the Company has reported net losses, diluted net loss per share is the same as basic net loss per share, since dilutive common shares are

not

assumed to have been issued if their effect is anti-dilutive.

The following securities were excluded from the calculation of net loss per share because the inclusion would be anti-dilutive. 

	Nine Months Ended
	September 30,
	2019		2018
Stock options to purchase common stock		50,471		42,917
Warrants to purchase common stock		5,549		6,408
Restricted common stock awards		3,432		600

New Accounting Pronouncements, Policy [Policy Text Block]

Other Recently Issued and Adopted Accounting Standards

In

June 2018,

the FASB issued ASU

2018

-

07,

“Stock Compensation (Topic

718

) – Improvements to Nonemployee Share- Based Payment Accounting”. The intent of this guidance is to simplify the accounting for nonemployee share-based payment accounting. The amendments in this guidance expand the scope of Topic

718

to include share-based payment transactions for acquiring goods and services from nonemployees. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic

718

are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. Equity- classified nonemployee share-based payment awards are measured at the grant date. Consistent with the accounting for employee share-based payment awards, an entity considers the probability of satisfying performance conditions when nonemployee share-based payment awards contain such conditions. This guidance is effective for annual reporting periods beginning after

December 15, 2018,

including interim periods within the reporting period. We adopted this guidance as of

January 1, 2019

and the adoption of the guidance did

not

have a significant impact on the condensed consolidated financial statements.

We have reviewed other recent accounting pronouncements and concluded they are either

not

applicable to the business, or

no

material effect is expected on the consolidated financial statements as a result of future adoption.

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Note 7 - Leases (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Lessee, Lease Assets and Liabilities [Table Text Block]

	September 30,		January 1,
	2019		2019
Assets:
Operating lease right-of-use assets	$	456	$	629
Liabilities:
Current operating lease liabilities	$	257	$	230
Noncurrent operating lease liabilities		203		399
	$	460	$	629

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Year Ending December 31,
2019 (remaining three months)	$	75
2020		303
2021		136
Total lease payments		514
Less: Amount representing interest		(54	)
Present value of lease liabilities	$	460

Lessor, Operating Lease, Payments to be Received, Maturity [Table Text Block]

Year Ending December 31,
2019 (remaining three months)	$	255
2020		324
Thereafter		-
Total	$	579

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Note 10 - Summary of Stock Options - Summary of Options Outstanding and Exercisable (Details)	9 Months Ended
	Sep. 30, 2019 $ / shares shares
Options outstanding, number (in shares) | shares	50,471
Options outstanding, weighted average exercise price (in dollars per share)	$ 298.99
Options outstanding, weighted average remaining contractual term (Year)	8 years 109 days
Options exercisable, number exercisable (in shares) | shares	21,169
Options exercisable, weighted average exercise price (in dollars per share)	$ 397.45
Range One [Member]
Exercise price range, lower limit (in dollars per share)	38
Exercise price range, upper limit (in dollars per share)	$ 58
Options outstanding, number (in shares) | shares	1,650
Options outstanding, weighted average exercise price (in dollars per share)	$ 55.42
Options outstanding, weighted average remaining contractual term (Year)	9 years 255 days
Options exercisable, number exercisable (in shares) | shares
Range Two [Member]
Exercise price range, lower limit (in dollars per share)	$ 100
Exercise price range, upper limit (in dollars per share)	$ 197
Options outstanding, number (in shares) | shares	25,496
Options outstanding, weighted average exercise price (in dollars per share)	$ 138.25
Options outstanding, weighted average remaining contractual term (Year)	9 years 36 days
Options exercisable, number exercisable (in shares) | shares	6,839
Options exercisable, weighted average exercise price (in dollars per share)	$ 148.08
Range Three [Member]
Exercise price range, lower limit (in dollars per share)	202
Exercise price range, upper limit (in dollars per share)	$ 283
Options outstanding, number (in shares) | shares	775
Options outstanding, weighted average exercise price (in dollars per share)	$ 252.06
Options outstanding, weighted average remaining contractual term (Year)	8 years 109 days
Options exercisable, number exercisable (in shares) | shares	305
Options exercisable, weighted average exercise price (in dollars per share)	$ 258.36
Range Four [Member]
Exercise price range, lower limit (in dollars per share)	311
Exercise price range, upper limit (in dollars per share)	$ 382
Options outstanding, number (in shares) | shares	4,377
Options outstanding, weighted average exercise price (in dollars per share)	$ 357.96
Options outstanding, weighted average remaining contractual term (Year)	8 years 36 days
Options exercisable, number exercisable (in shares) | shares	2,318
Options exercisable, weighted average exercise price (in dollars per share)	$ 360.44
Range Five [Member]
Exercise price range, lower limit (in dollars per share)	430
Exercise price range, upper limit (in dollars per share)	$ 497
Options outstanding, number (in shares) | shares	8,908
Options outstanding, weighted average exercise price (in dollars per share)	$ 452.58
Options outstanding, weighted average remaining contractual term (Year)	7 years 255 days
Options exercisable, number exercisable (in shares) | shares	4,576
Options exercisable, weighted average exercise price (in dollars per share)	$ 454.70
Range Six [Member]
Exercise price range, lower limit (in dollars per share)	501
Exercise price range, upper limit (in dollars per share)	$ 567
Options outstanding, number (in shares) | shares	4,594
Options outstanding, weighted average exercise price (in dollars per share)	$ 536.63
Options outstanding, weighted average remaining contractual term (Year)	6 years 328 days
Options exercisable, number exercisable (in shares) | shares	3,126
Options exercisable, weighted average exercise price (in dollars per share)	$ 536.17
Range Seven [Member]
Exercise price range, lower limit (in dollars per share)	600
Exercise price range, upper limit (in dollars per share)	$ 661
Options outstanding, number (in shares) | shares	2,397
Options outstanding, weighted average exercise price (in dollars per share)	$ 601.91
Options outstanding, weighted average remaining contractual term (Year)	5 years 328 days
Options exercisable, number exercisable (in shares) | shares	2,236
Options exercisable, weighted average exercise price (in dollars per share)	$ 601.42
Range Eight [Member]
Exercise price range, lower limit (in dollars per share)	700
Exercise price range, upper limit (in dollars per share)	$ 792
Options outstanding, number (in shares) | shares	2,170
Options outstanding, weighted average exercise price (in dollars per share)	$ 769.23
Options outstanding, weighted average remaining contractual term (Year)	6 years 109 days
Options exercisable, number exercisable (in shares) | shares	1,665
Options exercisable, weighted average exercise price (in dollars per share)	$ 769.86
Range Nine [Member]
Exercise price range, lower limit (in dollars per share)	992
Exercise price range, upper limit (in dollars per share)	$ 992
Options outstanding, number (in shares) | shares	104
Options outstanding, weighted average exercise price (in dollars per share)	$ 992
Options outstanding, weighted average remaining contractual term (Year)	3 years 109 days
Options exercisable, number exercisable (in shares) | shares	104
Options exercisable, weighted average exercise price (in dollars per share)	$ 992

XML

Note 9 - Common Stock (Details Textual)				1 Months Ended					3 Months Ended				9 Months Ended
	Aug. 16, 2019 USD ($)	Feb. 12, 2018 USD ($)	Nov. 08, 2017 USD ($)	Aug. 31, 2019 USD ($) shares	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($) shares	Jun. 30, 2018 USD ($) shares	Feb. 28, 2018 USD ($) shares	Sep. 30, 2019 USD ($) $ / shares shares	Sep. 30, 2018 USD ($) shares	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Sep. 30, 2019 USD ($) $ / shares shares	Sep. 30, 2018 USD ($) shares	May 22, 2017 USD ($) yr $ / shares shares
Stock Issued During Period, Value, Restricted Stock Award, Gross							$ 256,000		$ 14,000	$ 47,000	$ 67,000	$ 108,000
Proceeds from Issuance of Common Stock													$ 6,322,000	$ 33,407,000
Stock Issued During Period, Shares, Restricted Stock Award, Gross | shares							1,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares									5,549				5,549
Class of Warrants or Rights, Exercises in Period | shares									0	0			0	0
Class of Warrant or Right Number of Securities Called by Warrants or Rights Cancelled In Period | shares										0			0	0
Class Of Warrant Or Right, Number Of Securities Called By Warrants Or Rights Expired In Period | shares									859	0			859	0
The 2017 Loan Agreement [Member]
Debt Issuance Costs, Net, Total									$ 790,000				$ 790,000
Amortization of Debt Discount (Premium)									$ 92,000	$ 82,000			$ 270,000	$ 242,000
May 2017 Issuance Related to 2017 Loan Agreement [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares									2,220				2,220		2,220
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares									$ 950				$ 950		$ 950
Warrants and Rights Outstanding, Term															10 years
Warrants and Rights Outstanding															$ 940,000
May 2017 Issuance Related to 2017 Loan Agreement [Member] | Measurement Input, Expected Dividend Rate [Member]
Warrants and Rights Outstanding, Measurement Input															0
May 2017 Issuance Related to 2017 Loan Agreement [Member] | Measurement Input, Price Volatility [Member]
Warrants and Rights Outstanding, Measurement Input															0.551
May 2017 Issuance Related to 2017 Loan Agreement [Member] | Measurement Input, Risk Free Interest Rate [Member]
Warrants and Rights Outstanding, Measurement Input															0.0225
May 2017 Issuance Related to 2017 Loan Agreement [Member] | Measurement Input, Expected Term [Member]
Warrants and Rights Outstanding, Measurement Input | yr															10
Restricted Stock [Member]
Proceeds From Issuance of Common Stock, Net					$ 274
Stock Issued During Period, Value, Restricted Stock Award, Gross					$ 25,000
August 2019 ATM Facility [Member]
Aggregate Offering Price	$ 6,760,000			$ 6,760,000
Stock Issued During Period, Shares, New Issues | shares									1,004,171
Proceeds From Issuance of Common Stock, Net									$ 6,322,000
November 2017 ATM Facility [Member]
Aggregate Offering Price			$ 25,000,000	$ 25,000,000
Stock Issued During Period, Shares, New Issues | shares				3,364					0	37			0	2,771
Proceeds From Issuance of Common Stock, Net				$ 1,318,000					$ 11,000	$ 11,000			$ 1,194,000	$ 1,194,000
December 2018 Offering [Member]
Stock Issued During Period, Shares, New Issues | shares						147,285
Proceeds From Issuance of Common Stock, Net						$ 20,385,000
Proceeds from Issuance of Common Stock						$ 22,093,000
February 2018 Offering [Member]
Stock Issued During Period, Shares, New Issues | shares								115,000
Proceeds From Issuance of Common Stock, Net		$ 32,214,000						$ 32,214,000
Stock Issued During Period, Value, Restricted Stock Award, Gross		115,000
Proceeds from Issuance of Common Stock		$ 34,500,000						$ 34,500,000

XML

Note 11 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Dec. 31, 2019
Income Tax Expense (Benefit), Total		$ 0
Effective Income Tax Rate Reconciliation, Percent, Total	0.00%	0.00%
Forecast [Member]
Effective Income Tax Rate Reconciliation, Percent, Total			0.00%

XML

Note 2 - Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Cumulative Effect of Adjustments for New Accounting Pronouncements on Balance Sheet [Table Text Block]

			Adjustments
			Due to
	December 31,		Adoption of			January 1,
	2018		ASC 842			2019
Other assets	$	171	$	629	(1)	$	800
Total assets	$	46,834	$	629	(1)	$	47,463
Accrued liabilities	$	6,766	$	230	(2)	$	6,996
Total current liabilities	$	10,760	$	230	(2)	$	10,990
Other noncurrent liabilities	$	634	$	399	(2)	$	1,033
Total liabilities	$	41,922	$	629	(2)	$	42,551
Total liabilities and stockholders' equity	$	46,834	$	629	(2)	$	47,463

Contract with Customer, Asset and Liability [Table Text Block]

	September 30,		December 31,		Nine Months
	2019		2018		Change
Customer contracts liabilities:
Marketing programs	$	470	$	639	$	(169	)
Other		-		47		(47	)
Total	$	470	$	686	$	(216	)

Revenue from External Customers by Geographic Areas [Table Text Block]

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
North America	$	652	$	3,455	$	3,106	$	10,613
Asia Pacific		373		717		1,684		2,238
Europe and Middle East		27		612		316		1,143
Latin America		-		37		10		51
Total	$	1,052	$	4,821	$	5,116	$	14,045

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	Nine Months Ended
	September 30,
	2019		2018
Stock options to purchase common stock		50,471		42,917
Warrants to purchase common stock		5,549		6,408
Restricted common stock awards		3,432		600

XML

Note 9 - Common Stock (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

					Number of
					Shares
					Outstanding
	Exercisable	Expiration	Exercise		Under
Issuance Date	for	Date	Price		Warrants
October 2014	Common Shares	October 13, 2019	$	424.00		288
November 2014	Common Shares	November 12, 2019	$	424.00		125
February 2015	Common Shares	February 17, 2025	$	400.00		754
March 2015	Common Shares	March 26, 2025	$	272.00		14
May 2015	Common Shares	May 12, 2025	$	424.00		362
May 2015	Common Shares	May 17, 2020	$	424.00		215
December 2015	Common Shares	December 16, 2025	$	560.00		267
April 2016	Common Shares	April 1, 2026	$	608.00		250
May 2016	Common Shares	May 11, 2021	$	774.00		50
June 2016	Common Shares	June 20, 2026	$	498.00		1,004
May 2017	Common Shares	May 25, 2027	$	950.00		2,220
						5,549

XML

Note 2 - Summary of Significant Accounting Policies - Cumulative Effect of Adjustments for New Accounting Pronouncements on Consolidated Balance Sheet (Details) - USD ($) $ in Thousands		Sep. 30, 2019	Jan. 01, 2019	Dec. 31, 2018	[1]
Other assets		$ 587	$ 800	$ 171
Total assets		24,149	47,463	46,834
Total accrued liabilities		4,457	6,996	6,766
Total current liabilities		6,248	10,990	10,760
Other noncurrent liabilities		997	1,033	634
Total liabilities		38,939	42,551	41,922
Total liabilities and stockholders' equity		$ 24,149	47,463	$ 46,834
Accounting Standards Update 2016-02 [Member]
Other assets	[2]		629
Total assets	[2]		629
Total accrued liabilities	[3]		230
Total current liabilities	[3]		230
Other noncurrent liabilities	[3]		399
Total liabilities	[3]		629
Total liabilities and stockholders' equity	[3]		$ 629

[1] The condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited consolidated financial statements as of that date.

[2] Represents capitalization of operating lease right-of-use assets and reclassification of deferred rent.

[3] Represents recognition of operating lease liabilities.

XML

Note 10 - Summary of Stock Options - Stock-based Compensation Expense Included in the Statement of Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Stock-based compensation expense	$ 517	$ 765	$ 1,634	$ 2,294
Cost of Sales [Member]
Stock-based compensation expense	25	19	91	47
Research and Development Expense [Member]
Stock-based compensation expense	41	79	134	266
Selling, General and Administrative Expenses [Member]
Stock-based compensation expense	$ 451	$ 667	$ 1,409	$ 1,981

XML

Note 10 - Summary of Stock Options - Summary of Option Activity Under All Plans (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2019 USD ($) $ / shares shares	Dec. 31, 2018 $ / shares shares
Options outstanding (in shares) | shares	40,144
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 456
Options outstanding, weighted average remaining contractual term (Year)	8 years 109 days	7 years 146 days
Options granted (in shares) | shares	23,344
Options granted, weighted average exercise price (in dollars per share) | $ / shares	$ 117.91
Options exercised (in shares) | shares
Options exercised, weighted average exercise price (in dollars per share) | $ / shares
Options canceled (in shares) | shares	(13,017)
Options canceled, weighted average exercise price (in dollars per share) | $ / shares	$ 457.34
Options outstanding (in shares) | shares	50,471	40,144
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares	$ 298.99	$ 456
Options outstanding, aggregate intrinsic value | $
Vested and exercisable and expected to vest, end of period (in shares) | shares	48,506
Vested and exercisable and expected to vest, end of period, weighted average exercise price (in dollars per share) | $ / shares	$ 302.18
Vested and exercisable and expected to vest, end of period, weighted average remaining contractual term (Year)	8 years 109 days
Vested and exercisable and expected to vest, end of period, aggregate intrinsic value | $
Vested and exercisable, end of period (in shares) | shares	21,169
Vested and exercisable, end of period, weighted average exercise price (in dollars per share) | $ / shares	$ 397.45
Vested and exercisable, end of period, weighted average remaining contractual term (Year)	7 years 146 days
Vested and exercisable, end of period, aggregate intrinsic value | $

XML

Note 7 - Leases - Minimum Future Rentals (Details) $ in Thousands	Sep. 30, 2019 USD ($)
2019 (remaining three months)	$ 255
2020	324
Thereafter
Total	$ 579

XML

Note 13 - Restructuring Costs (Details Textual)	1 Months Ended	3 Months Ended		9 Months Ended
	Jan. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
Restructuring and Related Cost, Number of Positions Eliminated	40
Restructuring Charges, Total	$ 742,000			$ 742,000

XML

Note 7 - Leases

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

  7. Leases

Lessee:

The following information pertains to those operating lease agreements where the Company is the lessee.

In

January 2012,

the Company entered into a lease agreement for office and laboratory facilities in Sunnyvale, California. The lease agreement, as amended, commenced in

March 2012

and terminated in

April 2018.

On

February 1, 2017,

the Company entered into a sublease agreement (the “Sublease”) for approximately

12,400

square feet of building space for the relocation of the Company’s corporate headquarters to Englewood, Colorado (the “Sublease Premises”), which was effective as of

January 26, 2017.

The lease term commenced on

June 1, 2017

and will terminate in

May 2020.

The Company relocated its corporate headquarters from Sunnyvale, California to Englewood, Colorado in

June 2017.

The monthly base rent under the Sublease is equal to

$20.50

per rentable square foot of the Sublease Premises during the

first

year. The monthly base rent is equal to

$21.12

and

$21.75

per rentable square foot during the

second

and

third

years, respectively. In connection with the execution of the Sublease, the Company also agreed to pay a security deposit of approximately

$22,000.

The Company was also provided an allowance of approximately

$88,000

for certain tenant improvements relating to the engineering, design and construction of the Sublease Premises which has been reimbursed.

Rent expense for the

three

and

nine

months ended

September 30, 2018

was

$65,000

and

$293,000.

In

September 2018,

the Company entered into a

36

-month noncancelable operating lease agreement for office equipment.  The lease commenced on

September 20, 2018.  

The monthly payment is approximately

$3,000.

 

After the adoption of ASU

842

– Leases on

January 1, 2019,

operating lease rentals are expensed on a straight-line basis over the life of the lease beginning on the date the Company takes possession of the property. At lease inception, the Company determines the lease term by assuming the exercise of those renewal options that are reasonably assured. The lease term is used to determine whether a lease is financing or operating and is used to calculate straight-line rent expense. Additionally, the depreciable life of leasehold improvements is limited by the expected lease term. Leases with an initial term of

12

months or less are

not

recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The following table reflects the Company's lease assets and lease liabilities at

September 30, 2019

and

January 1, 2019 (

in thousands):

	September 30,		January 1,
	2019		2019
Assets:
Operating lease right-of-use assets	$	456	$	629
Liabilities:
Current operating lease liabilities	$	257	$	230
Noncurrent operating lease liabilities		203		399
	$	460	$	629

The operating lease right-of-use assets are included in other assets on the condensed consolidated balance sheet. The operating lease liabilities are included in accrued liabilities and other noncurrent liabilities on the condensed consolidated balance sheet.

The operating leases expense for the

three

and

nine

months ended

September 30, 2019

was

$75,000

and

$225,000,

respectively.

As of

September 30, 2019,

the maturity of operating lease liabilities was as follows (in thousands):

Year Ending December 31,
2019 (remaining three months)	$	75
2020		303
2021		136
Total lease payments		514
Less: Amount representing interest		(54	)
Present value of lease liabilities	$	460

The weighted average remaining lease term was approximately

20

months as of

September 30, 2019.

The weighted average discount rate for the

three

and

nine

months ended

September 30, 2019

was

12.5%.

Lessor:

The following information pertains to those operating lease agreements where the Company is the lessor.

As of

September 30, 2019,

minimum future rentals from customers on non-cancellable operating leases of Viveve Systems are as follows (in thousands):

Year Ending December 31,
2019 (remaining three months)	$	255
2020		324
Thereafter		-
Total	$	579

As of

September 30, 2019,

$456,000

of property and equipment is related to these operating lease agreements. The depreciation expense for that property and equipment for the

three

and

nine

months ended

September 30, 2019

is

$46,000

and

$46,000,

respectively.

XML

Note 11 - Income Taxes

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

11. Income Taxes

No

provision for income taxes has been recorded due to the net operating losses incurred from inception to date, for which

no

benefit has been recorded.

For interim periods, the Company estimates its annual effective income tax rate and applies the estimated rate to the year-to-date income or loss before income taxes. The Company also computes the tax provision or benefit related to items reported separately and recognizes the items net of their related tax effect in the interim periods in which they occur. The Company also recognizes the effect of changes in enacted tax laws or rates in the interim periods in which the changes occur.

The Company’s effective tax rate is

0%

for the

three

and

nine

months ended

September 30, 2019.

The Company expects that its effective tax rate for the full year

2019

will be

0%.

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	[1]
Accounts receivable, allowance for doubtful accounts	$ 543	$ 284
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	75,000,000	75,000,000
Common stock, shares issued (in shares)	1,469,789	463,630
Common stock, shares outstanding (in shares)	1,469,789	463,630

[1] The condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited consolidated financial statements as of that date.

XML

Note 7 - Leases - Lease Assets and Liabilities (Details) - USD ($)	Sep. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Operating Lease, Right-of-Use Asset	$ 456,000	$ 629,000
Current operating lease liabilities	257,000	230,000
Noncurrent operating lease liabilities	203,000	399,000
	$ 460,000	$ 629,000

XML

Note 1 - The Company and Basis of Presentation

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. The Company and Basis of Presentation

Viveve Medical, Inc. (“Viveve Medical”, the “Company”, “we”, “our”, or “us”) designs, develops, manufactures and markets a platform medical technology, which we refer to as

Cryogen-cooled Monopolar RadioFrequency

, or CMRF. Our proprietary CMRF technology is delivered through a radiofrequency generator, handpiece and treatment tip, which collectively, we refer to as the Viveve® System. Viveve Medical competes in the women’s intimate health industry in some countries by marketing the Viveve System as a way to improve the overall well-being and quality of life of women suffering from vaginal introital laxity, for improved sexual function, or stress urinary incontinence, depending on the relevant country-specific clearance or approval.  In the United States, the Viveve System is currently indicated for use in general surgical procedures for electrocoagulation and hemostasis.

ATM Equity Offerings

The Company established an “at-the-market” equity offering program through the filing of a prospectus supplement to its shelf registration statement on Form S-

3,

which was filed on

August 16, 2019,

under which the Company

may

offer and sell, from time-to-time, up to

$6,760,000

aggregate offering price of shares of its common stock (the

“August 2019

ATM Facility”). The Company’s offering of

$6,760,000

of its common stock under the

August 2019

ATM Facility was completed in late

September 2019.

During the

three

months ended

September 30, 2019,

the Company sold

1,004,171

shares of common stock under the

August 2019

ATM Facility for net proceeds, after deducting sales commissions and other offering costs, of approximately

$6,322,000.

As of

September 30, 2019,

the Company had

no

remaining capacity to issue shares under the

August 2019

ATM Facility.

The Company had previously established an “at-the-market” equity offering program through the filing of a prospectus supplement to its shelf registration statement on Form S-

3,

which was filed on

November 8, 2017,

under which the Company could offer and sell, from time-to-time, up to

$25,000,000

aggregate offering price of shares of its common stock (the

“November 2017

ATM Facility”). On

August 16, 2019,

the Company suspended and subsequently terminated the

November 2017

ATM Facility pursuant to the prospectus supplement, dated

November 7, 2017.

The Company will

no

longer make any sales of its common stock under the

November 2017

ATM Facility. During the

three

and

nine

months ended

September 30, 2019,

the Company sold

zero

shares of common stock under the

November 2017

ATM Facility. During the

three

and

nine

months ended

September 30, 2018,

the Company sold

37

and

2,771

shares of common stock under the

November 2017

ATM Facility for net proceeds of approximately

$11,000

and

$1,194,000,

respectively. Through the closing of the

November 2017

ATM Facility in

August 2019,

the Company sold

3,364

shares of common stock under the equity offering program for net proceeds, after deducting sales commissions and other offering costs, of approximately

$1,318,000.

Public Offerings

 In

December 2018,

in connection with the closing of a public offering (the

“December 2018

Offering”), the Company issued an aggregate of

147,285

shares of common stock, including the shares issued in connection with the exercise of the underwriters’ overallotment option, for gross proceeds of approximately

$22,093,000.

The net proceeds to the Company, after deducting underwriting discounts and commissions and other offering expenses, were approximately

$20,385,000.

 

In

February 2018,

in connection with the closing of a public offering (the

“February 2018

Offering”), the Company issued an aggregate of

115,000

shares of common stock, including the shares issued in connection with the exercise of the underwriters’ overallotment option, for gross proceeds of approximately

$34,500,000.

The net proceeds to the Company, after deducting underwriting discounts and commissions and other offering expenses, were approximately

$32,214,000.

 

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 (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form

10

-Q and Article 

8

-

03

of Regulation S-

X.

Accordingly, they do

not

include all of the information and footnotes required by U.S. 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 condensed consolidated 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 Annual Report on Form

10

-K for the year ended

December 31, 2018,

which was filed with the Securities and Exchange Commission on

March 15, 2019.

The results of operations for the

three

and

nine

months ended

September 30, 2019

are

not

necessarily indicative of the results for the year ending

December 

31,

2019

or any future interim period.

Liquidity and Management Plans

The Company has adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standard Codification (“ASC”) Topic

205

-

40,

Presentation of Financial Statements – Going Concern, which requires that management evaluate whether there are relevant conditions and events that, in the aggregate, raise substantial doubt about the entity’s ability to continue as a going concern and to meet its obligations as they become due within

one

year after the date that the financial statements are issued.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. However, since inception, the Company has sustained significant operating losses and such losses are expected to continue for the foreseeable future. As of

September 30, 2019,

the Company had an accumulated deficit of

$183,094,000,

cash and cash equivalents of

$9,086,000

and working capital of

$12,836,000.

Additionally, the Company used

$6,608,000

in cash for operations in the

three

months ended

September 30, 2019

and

$25,862,000

in cash for operations for the

nine

months ended

September 30, 2019.

The Company will require additional cash funding to fund operations through

November 2020.

Accordingly, management has concluded that the Company does

not

have sufficient funds to support operations within

one

year after the date the financial statements are issued and, therefore, the Company concluded there was substantial doubt about the Company’s ability to continue as a going concern.

To fund further operations, the Company will need to raise additional capital. The Company

may

obtain additional financing in the future through the issuance of its common stock, or through other equity or debt financings. The Company’s ability to continue as a going concern or meet the minimum liquidity requirements in the future is dependent on its ability to raise significant additional capital, of which there can be

no

assurance. If the necessary financing is

not

obtained or achieved, the Company will likely be required to reduce its planned expenditures, which could have an adverse impact on the results of operations, financial condition and the Company’s ability to achieve its strategic objective. There can be

no

assurance that financing will be available on acceptable terms, or at all. The financial statements contain

no

adjustments for the outcome of these uncertainties. These factors raise substantial doubt about the Company’s ability to continue as a going concern and have a material adverse effect on the Company’s future financial results, financial position and cash flows.

XML

Note 5 - Accrued Liabilities - Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Accrued bonuses	$ 728		$ 837
Accrued interest	704		683
Deferred revenue - subscription rental program	579
Accrued payroll and other related expenses	500		877
Accrued professional fees	494		978
Customer contracts liabilities	470		686
Accrued sales commission	423		1,743
Current operating lease liabilities	257	$ 230
Accrued clinical trial costs	166		84
Travel and entertainment	54		280
Accrued sales & use tax	9		259
Other accruals	73		339
Total accrued liabilities	$ 4,457	$ 6,996	$ 6,766	[1]

[1] The condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited consolidated financial statements as of that date.

XML

Note 2 - Summary of Significant Accounting Policies - Customer Contract Liabilities (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Customer contract liabilities	$ 470,000	$ 686,000
Change in customer contract liabilities	(216,000)
Marketing Programs [Member]
Customer contract liabilities	470,000	639,000
Change in customer contract liabilities	(169,000)
Product and Service, Other [Member]
Customer contract liabilities		$ 47,000
Change in customer contract liabilities	$ (47,000)

XML

Note 6 - Note Payable (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Schedule of Debt [Table Text Block]

Year Ending December 31,
2019 (remaining three months)	$	710
2020		2,901
2021		16,673
2022		19,306
2023		6,220
Total payments		45,810
Less: Amount representing interest		(13,087	)
Present value of obligations		32,723
Less: Unamortized debt discount		(1,029	)
Note payable, noncurrent portion	$	31,694

XML

Note 1 - The Company and Basis of Presentation (Details Textual) - USD ($)				1 Months Ended				3 Months Ended		9 Months Ended
	Aug. 16, 2019	Feb. 12, 2018	Nov. 08, 2017	Aug. 31, 2019	Dec. 31, 2018		Feb. 28, 2018	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2017
Proceeds from Issuance of Common Stock										$ 6,322,000	$ 33,407,000
Retained Earnings (Accumulated Deficit), Ending Balance					$ (155,385,000)	[1]		$ (183,094,000)		(183,094,000)
Cash and Cash Equivalents, at Carrying Value, Ending Balance					$ 29,523,000	[1]		9,086,000	$ 20,097,000	9,086,000	20,097,000	$ 20,730,000
Working Capital								12,836,000		12,836,000
Net Cash Provided by (Used in) Operating Activities, Total								$ (6,608,000)		$ (25,862,000)	$ (33,245,000)
August 2019 ATM Facility [Member]
Aggregate Offering Price	$ 6,760,000			$ 6,760,000
Stock Issued During Period, Shares, New Issues								1,004,171
Proceeds From Issuance of Common Stock, Net								$ 6,322,000
November 2017 ATM Facility [Member]
Aggregate Offering Price			$ 25,000,000	$ 25,000,000
Stock Issued During Period, Shares, New Issues				3,364				0	37	0	2,771
Proceeds From Issuance of Common Stock, Net				$ 1,318,000				$ 11,000	$ 11,000	$ 1,194,000	$ 1,194,000
December 2018 Offering [Member]
Stock Issued During Period, Shares, New Issues					147,285
Proceeds From Issuance of Common Stock, Net					$ 20,385,000
Proceeds from Issuance of Common Stock					$ 22,093,000
February 2018 Offering [Member]
Stock Issued During Period, Shares, New Issues							115,000
Proceeds From Issuance of Common Stock, Net		$ 32,214,000					$ 32,214,000
Proceeds from Issuance of Common Stock		$ 34,500,000					$ 34,500,000

[1] The condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited consolidated financial statements as of that date.

XML

Note 10 - Summary of Stock Options - Valuation Assumption for Employee Stock Purchase Plan (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Expected term (Year)		5 years	5 years	5 years
Average volatility		70.00%	73.00%	73.00%
Risk-free interest rate		2.86%	2.49%	2.67%
Dividend yield		0.00%	0.00%	0.00%
2017 Employee Stock Purchase Plan [Member]
Expected term (Year)	91 days	91 days	91 days	91 days
Average volatility	98.00%	67.00%	84.00%	67.00%
Risk-free interest rate	2.21%	1.93%	2.40%	1.71%
Dividend yield	0.00%	0.00%	0.00%	0.00%

XML

Note 9 - Common Stock - Summary of Outstanding Warrants (Details) - $ / shares	9 Months Ended
	Sep. 30, 2019	May 22, 2017
Shares Outstanding Under Warrants (in shares)	5,549
Vendors and Contractor Warrants, October 2014 Issuance [Member]
Expiration Date	Oct. 13, 2019
Exercise Price (in dollars per share)	$ 424
Shares Outstanding Under Warrants (in shares)	288
Vendors and Contractor Warrants, November 2014 Issuance [Member]
Expiration Date	Nov. 12, 2019
Exercise Price (in dollars per share)	$ 424
Shares Outstanding Under Warrants (in shares)	125
Employee Performance Bonus Warrants, February 2015 Issuance [Member]
Expiration Date	Feb. 17, 2025
Exercise Price (in dollars per share)	$ 400
Shares Outstanding Under Warrants (in shares)	754
Contractor Warrants, March 2015 Issuance [Member]
Expiration Date	Mar. 26, 2025
Exercise Price (in dollars per share)	$ 272
Shares Outstanding Under Warrants (in shares)	14
Contractor Warrants, May 2015 Issuance [Member]
Expiration Date	May 12, 2025
Exercise Price (in dollars per share)	$ 424
Shares Outstanding Under Warrants (in shares)	362
May 2015 Issuance Second Contractor [Member]
Expiration Date	May 17, 2020
Exercise Price (in dollars per share)	$ 424
Shares Outstanding Under Warrants (in shares)	215
Performance Bonus Warrants, December 2015 Issuance [Member]
Expiration Date	Dec. 16, 2025
Exercise Price (in dollars per share)	$ 560
Shares Outstanding Under Warrants (in shares)	267
Distributor Warrants, April 2016 Issuance [Member]
Expiration Date	Apr. 01, 2026
Exercise Price (in dollars per share)	$ 608
Shares Outstanding Under Warrants (in shares)	250
Contractor Warrants, May 2016 Issuance [Member]
Expiration Date	May 11, 2021
Exercise Price (in dollars per share)	$ 774
Shares Outstanding Under Warrants (in shares)	50
June 2016 Issuance Related to 2016 Loan Agreement [Member]
Expiration Date	Jun. 20, 2026
Exercise Price (in dollars per share)	$ 498
Shares Outstanding Under Warrants (in shares)	1,004
May 2017 Issuance Related to 2017 Loan Agreement [Member]
Expiration Date	May 25, 2027
Exercise Price (in dollars per share)	$ 950	$ 950
Shares Outstanding Under Warrants (in shares)	2,220	2,220

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 06, 2019
Document Information [Line Items]
Entity Registrant Name	VIVEVE MEDICAL, INC.
Entity Central Index Key	0000879682
Trading Symbol	vive
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding (in shares)		1,477,529
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Title of 12(b) Security	Common Stock

XML

Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($) $ in Thousands	February 2018 Offering [Member] Common Stock [Member]	February 2018 Offering [Member] Additional Paid-in Capital [Member]	February 2018 Offering [Member]	November 2017 ATM Facility [Member] Common Stock [Member]	November 2017 ATM Facility [Member] Additional Paid-in Capital [Member]	November 2017 ATM Facility [Member] Retained Earnings [Member]	November 2017 ATM Facility [Member]	August 2019 ATM Facility [Member] Common Stock [Member]	August 2019 ATM Facility [Member] Additional Paid-in Capital [Member]	August 2019 ATM Facility [Member] Retained Earnings [Member]	August 2019 ATM Facility [Member]	Consultant [Member] Common Stock [Member]	Consultant [Member] Additional Paid-in Capital [Member]	Consultant [Member] Retained Earnings [Member]	Consultant [Member]	Director [Member] Common Stock [Member]	Director [Member] Additional Paid-in Capital [Member]	Director [Member] Retained Earnings [Member]	Director [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balances (in shares) at Dec. 31, 2017																				195,033
Balances at Dec. 31, 2017																					$ 102,981	$ (105,581)	$ (2,600)
Stock-based compensation expense																					645		645
Issuance of common shares from employee stock purchase plan (in shares)																				207
Issuance of common shares from employee stock purchase plan																					65		65
Issuance of restricted shares (in shares)																				221
Issuance of restricted shares																					108		108
Net loss																						(12,669)	(12,669)
Stock offering, net of issuance costs (in shares)	115,000			2,082
Stock offering, net of issuance costs		$ 32,225	$ 32,225		$ 1,011		$ 1,011
Cumulative effect adjustment from adoption of new accounting standard – ASC 606																						177	177
Balances (in shares) at Mar. 31, 2018																				312,543
Balances at Mar. 31, 2018																					137,035	(118,073)	18,962
Balances (in shares) at Dec. 31, 2017																				195,033
Balances at Dec. 31, 2017																					102,981	(105,581)	(2,600)
Net loss																							(36,489)
Stock offering, net of issuance costs (in shares)							2,771
Balances (in shares) at Sep. 30, 2018																				315,226
Balances at Sep. 30, 2018																					139,126	(141,893)	(2,767)
Balances (in shares) at Mar. 31, 2018																				312,543
Balances at Mar. 31, 2018																					137,035	(118,073)	18,962
Stock-based compensation expense																					709		709
Issuance of common shares from employee stock purchase plan (in shares)																				256
Issuance of common shares from employee stock purchase plan																					59		59
Issuance of restricted shares (in shares)																				208
Issuance of restricted shares																					67		67
Issuance of common shares in connection with restricted stock award to employee (in shares)																				1,000
Issuance of common shares in connection with restricted stock award to employee																					256		256
Net loss																						(11,516)	(11,516)
Stock offering, net of issuance costs (in shares)				652
Stock offering, net of issuance costs					171		$ 171
February 2018 Offering issuance costs																					(11)		(11)
Balances (in shares) at Jun. 30, 2018																				314,659
Balances at Jun. 30, 2018																					138,286	(129,589)	8,697
Stock-based compensation expense																					698		698
Issuance of common shares from employee stock purchase plan (in shares)																				286
Issuance of common shares from employee stock purchase plan																					64		64
Issuance of restricted shares (in shares)																				182
Issuance of restricted shares																					47		47
Issuance of common shares in connection with restricted stock award to employee (in shares)																				62
Issuance of common shares in connection with restricted stock award to employee																					20		20
Net loss																						(12,304)	(12,304)
Stock offering, net of issuance costs (in shares)				37			37
Stock offering, net of issuance costs					$ 11		$ 11
Balances (in shares) at Sep. 30, 2018																				315,226
Balances at Sep. 30, 2018																					139,126	(141,893)	(2,767)
Balances (in shares) at Dec. 31, 2018																				463,630
Balances at Dec. 31, 2018																					160,297	(155,385)	4,912	[1]
Stock-based compensation expense																					470		470
Issuance of common shares from employee stock purchase plan (in shares)																				429
Issuance of common shares from employee stock purchase plan																					35		35
Issuance of restricted shares (in shares)												274
Issuance of restricted shares													$ 25		$ 25
Issuance of common shares in connection with restricted stock award to employee (in shares)																				6
Issuance of common shares in connection with restricted stock award to employee																					1		1
Net loss																						(10,029)	(10,029)
Balances (in shares) at Mar. 31, 2019																				464,339
Balances at Mar. 31, 2019																					160,828	(165,414)	(4,586)
Balances (in shares) at Dec. 31, 2018																				463,630
Balances at Dec. 31, 2018																					160,297	(155,385)	4,912	[1]
Net loss																							(27,709)
Stock offering, net of issuance costs (in shares)							0
Balances (in shares) at Sep. 30, 2019																				1,469,789
Balances at Sep. 30, 2019																					168,304	(183,094)	(14,790)
Balances (in shares) at Mar. 31, 2019																				464,339
Balances at Mar. 31, 2019																					160,828	(165,414)	(4,586)
Stock-based compensation expense																					562		562
Issuance of common shares from employee stock purchase plan (in shares)																				602
Issuance of common shares from employee stock purchase plan																					20		20
Issuance of restricted shares (in shares)												250				527
Issuance of restricted shares													$ 11		$ 11		$ 48		$ 48
Issuance of common shares in connection with restricted stock award to employee (in shares)																				6
Issuance of common shares in connection with restricted stock award to employee
Net loss																						(9,724)	(9,724)
Balances (in shares) at Jun. 30, 2019																				465,724
Balances at Jun. 30, 2019																					161,469	(175,138)	(13,669)
Stock-based compensation expense																					503		503
Issuance of common shares from employee stock purchase plan (in shares)																				200
Issuance of common shares from employee stock purchase plan																					1		1
Issuance of restricted shares (in shares)																				378
Issuance of restricted shares																					14		14
Issuance of common shares in connection with restricted stock award to employee (in shares)																				4
Issuance of common shares in connection with restricted stock award to employee
Net loss																						(7,956)	(7,956)
Stock offering, net of issuance costs (in shares)							0	1,004,171			1,004,171
Stock offering, net of issuance costs									$ 6,322		$ 6,322
Reverse stock split - cancellation and payout of fractional shares (in shares)																				(688)
Reverse stock split - cancellation and payout of fractional shares																					(5)		(5)
Balances (in shares) at Sep. 30, 2019																				1,469,789
Balances at Sep. 30, 2019																					$ 168,304	$ (183,094)	$ (14,790)

[1] The condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited consolidated financial statements as of that date.

XML

Note 6 - Note Payable - Summary of Note Payable (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	[1]
2019 (remaining three months)	$ 710
2020	2,901
2021	16,673
2022	19,306
2023	6,220
Total payments	45,810
Less: Amount representing interest	(13,087)
Present value of obligations	32,723
Less: Unamortized debt discount	(1,029)
Note payable, noncurrent portion	$ 31,694	$ 30,528

[1] The condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited consolidated financial statements as of that date.

XML

Note 3 - Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

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. 

There were

no

financial instruments that were measured at fair value on a recurring basis as of

September 30, 2019

and

December 31, 2018.

The carrying amounts of the Company’s financial assets and liabilities, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses as of

September 30, 2019,

and

December 31, 2018

approximate fair value because of the short maturity of these instruments. Based on borrowing rates currently available to the Company for loans with similar terms, the carrying value of the note payable approximates fair value. 

There were

no

changes in valuation techniques from prior periods.

XML

Note 2 - Summary of Significant Accounting Policies - Antidilutive Securities (Details) - shares	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Share-based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share (in shares)	50,471	42,917
Common Stock Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share (in shares)	5,549	6,408
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share (in shares)	3,432	600

XML

Note 13 - Restructuring Costs

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Restructuring and Related Activities Disclosure [Text Block]

13. Restructuring Costs

In

January 2019,

the Company implemented a strategic organizational realignment plan to reduce operating expenses and prepare the Company for expanded indications for its CMRF technology platform for improved sexual function and stress urinary incontinence in women. The restructuring included a reduction in headcount of approximately

40

full-time employees. The total restructuring costs were approximately

$742,000

and have been recorded in operating expenses in the condensed consolidated statements of operations. As of

September 30, 2019,

the total restructuring costs have been fully paid out. The restructuring contributed to a reduction in total operating expenses in the

first

quarter of

2019

as planned and is expected to result in additional operating cost savings throughout the remainder of this year.

XML

Note 5 - Accrued Liabilities

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

5. Accrued Liabilities

Accrued liabilities consisted of the following as of

September 30, 2019

and

December 31, 2018 (

in thousands): 

	September 30,		December 31,
	2019		2018
Accrued bonuses	$	728	$	837
Accrued interest		704		683
Deferred revenue - subscription rental program		579		-
Accrued payroll and other related expenses		500		877
Accrued professional fees		494		978
Customer contracts liabilities		470		686
Accrued sales commission		423		1,743
Current operating lease liabilities		257		-
Accrued clinical trial costs		166		84
Travel and entertainment		54		280
Accrued sales & use tax		9		259
Other accruals		73		339
Total accrued liabilities	$	4,457	$	6,766

XML

Note 9 - Common Stock

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

9. Common Stock

Through the

August 2019

ATM Facility, the Company

may

offer and sell, from time-to-time, up to

$6,760,000

aggregate offering price of shares of its common stock”). The Company’s offering of

$6,760,000

of its common stock under the

August 2019

ATM Facility was completed in late

September 2019.

During the

three

months ended

September 30, 2019,

the Company sold

1,004,171

shares of common stock under the

August 2019

ATM Facility for net proceeds, after deducting sales commissions and other offering costs, of approximately

$6,322,000.

In

August 2019,

the Company terminated the

November 2017

ATM Facility under which the Company could offer and sell, from time-to-time, up to

$25,000,000

aggregate offering price of shares of its common stock. During the

three

and

nine

months ended

September 30, 2019,

the Company sold

zero

shares of common stock under the

November 2017

ATM Facility. During the

three

and

nine

months ended

September 30, 2018,

the Company sold

37

and

2,771

shares of common stock under the

November 2017

ATM Facility for net proceeds, after deducting sales commissions and other offering costs, of approximately

$11,000

and

$1,194,000,

respectively. Through the closing of the

November 2017

ATM Facility in

August 2019,

the Company sold

3,364

shares of common stock under the equity offering program for net proceeds of approximately

$1,318,000.

In

March 2019,

the Company issued

274

restricted shares of its common stock at an aggregate value of approximately

$25,000.

In

December 2018,

in connection with the closing of the

December 2018

Offering, the Company issued an aggregate of

147,285

shares of common stock, including the shares issued in connection with the exercise of the underwriters’ overallotment option, for gross proceeds of approximately

$22,093,000.

The net proceeds to the Company, after deducting underwriting discounts and commissions and other offering expenses, were approximately

$20,385,000.

 

In

June 2018,

the Company issued

1,000

restricted shares of its common stock at an aggregate value of approximately

$256,000.

In

February 2018,

in connection with the closing of the

February 2018

Offering, the Company issued an aggregate of

115,000

shares of common stock, including the shares issued in connection with the exercise of the underwriters’ overallotment option, for gross proceeds of approximately

$34,500,000.

The net proceeds to the Company, after deducting underwriting discounts and commissions and other offering expenses, were approximately

$32,214,000.

 

Warrants for Common Stock

As of

September 30, 2019,

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
October 2014	Common Shares	October 13, 2019	$	424.00		288
November 2014	Common Shares	November 12, 2019	$	424.00		125
February 2015	Common Shares	February 17, 2025	$	400.00		754
March 2015	Common Shares	March 26, 2025	$	272.00		14
May 2015	Common Shares	May 12, 2025	$	424.00		362
May 2015	Common Shares	May 17, 2020	$	424.00		215
December 2015	Common Shares	December 16, 2025	$	560.00		267
April 2016	Common Shares	April 1, 2026	$	608.00		250
May 2016	Common Shares	May 11, 2021	$	774.00		50
June 2016	Common Shares	June 20, 2026	$	498.00		1,004
May 2017	Common Shares	May 25, 2027	$	950.00		2,220
						5,549

 In connection with the

2017

Loan Agreement, the Company issued warrants to purchase a total of

2,220,

shares of common stock at an exercise price of

$950.00

per share. The warrants have a contractual life of

ten

years and are exercisable immediately in whole or in part. The Company determined the fair value of the warrants on the date of issuance to be

$940,000

using the Black-Scholes option pricing model. Assumptions used were dividend yield of

0%,

volatility of

55.1%,

risk free interest rate of

2.25%

and a contractual life of

ten

years. The fair value of the warrants along with financing and legal fees totaling

$790,000,

are recorded as debt issuance costs and presented in 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

and

nine

months ended

September 30, 2019,

the Company recorded

$92,000

and

$270,000,

respectively, of interest expense relating to the debt issuance costs using the effective interest method. During the

three

and

nine

months ended

September 30, 2018,

the Company recorded

$82,000

and

$242,000,

respectively, of interest expense relating to the debt issuance costs using the effective interest method.

No

shares issuable pursuant to warrants were issued in connection with the exercise of warrants during the

three

and

nine

months ended

September 30, 2019

and

2018.

No

shares issuable pursuant to warrants have been cancelled during the

three

and

nine

months ended

September 30, 2019

and

2018.

A total of

859

shares issuable pursuant to warrants expired during the

three

and

nine

months ended

September 30, 2019.

No

shares issuable pursuant to warrants expired during the

three

and

nine

months ended

September 30, 2018.

XML

Note 7 - Leases (Details Textual)	1 Months Ended	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Feb. 01, 2017 USD ($) ft²
Operating Leases, Rent Expense, Total			$ 65,000		$ 293,000
Operating Lease, Cost		$ 75,000		$ 225,000
Operating Lease, Weighted Average Discount Rate, Percent		12.50%		12.50%
Sublease Agreement for Relocation of Headquarters [Member]
Area of Real Estate Property | ft²						12,400
Operating Leases, Monthly Rent Per Rentable Square Foot During First Year						20.5
Operating Leases, Monthly Rent Per Rentable Square Foot During Second Year						21.12
Operating Leases, Monthly Rent Per Rentable Square Foot During Third Year						21.75
Security Deposit						$ 22,000
Operating Leases, Allowance for Certain Improvements						$ 88,000
Noncancelable Operating Lease Agreement for Office Equipment [Member]
Lessee, Operating Lease, Term of Contract	3 years		3 years		3 years
Operating Leases, Monthly Payment	$ 3,000
Leases of Viveve Systems [Member]
Operating Lease, Property Plant and Equipment, Amount		$ 456,000		$ 456,000
Lessor, Operating Lease, Depreciation on Leased Assets		$ 46,000		$ 46,000

XML

Note 2 - Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

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 subsidiaries, Viveve, Inc. and Viveve BV. All significant intercompany accounts and transactions have been eliminated in consolidation.

Reverse Stock Split

On

September 18, 2019,

the Company effected a

1

-for-

100

reverse stock split of its common stock that became effective after market close on

September 18, 2019.

The reverse stock split uniformly affected all issued and outstanding shares of the Company’s common stock. The reverse stock split did

not

alter any stockholder's percentage ownership interest in the Company, except to the extent that the reverse stock split resulted in fractional shares.

No

fractional shares were issued in connection with the reverse stock split. Any fractional shares that resulted from the reverse stock split were rounded down, and stockholders were issued cash in lieu of such fractional share interest.

The par value of the Company’s common stock remained unchanged at

$0.0001

per share after the reverse stock split.

The number of authorized shares of common stock remained at

75

million.

The reverse stock split proportionately affected the number of shares of common stock available for issuance under the Company’s equity incentive plans. All stock options, warrants and restricted stock awards of the Company outstanding shares immediately prior to the reverse stock split were adjusted in accordance with their terms.

On the effective date of the reverse stock split, (i) each

100

shares of outstanding common stock were reduced to

one

share of common stock; (ii) the number of shares of common stock into which each outstanding stock option or warrant to purchase common stock is exercisable were proportionately reduced on an

100

-to-

1

basis; (iii) the exercise price of each outstanding stock option or warrant to purchase common stock were proportionately increased on a

1

-to-

100

basis; and (iv) the number of shares of common stock each outstanding restricted stock award will be issued upon vesting were proportionally reduced on a

100

-to-

1

basis.

All of the share numbers, share prices, and exercise prices have been adjusted, on a retroactive basis, to reflect this

1

-for-

100

reverse stock split.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. 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. 

Changes in Accounting Policies

Except for the changes for the adoption of the new accounting standard for leases, the Company has consistently applied the accounting policies to all periods presented in these condensed consolidated financial statements.

Adoption of New Accounting Standard - Leases

The Company adopted FASB’s Accounting Standards Update (“ASU”)

No.

2016

-

02,

Leases (Topic

842

), as of

January 1, 2019,

using the modified retrospective approach. The modified retrospective approach provides a method for recording existing leases at the beginning of the period of adoption. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification and we elected the hindsight practical expedient to determine the lease term for existing leases. We determined that the renewal options for the facilities lease would be reasonably certain to be renewed and as such, included that renewal period in determining the expected lease term of that lease. Adoption of the new standard resulted in the recording of operating lease right-of-use assets of

$629,000

and operating lease liabilities of

$629,000,

as of

January 1, 2019.

The standard did

not

have an impact on our consolidated results of operations, cash flows or stockholders’ equity previously reported. The comparative information has

not

been restated and continues to be reported under the accounting standards in effect for those periods.

The effect of the changes made to our consolidated

January 1, 2019

balance sheet for the adoption of the new lease standard was as follows (in thousands): 

			Adjustments
			Due to
	December 31,		Adoption of			January 1,
	2018		ASC 842			2019
Other assets	$	171	$	629	(1)	$	800
Total assets	$	46,834	$	629	(1)	$	47,463
Accrued liabilities	$	6,766	$	230	(2)	$	6,996
Total current liabilities	$	10,760	$	230	(2)	$	10,990
Other noncurrent liabilities	$	634	$	399	(2)	$	1,033
Total liabilities	$	41,922	$	629	(2)	$	42,551
Total liabilities and stockholders' equity	$	46,834	$	629	(2)	$	47,463

( 1 )	Represents capitalization of operating lease right-of-use assets and reclassification of deferred rent.
( 2 )	Represents recognition of operating lease liabilities.

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 accounts primarily 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.

Most of the Company’s products to date require clearance or approvals from the U.S. Food and Drug Administration (“FDA”) or other international regulatory agencies prior to commencing commercial sales. There can be

no

assurance that the Company’s products will receive any of these required clearances or approvals or for the indications requested. If the Company was denied such clearances or approvals or if such clearances or approvals were delayed, it would have a material adverse effect 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. 

The Company designs, develops, manufactures and markets a medical device that it refers to as the Viveve System, which is intended for the non-invasive treatment of vaginal introital laxity, for improved sexual function, for vaginal rejuvenation, for use in general surgical procedures for electrocoagulation and hemostasis, and stress urinary incontinence, depending on the relevant country-specific clearance or approval. The Viveve System consists of

three

main components: a RF, or radio frequency, generator housed in a table-top console, a reusable handpiece and a single-use treatment tip. Included with the system are single-use accessories (e.g. RF return pad, coupling fluid), as well as a cryogen canister that can be used for approximately

four

to

five

procedures, and a foot pedal. The Company outsources the manufacture and repair of the Viveve System to a single contract manufacturer. Also, certain other components and materials that comprise the device are currently manufactured by a single supplier or a limited number of suppliers. A significant supply interruption or disruption in the operations of the contract manufacturer or these

third

-party suppliers would adversely impact the production of our products for a substantial period of time, which could have a material adverse effect on our business, financial condition, operating results and cash flows.

In North America, the Company sells its products primarily through a direct sales force to health care practitioners. Outside North America, the Company sells through an extensive network of distribution partners. During the

three

months ended

September 30, 2019,

two

distributors, collectively, accounted for

31

% of the Company’s revenue. During the

three

months ended

September 30, 2018,

three

distributors accounted for

42%

of the Company’s revenue. During the 

nine

 months ended

September 30, 2019,

one

distributor accounted for

17

% of the Company’s revenue. During the

nine

months ended

September 30, 2018,

one

distributor accounted for

21%

of the Company’s revenue.

There were

no

direct sales customers that accounted for more than

10%

of the Company’s revenue during the

three

and

nine

months ended

September 30, 2019

and

2018.

As of

September 30, 2019,

four

distributors, collectively, accounted for

67%

of total accounts receivable, net. As of

December 31, 2018,

three

distributors, collectively, accounted for

54%

of total accounts receivable, net.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at the invoiced amount and are

not

interest bearing. Our typical payment terms vary by region and type of customer (distributor or physician). Occasionally, payment terms of up to

six

months

may

be granted to customers with an established history of collections without concessions. Should we grant payment terms greater than

six

months or terms that are

not

in accordance with established history for similar arrangements, revenue would be recognized as payments become due and payable assuming all other criteria for revenue recognition have been met. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company makes ongoing assumptions relating to the collectability of its accounts receivable in its calculation of the allowance for doubtful accounts. In determining the amount of the allowance, the Company makes judgments about the creditworthiness of customers based on ongoing credit evaluations and assesses current economic trends affecting its customers that might impact the level of credit losses in the future and result in different rates of bad debts than previously seen. The Company also considers its historical level of credit losses. The allowance for doubtful accounts was

$543,000

as of

September 30, 2019

and

$284,000

as of

December 31, 2018.

Revenue Recognition

Revenue consists primarily of the sale of the Viveve System, single-use treatment tips and ancillary consumables. The Company applies the following

five

steps: (

1

) identify the contract with a customer, (

2

) identify the performance obligations in the contract, (

3

) determine the transaction price, (

4

) allocate the transaction price to the performance obligations in the contract, and (

5

) recognize revenue when a performance obligation is satisfied. The Company considers customer purchase orders to be the contracts with a customer. Revenues, net of expected discounts, are recognized when the performance obligations of the contract with the customer are satisfied and when control of the promised goods are transferred to the customer, typically when products, which have been determined to be the only distinct performance obligations, are shipped to the customer. Expected costs of assurance warranties and claims are recognized as expense. Revenue is recognized net of any sales taxes from the sale of the products.

Rental revenue is generated through the lease of the Viveve System. The Company’s operating leases for the Viveve System have a rental period of

six

months and can be extended or terminated by the customer after that time or the Viveve System can be purchased by the customer. Rental revenue on those operating leases is recognized on a straight-line basis over the terms of the underlying leases. The Company began this rental program in the quarter ended

June 30, 2019

and the revenue associated with it has

not

been material to the periods presented. As of 

September 30, 2019,

the Company had deferred revenue in the amount of

$579,000

related to its rental program.

In connection with the lease of the Viveve System, the Company offers single-use treatment tips and ancillary consumables that are considered nonlease components. In the contracts with lease and nonlease components, the Company follows the relevant guidance in ASC

606,

Revenue from Contracts with Customers, to determine how to allocate contractual consideration between the lease and nonlease components.

Sales of our products are subject to regulatory requirements that vary from country to country. The Company has regulatory clearance for differing indications, or can sell its products without a clearance, in many countries throughout the world, including countries within the following regions: North America, Latin America, Europe, the Middle East and Asia Pacific. In North America, we market and sell primarily through a direct sales force. Outside of North America, we market and sell primarily through distribution partners.

The Company does 

not

 provide its customers with a right of return.

Customer Advance Payments

From time to time, customers will pay for a portion of the products ordered in advance.  Upon receipt of such payments, the Company records the customer advance payment as a component of accrued liabilities.  The Company will remove the customer advance payment from accrued liabilities when revenue is recognized upon shipment of the products. 

Contract Assets and Liabilities

The Company continually evaluates whether the revenue generating activities and advanced payment arrangements with customers result in the recognition of contract assets or liabilities.

No

such assets existed as of 

September 30, 2019

or 

December 

31,

2018.

The Company had customer contracts liabilities in the amount of

$470,000,

primarily related to marketing programs that performance had

not

yet been delivered to its customers as of

September 30, 2019

and

$686,000

as of

December 31, 2018.

The following table reflects the changes in our customer contract liabilities for the

nine

months ended

September 30, 2019:

	September 30,		December 31,		Nine Months
	2019		2018		Change
Customer contracts liabilities:
Marketing programs	$	470	$	639	$	(169	)
Other		-		47		(47	)
Total	$	470	$	686	$	(216	)

Separately, accounts receivable, net represents receivables from contracts with customers.

Significant Financing Component

The Company applies the practical expedient to

not

make any adjustment for a significant financing component if, at contract inception, the Company does

not

expect the period between customer payment and transfer of control of the promised goods or services to the customer to exceed

one

year. During the 

three

and

nine

months ended

September 30, 2019

and

2018,

the Company did

not

have any contracts for the sale of its products with its customers with a significant financing component.

Contract Costs

 

The Company expects that commissions paid to obtain subscriptions are recoverable and has therefore capitalized them as a contract costs in the amount of

$198,000

and

$0

at

September 30, 2019

and

2018,

respectively. Capitalized commissions are amortized based on the subscription periods to which the assets relate and are included in selling, general and administrative expenses. For the

three

and

nine

months ended

September 30, 2019,

the amount of amortization was

$30,000

(

$0

in

2018

). There was

no

impairment loss in relation to the costs capitalized. The Company has elected the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is less than

six

months.

Shipping and Handling

Shipping costs billed to customers are recorded as revenue. Shipping and handling expense related to costs incurred to deliver product are recognized within cost of goods sold. The Company accounts for shipping and handling activities that occur after control has transferred as a fulfillment cost as opposed to a separate performance obligation, and the costs of shipping and handling are recognized concurrently with the related revenue.

Revenue by Geographic Area

Management has determined that the sales by geography is a key indicator for understanding the Company’s financials because of the different sales and business models that are required in the various regions of the world (including regulatory, selling channels, pricing, customers and marketing efforts). The following table presents the revenue from unaffiliated customers disaggregated by geographic area for the

three

and

nine

months ended

September 30, 2019

and

2018

(in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
North America	$	652	$	3,455	$	3,106	$	10,613
Asia Pacific		373		717		1,684		2,238
Europe and Middle East		27		612		316		1,143
Latin America		-		37		10		51
Total	$	1,052	$	4,821	$	5,116	$	14,045

The Company determines geographic location of its revenue based upon the destination of the shipments of its products.

Investments in Unconsolidated Affiliates

The Company uses the equity method to account for its investments in entities that it does

not

control but have the ability to exercise significant influence over the investee. Equity method investments are recorded at original cost and adjusted periodically to recognize (

1

) the proportionate share of the investees’ net income or losses after the date of investment, (

2

) additional contributions made and dividends or distributions received, and (

3

) impairment losses resulting from adjustments to net realizable value. The Company eliminates all intercompany transactions in accounting for equity method investments. The Company records the proportionate share of the investees’ net income or losses in equity in earnings of unconsolidated affiliates on the condensed consolidated statements of operations. The Company utilizes a

three

-month lag in reporting equity income from its investments, adjusted for known amounts and events, when the investee’s financial information is

not

available timely or when the investee’s reporting period differs from our reporting period.

The Company assesses the potential impairment of the equity method investments when indicators such as a history of operating losses, a negative earnings and cash flow outlook, and the financial condition and prospects for the investee’s business segment might indicate a loss in value. The carrying value of the investments is reviewed annually for changes in circumstances or the occurrence of events that suggest the investment

may

not

be recoverable.

No

impairment charges have been recorded in the condensed consolidated statements of operations during the

three

and

nine

months ended

September 30, 2019

and

2018.

Product Warranty

The Company’s products are generally subject to warranties between

one

and

three

years, which provides for the repair, rework or replacement of products (at the Company’s option) that fail to perform within stated specifications. The Company has assessed the historical claims and, to date, product warranty claims have

not

been significant.

Accounting for Stock-Based Compensation

Share-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized as expense over the employee’s service period. The Company recognizes compensation expense on a straight-line basis over the requisite service period of the award.

The Company determined that the Black-Scholes option pricing model is the most appropriate method for determining the estimated fair value for stock options and purchase rights under the employee stock purchase plan. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions which determine the fair value of share-based awards, including the option’s expected term and the price volatility of the underlying stock.

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 represents the changes in equity of an enterprise, other than those resulting from stockholder transactions. Accordingly, comprehensive loss

may

include certain changes in equity that are excluded from net loss. For the

three

months and

nine

months ended

September 30, 2019

and

2018,

the Company’s comprehensive loss is the same as its net loss. 

Net Loss per Share

The Company’s basic net loss per share 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 is computed by giving effect to all potentially dilutive common stock equivalents outstanding during the period. For purposes of this calculation, stock options and warrants to purchase common stock and restricted common stock awards are considered common stock equivalents. For periods in which the Company has reported net losses, diluted net loss per share is the same as basic net loss per share, since dilutive common shares are

not

assumed to have been issued if their effect is anti-dilutive.

The following securities were excluded from the calculation of net loss per share because the inclusion would be anti-dilutive. 

	Nine Months Ended
	September 30,
	2019		2018
Stock options to purchase common stock		50,471		42,917
Warrants to purchase common stock		5,549		6,408
Restricted common stock awards		3,432		600

Other Recently Issued and Adopted Accounting Standards

In

June 2018,

the FASB issued ASU

2018

-

07,

“Stock Compensation (Topic

718

) – Improvements to Nonemployee Share- Based Payment Accounting”. The intent of this guidance is to simplify the accounting for nonemployee share-based payment accounting. The amendments in this guidance expand the scope of Topic

718

to include share-based payment transactions for acquiring goods and services from nonemployees. Consistent with the accounting requirement for employee share-based payment awards, nonemployee share-based payment awards within the scope of Topic

718

are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. Equity- classified nonemployee share-based payment awards are measured at the grant date. Consistent with the accounting for employee share-based payment awards, an entity considers the probability of satisfying performance conditions when nonemployee share-based payment awards contain such conditions. This guidance is effective for annual reporting periods beginning after

December 15, 2018,

including interim periods within the reporting period. We adopted this guidance as of

January 1, 2019

and the adoption of the guidance did

not

have a significant impact on the condensed consolidated financial statements.

We have reviewed other recent accounting pronouncements and concluded they are either

not

applicable to the business, or

no

material effect is expected on the consolidated financial statements as a result of future adoption.

XML

Note 4 - Investment in Limited Liability Company (Details Textual)		3 Months Ended		9 Months Ended
	Aug. 08, 2017 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Income (Loss) from Equity Method Investments, Total		$ (168,000)	$ (132,000)	$ (431,000)	$ (539,000)
Membership Unit Subscription Agreement [Member] | InControl Medical [Member]
Accounts Payable, Related Parties, Current		$ 0		$ 0		$ 0
InControl Medical [Member]
Equity Method Investment, Ownership Percentage		7.00%		7.00%
Income (Loss) from Equity Method Investments, Total		$ (168,000)	$ (132,000)	$ (431,000)	$ (539,000)
InControl Medical [Member] | Membership Unit Subscription Agreement [Member]
Unrecorded Unconditional Purchase Obligation, Period Quantity Purchased				4,800
Payments for Purchase of Products		$ 0		$ 27,000
Payments to Acquire Equity Method Investments	$ 2,500,000

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenue	$ 1,052,000	$ 4,821,000	$ 5,116,000	$ 14,045,000
Cost of revenue	1,099,000	3,327,000	3,981,000	8,390,000
Gross profit (loss)	(47,000)	1,494,000	1,135,000	5,655,000
Operating expenses:
Research and development	1,449,000	3,442,000	6,831,000	10,870,000
Selling, general and administrative	5,032,000	9,114,000	17,188,000	27,482,000
Restructuring costs			742,000
Total operating expenses	6,481,000	12,556,000	24,761,000	38,352,000
Loss from operations	(6,528,000)	(11,062,000)	(23,626,000)	(32,697,000)
Interest expense, net	(1,209,000)	(1,106,000)	(3,519,000)	(3,239,000)
Other expense, net	(51,000)	(4,000)	(133,000)	(14,000)
Net loss from consolidated companies	(7,788,000)	(12,172,000)	(27,278,000)	(35,950,000)
Loss from minority interest in limited liability company	(168,000)	(132,000)	(431,000)	(539,000)
Comprehensive and net loss	$ (7,956,000)	$ (12,304,000)	$ (27,709,000)	$ (36,489,000)
Net loss per share:
Basic and diluted (in dollars per share)	$ (13.51)	$ (39.07)	$ (54.73)	$ (123.41)
Weighted average shares used in computing net loss per common share:
Basic and diluted (in shares)	588,976	314,899	506,329	295,677

XML

Note 4 - Investment in Limited Liability Company

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

4. Investment in Limited Liability Company

On

August 8, 2017,

the Company entered into an exclusive Distributorship Agreement (the “Distributorship Agreement”) with InControl Medical, LLC (“ICM”), a Wisconsin limited liability company focused on women's health, pursuant to which the Company will directly market, promote, distribute and sell ICM’s products to licensed medical professional offices and hospitals in North America.

Under the terms of the Distributorship Agreement, ICM agreed to

not

directly or indirectly appoint or authorize any

third

party to market, promote, distribute or sell any of the licensed products to any licensed medical professional offices and hospitals in the United States. In exchange, the Company agreed to

not

market, promote, distribute or sell (or contract to do so) any product which substantially replicates all or almost all of the key features of the licensed products. The Company has a minimum purchase requirement to purchase a certain quantity of ICM products per month during the term of this Distributorship Agreement. In addition, the parties agreed to certain mutual marketing obligations to promote sales of the licensed products. As of

September 30, 2019,

the Company has purchased approximately

4,800

units of ICM products. The Company paid ICM approximately 

zero

and

$27,000

for product related costs during the

three

and

nine

months ended

September 30, 2019

respectively.  There were

no

amounts due to ICM for the accounts payable as of

September 30, 2019

and

December 31, 2018.

In connection with the Distributorship Agreement, the Company also entered into a Membership Unit Subscription Agreement with ICM and the associated limited liability company operating agreement of ICM, pursuant to which the Company invested

$2,500,000

in, and acquired membership units of, ICM. This investment has been recorded in investment in a limited liability company in the condensed consolidated balance sheets. The Company used the equity method to account for the investment in ICM because the Company does

not

control it but has the ability to exercise significant influence over it. As of

September 30, 2019,

the Company owns approximately

7%

ownership interest in ICM. The Company recognizes its allocated portion of ICM’s results of operations on a

three

-month lag due to the timing of financial information. For the

three

and

nine

months ended

September 30, 2019,

the allocated net loss from ICM’s operations was

$168,000

and

$431,000,

respectively. For the

three

and

nine

months ended

September 30, 2018,

the allocated net loss from ICM’s operations was

$132,000

and

$539,000,

respectively. The allocated net loss from ICM’s operations was recorded as loss from minority interest in limited liability company in the condensed consolidated statements of operations.

In

February 2019,

the Company executed a mutual termination of the Distributorship Agreement with ICM. As a result, the Company

no

longer has a minimum purchase requirement to purchase a certain quantity of ICM products per month.

XML

Note 8 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

8. Commitments and Contingencies

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. 

Loss Contingencies

The Company is or has been subject to proceedings, lawsuits and other claims arising in the ordinary course of business. The Company evaluates contingent liabilities, including threatened or pending litigation, for potential losses. If the potential loss from any claim or legal proceeding is considered probable and the amount can be estimated, the Company accrues a liability for the estimated loss. Because of uncertainties related to these matters, accruals are based upon the best information available. For potential losses for which there is a reasonable possibility (meaning the likelihood is more than remote but less than probable) that a loss exists, the Company will disclose an estimate of the potential loss or range of such potential loss or include a statement that an estimate of the potential loss cannot be made. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation and

may

revise its estimates, which could materially impact its condensed consolidated financial statements.  Management does

not

believe that the outcome of any outstanding legal matters will have a material adverse effect on the Company's consolidated financial position, results of operations and cash flows.

XML

Note 12 - Related Party Transactions

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

12. Related Party Transactions

In

June 

2006,

the Company entered into a Development and Manufacturing Agreement (the “Agreement”) with Stellartech Research Corporation (“Stellartech”). The Agreement was amended on

October 

4,

2007.

Under the Agreement, the Company agreed to purchase

300

generators manufactured by Stellartech. As of

September 30, 2019,

the Company has purchased

855

units. The price per unit is variable and dependent on the volume and timing of units ordered. In conjunction with the Agreement, Stellartech purchased

375

shares of Viveve, Inc.’s common stock. Under the Agreement, the Company paid Stellartech approximately

$720,000

and

$3,015,000

for goods and services during the

three

months ended

September 30, 2019

and

2018,

respectively, and approximately

$3,853,000

and

$8,613,000

for the

nine

months ended

September 30, 2019

and

2018,

respectively. The amounts due to Stellartech for accounts payable as of

September 30, 2019

and

December 31, 2018

were approximately $

456,000

and

$960,000,

respectively.

XML

Note 5 - Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Schedule of Accrued Liabilities [Table Text Block]

	September 30,		December 31,
	2019		2018
Accrued bonuses	$	728	$	837
Accrued interest		704		683
Deferred revenue - subscription rental program		579		-
Accrued payroll and other related expenses		500		877
Accrued professional fees		494		978
Customer contracts liabilities		470		686
Accrued sales commission		423		1,743
Current operating lease liabilities		257		-
Accrued clinical trial costs		166		84
Travel and entertainment		54		280
Accrued sales & use tax		9		259
Other accruals		73		339
Total accrued liabilities	$	4,457	$	6,766

XML

Note 10 - Summary of Stock Options (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Share-based Payment Arrangement, Option, Activity [Table Text Block]

	Nine Months Ended September 30, 2019
						Weighted
				Weighted		Average
	Number			Average		Remaining		Aggregate
	of			Exercise		Contractual		Intrinsic
	Shares			Price		Term (years)		Value
Options outstanding, beginning of period		40,144		$	456.00		7.4	$	-
Options granted		23,344		$	117.91
Options exercised		-
Options canceled		(13,017	)	$	457.34
Options outstanding, end of period		50,471		$	298.99		8.3	$	-
Vested and exercisable and expected to vest, end of period		48,506		$	302.18		8.3	$	-
Vested and exercisable, end of period		21,169		$	397.45		7.4	$	-

Share-based Payment Arrangement, Option, Exercise Price Range [Table Text Block]

			Number		Weighted		Average		Number		Weighted
			Outstanding		Average		Remaining		Exercisable		Average
Range of			as of		Exercise		Contractual		as of		Exercise
Exercise Prices			September 30, 2019		Price		Term (Years)		September 30, 2019		Price
$38.00	-	$58.00		1,650	$	55.42		9.7		-	$	-
$100.00	-	$197.00		25,496	$	138.25		9.1		6,839	$	148.08
$202.00	-	$283.00		775	$	252.06		8.3		305	$	258.36
$311.00	-	$382.00		4,377	$	357.96		8.1		2,318	$	360.44
$430.00	-	$497.00		8,908	$	452.58		7.7		4,576	$	454.70
$501.00	-	$567.00		4,594	$	536.63		6.9		3,126	$	536.17
$600.00	-	$661.00		2,397	$	601.91		5.9		2,236	$	601.42
$700.00	-	$792.00		2,170	$	769.23		6.3		1,665	$	769.86
$992.00	-	$992.00		104	$	992.00		3.3		104	$	992.00
Total:				50,471	$	298.99		8.3		21,169	$	397.45

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2019		2018			2019			2018
Expected term (in years)		N/A		5			5			5
Average volatility		N/A		70	%		73	%		73	%
Risk-free interest rate		N/A		2.86	%		2.49	%		2.67	%
Dividend yield		N/A		0	%		0	%		0	%

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2019		2018			2019			2018
Expected term (in years)		N/A		10			5			10
Average volatility		N/A		66	%		73	%		66	%
Risk-free interest rate		N/A		3.04	%		2.49	%		3.04	%
Dividend yield		N/A		0	%		0	%		0	%

Share-based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Cost of revenue	$	25	$	19	$	91	$	47
Research and development		41		79		134		266
Selling, general and administrative		451		667		1,409		1,981
Total	$	517	$	765	$	1,634	$	2,294

2017 Employee Stock Purchase Plan [Member]

Notes Tables

Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions [Table Text Block]

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
Expected term (in years)		0.25			0.25			0.25			0.25
Average volatility		98	%		67	%		84	%		67	%
Risk-free interest rate		2.21	%		1.93	%		2.40	%		1.71	%
Dividend yield		0	%		0	%		0	%		0	%

XML

Note 10 - Summary of Stock Options - Valuation Assumptions for Stock Options (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Expected term (Year)		5 years	5 years	5 years
Average volatility		70.00%	73.00%	73.00%
Risk-free interest rate		2.86%	2.49%	2.67%
Dividend yield		0.00%	0.00%	0.00%
Nonemployees [Member]
Expected term (Year)		10 years	5 years	10 years
Average volatility		66.00%	73.00%	66.00%
Risk-free interest rate		3.04%	2.49%	3.04%
Dividend yield		0.00%	0.00%	0.00%

XML

Note 10 - Summary of Stock Options (Details Textual) - USD ($)	1 Months Ended						3 Months Ended				9 Months Ended		12 Months Ended
	Sep. 30, 2019	Jul. 31, 2019	Jun. 30, 2019	Apr. 30, 2019	Jan. 31, 2019	Jun. 30, 2018	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Jan. 01, 2019
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance	50,471						50,471				50,471		40,144
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance	$ 298.99						$ 298.99				$ 298.99		$ 456
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term											8 years 109 days		7 years 146 days
Stock Issued During Period, Shares, Restricted Stock Award, Gross						1,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance	3,432						3,432				3,432
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross											23,344
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate										0.00%	0.00%	0.00%
Share-based Payment Arrangement, Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate											0.00%
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total	$ 3,371,000						$ 3,371,000				$ 3,371,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition											2 years 73 days
Director [Member]
Stock Issued During Period, Shares, Restricted Stock Award, Gross		378		525
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period				525
Director [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value		$ 38.08		$ 91
Consultant [Member]
Stock Issued During Period, Shares, Restricted Stock Award, Gross			250
Nonemployees [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate										0.00%	0.00%	0.00%
The 2006 Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance	104						104				104
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	0						0				0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance	$ 992						$ 992				$ 992
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term											3 years 109 days
The 2013 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance	50,367						50,367				50,367
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance	$ 297.56						$ 297.56				$ 297.56
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term											8 years 109 days
Common Stock, Capital Shares Reserved for Future Issuance	11,770						11,770				11,770
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized					20,431
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized													49,140	69,571
Common Stock Shares Reserved For Future Issuance Percentage	18.00%						18.00%				18.00%
The 2013 Plan [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period					3,625
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period							421				443
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period											0
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures, Total											0
The 2013 Plan [Member] | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross										2,375	23,069	20,544
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value										$ 301.17	$ 117.86	$ 364.98
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period							0			0	0	0
The 2013 Plan [Member] | Nonemployees [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross							0			100	275	2,123
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value										$ 283	$ 121.82	$ 241.69
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period							0			0	0	0
The 2013 Plan [Member] | Underwritten Public Offering [Member]
Minimum Gross Proceeds From Equity Offering Amount Used In Calculation Of Reserved Shares Percentage	$ 5,000,000
2017 Employee Stock Purchase Plan [Member]
Stock Issued During Period, Shares, Employee Stock Purchase Plans							200	602	429
Shares Issued, Price Per Share	$ 3.75		$ 32.30				$ 3.75	$ 32.30	$ 79.88		$ 3.75
Employee Stock Ownership Plan (ESOP), Number of Suspense Shares	1,392						1,392				1,392
Employee Stock Ownership Plan (ESOP), Weighted Average Purchase Price of Shares Purchased							$ 13.16			$ 75	$ 2.12	$ 100
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate							0.00%			0.00%	0.00%	0.00%