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.

2019

Public Offering and CRG Debt Conversion

November 2019,

the Company closed an underwritten public offering of units (the

“November 2019

Offering”) for gross proceeds of approximately

$11,500,000,

which included the full exercise of the underwriter's overallotment option to purchase additional shares and warrants. The net proceeds to the Company, after deducting underwriting discounts and commissions and other offering expenses and payable by the Company, were approximately

$9,922,000.

The offering comprised of: (

) Class A Units, priced at a public offering price of

$1.55

per unit, with each unit consisting of

one

share of common stock, a Series A warrant to purchase

one

share of common stock at an exercise price of

$1.55

per share that expires on the

first

anniversary of the date of issuance and a Series B warrant to purchase

one

share of common stock at an exercise price of

$1.55

per share that expires on the

fifth

anniversary of the issuance; and (

) Class B Units, priced at a public offering price of

$1.55

per unit, with each unit consisting of

one

share of Series A convertible preferred stock, convertible into

one

share of common stock, a Series A warrant to purchase

one

share of common stock at an exercise price of

$1.55

per share that expires on the

first

anniversary of the date of issuance and a Series B warrant to purchase

one

share of common stock at an exercise price of

$1.55

per share that expires on the

fifth

anniversary of the issuance.

The securities comprising the units were immediately separable and were issued separately.

A total of

1,945,943

shares of common stock,

5,473,410

shares of Series A convertible preferred stock, Series A warrants to purchase up to

7,419,353

shares of common stock, and Series B warrants to purchase up to

7,419,353

shares of common stock were issued in the offering, including the full exercise of the over-allotment option.

November

and

December 2019,

the holders of Series A preferred stock converted

600,000

shares and

3,021,237

shares into common stock, respectively. In

January

and

February 2020,

the holders of Series A convertible preferred stock converted

1,183,151

shares and

669,022

shares into common stock, respectively. As of

March 31, 2020,

all Series A convertible preferred stock had been converted into common stock and there are

remaining shares of Series A preferred stock outstanding.

February 2020,

a total of

1,026,240

shares of common stock were issued in connection with the exercise of Series A warrants for gross proceeds of approximately

$1,591,000.

February 2020,

a total of

45,473

shares of common stock were issued in connection with the exercise of Series B warrants for gross proceeds of approximately

$70,000.

As of

March 31, 2020,

there are Series A warrants to purchase a total of

6,393,113

shares of common stock and Series B warrants to purchase a total of

7,373,800

shares of common stock still remaining and outstanding.

In connection with the closing of the

November 2019

Offering, the Company’s secured lender, affiliates of CRG LP (“CRG”), converted approximately

$28,981,000

of the outstanding principal amount under its term loan with CRG (plus accrued interest, the prepayment premium and the back-end facility fee applicable thereto), for an aggregate amount of converted debt obligations of approximately

$31,300,000,

into

31,300

shares of the newly authorized Series B convertible preferred stock and issued warrants to purchase up to

9,893,776

shares of common stock (see Note

– Note Payable). These warrants have a term of

years and an exercise price equal to

120%

of the Series B convertible preferred stock conversion price of

$1.53

$1.836

per share. CRG also entered into a

one

year lock up agreement on all securities that it holds.

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-

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 year ended

December 31, 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.

During the

three

months ended

March 31, 2020

and

2019,

the Company sold

zero

shares of common stock under the

November 2017

ATM Facility. As of

March 31, 2020,

the Company had

remaining capacity to issue shares under the

August 2019

ATM Facility.

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

-Q and Article

of Regulation S-

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

-K for the year ended

December 31, 2019,

which was filed with the Securities and Exchange Commission on

March 19, 2020.

The results of operations for the

three

months ended

March 31, 2020

are

not

necessarily indicative of the results for the year ending

December

31,

2020

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

March 31, 2020,

the Company had an accumulated deficit of

$204,221,000,

cash and cash equivalents of

$9,042,000

and working capital of

$12,399,000.

Additionally, the Company used

$5,736,000

in cash for operations in the

three

months ended

March 31, 2020.

The Company will require additional cash funding to fund operations through

May 2021.

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

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

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

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.