13.	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

December 31, 2020,

there are outstanding stock option awards issued from the

2006

Plan covering a total of

shares of the Company's common stock and

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

$9,920.00

per share and the weighted average remaining contractual term is

2.1

years.

The

2013

Plan was also adopted by the Company's board of directors and approved by its stockholders. The

2013

Plan is administered by the compensation committee of the Company's board of directors (the “Administrator”). Under the

2013

Plan, the Company

may

grant equity awards to eligible participants which

may

take the form of stock options (both incentive stock options and non-qualified stock options), stock appreciation rights, restricted, deferred or unrestricted stock awards, performance-based awards or dividend equivalent rights. Awards

may

be granted to officers, employees, nonemployee directors (as defined in the

2013

Plan) and other key persons (including consultants and prospective employees). The term of any stock option award

may

not

exceed

years and

may

be subject to vesting conditions, as determined by the Administrator. Options granted generally vest over

four

years. Incentive stock options

may

be granted only to employees of the Company or any subsidiary that is a “subsidiary corporation” within the meaning of Section

424

(f) of the Internal Revenue Code. The exercise price of any stock option award cannot be less than the fair market value of the Company's common stock, provided, however, that an incentive stock option granted to an employee who owns more than

10%

of the Company's outstanding voting power must have an exercise price of

less than

110%

of the fair market value of the Company's common stock and a term that does

not

exceed

five

years.

August 22, 2016,

the Company's stockholders approved an amendment to the

2013

Plan to add an “evergreen” provision which will automatically increase annually, on the

first

day of each

January,

the maximum number of shares of common stock reserved and available under the

2013

plan (the “Stock Issuable”) by an amount equal to the lesser of (i) the number of shares that will increase the Stock Issuable by

of the total number of shares of common stock outstanding (on a fully diluted basis) or (ii) an amount determined by the board of directors.

January 2019,

the board of directors approved the

2019

evergreen provision increasing the total stock reserved for issuance under the

2013

Plan by

2,044

shares from

4,914

shares to a total of

6,958

shares, which was effective

January 1, 2019.

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: (

) 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 (

)

December 31, 2019.

Accordingly, the total stock reserved for issuance under the

2013

Plan increased to a total of

1,187,253

shares, which was effective

November 26, 2019.

January 2020,

the board of directors approved the

2020

evergreen provision increasing the total stock reserved for issuance under the

2013

Plan by

263,993

shares from

1,187,253

shares to a total of

1,451,246

shares, which was effective

January 1, 2020.

As of

December 31, 2020,

there are outstanding stock option awards issued from the

2013

Plan covering a total of

986,387

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

466,200

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

$18.98

per share, and the remaining contractual term is

8.9

years.

Activity under the

2006

Plan and the

2013

Plan is as follows:

	Year Ended December 31, 2020
						Weighted
				Weighted		Average
	Number			Average		Remaining		Aggregate
	of			Exercise		Contractual		Intrinsic
	Shares			Price		Term (years)		Value
Options outstanding, January 1, 2019		4,098		$	4,567.36		7.4	$	-
Options granted		1,006,602		$	11.42
Options exercised		-
Options canceled		(1,867	)	$	4,040.64
Options outstanding, December 31, 2019		1,008,833		$	22.47		9.9	$	3,928,715
Options granted		146,700		$	6.36
Options exercised		-
Options canceled		(169,134	)	$	28.45
Options outstanding, December 31, 2020		986,399		$	19.10		8.9	$	675

Vested and exercisable and expected to vest, December 31, 2020		923,646		$	19.77		8.9	$	598

Vested and exercisable, December 31, 2020		245,445		$	45.09		8.6	$	-

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

December 31, 2020.

The options outstanding and exercisable as of

December 31,

2020

are as follows:

							Weighted
			Number		Weighted		Average		Number		Weighted
			Outstanding		Average		Remaining		Exercisable		Average
Range of			as of		Exercise		Contractual		as of		Exercise
Exercise Prices			December 31, 2020		Price		Term (Years)		December 31, 2020		Price

$4.45	-	$8.91		967,288	$	8.32		8.9		238,900	$	8.69
$10.90	-	$13.60		15,500	$	12.64		9.2		3,750	$	13.60
$380.00	-	$580.00		125	$	552.00		8.4		113	$	567.61
$1,000.00	-	$1,970.00		1,954	$	1,426.46		7.6		1,334	$	1,437.21
$2,020.00	-	$2,830.00		74	$	2,501.22		7.0		53	$	2,520.19
$3,110.00	-	$3,580.00		189	$	3,439.26		7.6		156	$	3,455.90
$4,360.00	-	$4,970.00		619	$	4,549.77		6.2		510	$	4,554.04
$5,010.00	-	$5,670.00		300	$	5,366.00		6.2		285	$	5,356.84
$6,000.00	-	$6,000.00		138	$	6,000.00		5.0		138	$	6,000.00
$7,140.00	-	$7,920.00		200	$	7,679.20		4.1		194	$	7,676.29
$9,920.00	-	$9,920.00		12	$	9,920.00		2.1		12	$	9,920.00
Total:				986,399	$	19.10		8.9		245,445	$	45.09

Deferred Restricted Stock Awards

As of

December 31, 2020,

there are

234

shares of unvested restricted stock outstanding that have been granted pursuant to deferred restricted stock awards (“RSAs”).

During the year ended

December 31, 2020,

RSAs for shares of common stock under the

2013

Plan were granted by the Company.

June 2020,

the Company issued

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

June 2018.

July 2019,

the Company issued

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

$380.80

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

shares of common stock were issued.

June 2019,

the Company issued

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

June 2018.

April 2019,

the Company issued

shares of common stock under the

2013

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

$910.00

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

shares of common stock were issued.

January 2019,

the Company granted RSAs for

384

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 year ended

December 31, 2020,

a total of

shares pursuant to these RSAs were cancelled. During the year ended

December 31, 2019,

a total of

132

shares pursuant to these RSAs were cancelled. As of

December 31, 2020,

zero

shares were vested and issued.

2017

Employee Stock Purchase Plan

August 2017,

the stockholders approved the Company's

2017

Employee Stock Purchase Plan (the

“2017

ESPP”). Eligible employees

may

purchase shares of common stock through periodic payroll deductions, with a maximum purchase of

200

shares of common stock in any offering period. The price of common stock purchased under the

2017

ESPP is equal to

85%

of the lesser of the fair market value of common stock on the

first

or last day of the offering period. Each offering period is for a period of

three

months. In

September 2020,

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

2017

ESPP following the

twelfth

offering period and the ESPP purchase on

September 30, 2020.

During the years ended

December 31,

2020

and

2019,

the Company's

2017

ESPP issued

shares and

154

shares, respectively, for aggregate offering proceeds of approximately

$1,000

and

$56,000,

respectively.

The Company estimated the fair value of purchase rights under the ESPP using the Black-Scholes option valuation model and the straight-line attribution approach.

As of

December 31, 2020,

the remaining shares available for issuance under the

2017

ESPP were

shares.

Stock-Based Compensation

During the years ended

December 31,

2020

and

2019,

the Company granted stock options to employees and nonemployees to purchase

146,700

and

1,006,602

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

$4.08

and

$7.23

per share, respectively. There were

stock options exercised by employees and nonemployees during the years ended

December 31, 2020

and

2019.

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:

	Year Ended
	December 31,
	2020			2019

Expected term (in years)		5			6
Average volatility		82	%		70	%
Risk-free interest rate		0.37	%		1.62	%
Dividend yield		-			-

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 stock options represents the weighted average period the stock options are expected to remain outstanding and is based on the history of exercises and cancellations on all past option grants made by the Company, the contractual term, the vesting period and the expected remaining term of the outstanding options. The risk-free interest rate is based on the U.S. Treasury interest rates whose term is consistent with the expected life of the stock options.

dividend yield is included as the Company has

not

issued any dividends and does

not

anticipate issuing any dividends in the future.

The following table shows stock-based compensation expense included in the consolidated statements of operations for the years ended

December 31, 2020

and

2019

(in thousands):

	Year Ended
	December 31,
	2020		2019

Cost of revenue	$	208	$	135
Research and development		325		192
Selling, general and administrative		2,118		2,073
Total	$	2,651	$	2,400

As of

December 31,

2020,

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

$4,781,000.

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

2.5

years.