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Spartan Stores’ internal controls were designed by, or under the supervision of, the Chief Executive Officer and Chief Financial Officer, and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of its financial reporting and the preparation and presentation of the consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Spartan Stores; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of Spartan Stores are being made only in accordance with authorizations of management and directors of Spartan Stores; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Spartan Stores’ assets that could have a material effect on the financial statements. |
Spartan Stores’ internal controls were designed by, or under the supervision of, the Chief Executive Officer and Chief Financial Officer, and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of its financial reporting and the preparation and presentation of the consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Spartan Stores; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of Spartan Stores are being made only in accordance with authorizations of management and directors of Spartan Stores; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Spartan Stores’ assets that could have a material effect on the financial statements. |
Spartan Stores' internal controls were designed by, or under the supervision of, the Chief Executive Officer and Chief Financial Officer, and effected by the Company's Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of its financial reporting and the preparation and presentation of the consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Spartan Stores; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of Spartan Stores are being made only in accordance with authorizations of management and directors of Spartan Stores; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Spartan Stores' assets that could have a material effect on the financial statements. |
Spartan Stores' internal controls were designed by, or under the supervision of, the Chief Executive Officer and Chief Financial Officer, and effected by the Company's Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of its financial reporting and the preparation and presentation of the consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Spartan Stores; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of Spartan Stores are being made only in accordance with authorizations of management and directors of Spartan Stores; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Spartan Stores' assets that could have a material effect on the financial statements. |
The net increase in SG&A is due primarily to the following: • Incremental operating costs associated with the acquired retail stores of $42.0 million, including approximately $0.6 million of training and other start-up related costs, and also including $1.3 million of costs for grand re-openings of five remodeled stores and one relocated store • Increases in other compensation and benefits of $6.2 million due to increased sales volume and the absence of a $1.3 million insurance reserve adjustment recorded in the prior year • Increased store labor of $2.9 million primarily due to increases in volume, including costs associated with grand re-openings of five remodeled stores and one replacement store • The cost of operating additional fuel centers of $2.5 million • Increased transportation fuel costs of $1.1 million • Increased depreciation and amortization of $0.9 million The increased SG&A expenses were partially offset by reduced operating costs due to the closure of two supermarkets near the end of the prior year first quarter of $1.1 million. |
The net increase in SG&A is due primarily to the following: • Incremental expenses associated with the acquired stores of $56.4 million, including $1.1 million of training and other start-up related costs related to the D&W acquisition in the first quarter • Increased compensation and benefits of $14.5 million, including increases driven by increased sales volume and inflation, incentive compensation, stock compensation and a union contract signing bonus • Incremental expenses associated with the extra week in fiscal 2007 of $2.1 million • The costs of operating additional fuel centers of $1.4 million • Increased fuel costs of $0.7 million • A contract termination fee received in the prior year of $0.6 million The increased SG&A expenses were partially offset by a reduction in expenses due to the closure of two stores in the first quarter of fiscal 2007 totaling $3.4 million and a reduction in legal and professional fees associated with the conclusion of the review of strategic alternatives and a contract dispute resolution in fiscal 2006 of $1.4 million. |
Spartan Stores' internal controls were designed by, or under the supervision of, the Chief Executive Officer and Chief Financial Officer, and effected by the Company's Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of its financial reporting and the preparation and presentation of the consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Spartan Stores; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of Spartan Stores are being made only in accordance with authorizations of management and directors of Spartan Stores; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Spartan Stores' assets that could have a material effect on the financial statements. |
The net increase in SG&A is due primarily to the following: • Incremental expenses associated with the acquired stores of $56.4 million, including $1.1 million of training and other start-up related costs related to the D&W acquisition in the first quarter • Increased compensation and benefits of $13.0 million, including increases driven by increased sales volume and inflation, incentive compensation, stock compensation and a union contract signing bonus • Incremental expenses associated with the extra week in fiscal 2007 of $2.3 million • The costs of operating additional fuel centers of $1.4 million • Increased fuel costs of $0.7 million • A contract termination fee received in the prior year of $0.6 million • Reduction in expenses due to the closure of two stores in the first quarter and two stores in the prior year totaling $4.3 million • Reduction in legal and professional fees associated with the conclusion of the review of strategic alternatives and a contract dispute resolution in the prior year of $1.4 million Provision for Asset Impairments and Exit Costs. |
The decrease in SG&A is due primarily to the following: • The sale of a single-store joint venture which had SG&A expenses of $4.2 million • Reduced store labor costs of $2.5 million due to productivity improvements and $1.2 million due to lower sales • Lower advertising expenses of $1.0 million • The closure of two The Pharm stores which decreased SG&A by $0.8 million • Reduced Michigan Single Business Tax of $0.9 million at the Distribution segment primarily due to the favorable conclusion of an audit • Reduced depreciation and amortization of $0.7 million primarily due to the completion of depreciable lives on a large number of acquisition-related store assets purchased more than five years ago • A contract termination payment received of $0.6 million These decreases are largely offset by the following: • Increased utilities expense of $1.9 million • Legal and professional fees associated with the conclusion of the review of strategic alternatives and a contract dispute resolution of $1.4 million • The termination and penalty payments received in the prior year from a former Distribution customer of $1.3 million • Increases in compensation and benefits of $1.0 million due to increases in sales volume at the Distribution segment • The costs of operating additional fuel centers of $1.0 million • Increased transportation fuel costs of $1.0 million • Increased credit card fees of $0.7 million Provision for Asset Impairments and Exit Costs. |
Spartan Stores' internal controls were designed by, or under the supervision of, the Chief Executive Officer and Chief Financial Officer, and effected by the Company's Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of its financial reporting and the preparation and presentation of the consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Spartan Stores; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of Spartan Stores are being made only in accordance with authorizations of management and directors of Spartan Stores; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Spartan Stores' assets that could have a material effect on the financial statements. |
The decrease in SG&A is due primarily to the following: • The sale of a single-store joint venture which had SG&A expenses of $4.2 million • Reduced store labor costs of $2.5 million due to productivity improvements and $1.2 million due to lower sales • Lower advertising expenses of $1.0 million • The closure of two The Pharm stores which decreased SG&A by $0.8 million • Reduced Michigan Single Business Tax of $0.9 million at the Distribution segment primarily due to the favorable conclusion of an audit • Reduced depreciation and amortization of $0.7 million primarily due to the completion of depreciable lives on a large number of acquisition-related store assets purchased more than five years ago • A contract termination payment received of $0.6 million These decreases are largely offset by the following: • Increased utilities expense of $1.9 million • Legal and professional fees associated with the conclusion of the review of strategic alternatives and a contract dispute resolution of $1.4 million • The termination and penalty payments received in the prior year from a former Distribution customer of $1.3 million • Increases in compensation and benefits of $1.0 million due to increases in sales volume at the Distribution segment • The costs of operating additional fuel centers of $1.0 million • Increased transportation fuel costs of $1.0 million • Increased credit card fees of $0.7 million Provision for Asset Impairments and Exit Costs. |
The decrease in SG&A is due to the following: • Reduced depreciation and amortization of $5.2 million, primarily at the Retail segment due to the completion of depreciable lives on a large number of acquisition-related store assets purchased more than five years ago • Reduced labor costs of $5.0 million at the Retail segment driven primarily by operating efficiencies • Reduced bad debt expense due to improved collection systems and procedures and recoveries of $0.8 million • Receipt of termination and penalty payments from a former Distribution customer of $1.3 million • A non-recurring $1.4 million charge in the fiscal 2004's first quarter related to the retirement distribution to the former Chief Executive Officer • Severance costs of $1.4 million associated with corporate staff reductions in fiscal 2004 These decreases are partially offset by increases in employee benefit and transportation costs, including the reinstatement of service credits for the cash balance pension plan during fiscal 2005 and increased fuel costs in our Distribution segment. |
Spartan Stores' internal controls were designed by, or under the supervision of, the Chief Executive Officer and Chief Financial Officer, and effected by the Company's Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of its financial reporting and the preparation and presentation of the consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Spartan Stores; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of Spartan Stores are being made only in accordance with authorizations of management and directors of Spartan Stores; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Spartan Stores' assets that could have a material effect on the financial statements. |
The decrease in SG&A is due to the following: • Reduced depreciation and amortization of $5.2 million, primarily at the Retail segment due to the completion of depreciable lives on a large number of acquisition-related store assets purchased more than five years ago • Reduced labor costs of $5.0 million at the Retail segment driven primarily by operating efficiencies • Reduced bad debt expense due to improved collection systems and procedures and recoveries of $0.8 million • Receipt of termination and penalty payments from a former Grocery Distribution customer of $1.3 million • A non-recurring $1.4 million charge in the fiscal 2004's first quarter related to the retirement distribution to the former Chief Executive Officer • Severance costs of $1.4 million associated with corporate staff reductions in fiscal 2004 These decreases are partially offset by increases in employee benefit and transportation costs, including the reinstatement of service credits for the cash balance pension plan during fiscal 2005 and increased fuel costs in our Grocery Distribution segment. |
Spartan Stores' internal controls were designed to provide reasonable assurance as to the reliability of its financial reporting and the preparation and presentation of the consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Spartan Stores; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of Spartan Stores are being made only in accordance with authorizations of management and directors of Spartan Stores; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Spartan Stores' assets that could have a material effect on the financial statements. |
CONSOLIDATED STATEMENTS OF CASH FLOWS Spartan Stores, Inc. and Subsidiaries (In thousands) CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued) (In thousands) Cash flows from financing activities Net proceeds (payments) from revolver 108,801 (300 ) 13,000 Proceeds from long-term borrowings 15,000 - 4,017 Repayment of long-term debt (121,637 ) (43,448 ) (37,941 ) Financing fees paid (9,086 ) (4,488 ) (1,242 ) Proceeds from sale of common stock - Common stock purchased - - (33 ) Net cash used in financing activities (6,922 ) (47,570 ) (21,393 ) Discontinued operations: Net cash provided by (used in) discontinued operations (20,988 ) 33,840 (15,686 ) Net (decrease) increase in cash and cash equivalents (10,627 ) (4,648 ) 6,377 Cash and cash equivalents at beginning of year 23,306 27,954 21,577 Cash and cash equivalents at end of year $ 12,679 $ 23,306 $ 27,954 Supplemental Cash Flow Information: Cash paid for interest $ 19,415 $ 24,783 $ 25,558 Cash paid for income taxes $ $ $ See notes to consolidated financial statements. |
(In thousands, except per share data) Year Ended March 29, March 30, March 31, March 25, March 27, Statements of Operations Data: Net sales $ 2,148,067 $ 2,270,019 $ 2,360,912 $ 2,238,597 $ 1,958,152 Cost of goods sold 1,774,350 1,865,334 1,980,797 1,917,851 1,760,456 Gross margin 373,717 404,685 380,115 320,746 197,696 Selling, general and administrative expenses 360,786 369,637 337,722 291,795 181,379 Provision for asset impairments and exit costs (A) 47,711 1,030 1,098 (2,914 ) 5,698 Operating (loss) earnings (34,780 ) 34,018 41,295 31,865 10,619 Interest expense, net 17,429 16,393 17,694 14,941 3,933 Other gains, net (135 ) (1,351 ) (297 ) (3,315 ) (20 ) (Loss) earnings before income taxes, discontinued operations, extraordinary item, and cumulative effect of a change in accounting principle (52,074 ) 18,976 23,898 20,239 6,706 Income taxes (18,087 ) 6,222 9,177 7,548 2,468 (Loss) earnings from continuing operations (33,987 ) 12,754 14,721 12,691 4,238 (Loss) earnings from discontinued operations, net of taxes (B) (52,968 ) (2,907 ) 8,721 4,503 11,592 Extraordinary item, net of taxes - - - (1,031 ) Cumulative effect of a change in accounting principle, net of taxes (C) (35,377 ) - - - - Net (loss) earnings $ (122,332 ) $ 9,847 $ 23,442 $ 17,194 $ 14,799 Basic weighted average shares outstanding (D) 19,896 19,549 17,333 13,432 14,508 (Loss) earnings from continuing operations per share $ (1.71 ) $ 0.65 $ 0.85 $ 0.94 $ 0.29 Basic (loss) earnings per share (6.15 ) 0.50 1.35 1.28 1.02 Cash dividends per share - - 0.0125 0.05 0.05 Balance Sheet Data: Total assets $ 556,306 $ 760,591 $ 801,543 $ 568,555 $ 521,546 Property and equipment, net 120,072 266,423 285,988 178,591 158,348 Working capital 88,507 115,631 82,199 91,574 103,285 Long-term obligations 204,019 304,920 315,203 266,071 277,126 Shareholders' equity 109,632 231,492 218,413 126,007 121,062 (A) See Note 4 to Consolidated Financial Statements (B) See Note 3 to Consolidated Financial Statements (C) See Note 2 to Consolidated Financial Statements (D) See Note 13 to Consolidated Financial Statements Item 7. |
Estimated amortization expense for each of the five succeeding fiscal years is as follows: SPARTAN STORES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Note 7 Marketable Securities The amortized cost and estimated fair value of marketable securities available-for-sale is shown below: Amortized Cost Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value (In thousands) As of March 29, 2003: U.S. Treasury securities and obligations of U.S. Government, corporations and agencies $ 1,463 $ $ - $ 1,582 Debt securities issued by foreign governments, corporations and agencies - Total $ 1,577 $ $ - $ 1,705 As of March 30, 2002: U.S. Treasury securities and obligations of U.S. Government, corporations and agencies $ 4,474 $ - $ $ 4,307 Debt securities issued by foreign governments, corporations and agencies 5,951 6,063 Total $ 10,425 $ $ $ 10,370 The amortized cost of marketable securities as of March 29, 2003 by contractual maturity, is shown below: (In thousands) Due within one year $ - Due after one year through five years Due after five years through ten years Due after ten years 1,365 $ 1,577 Actual maturities may differ from contractual maturities due to the exercise of prepayment options. |
SPARTAN STORES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The following table sets forth, for each of the last three fiscal years, segment information: SPARTAN STORES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (In thousands) Depreciation and amortization (excluding amortization of debt issuance costs) Retail grocery $ 29,982 $ 20,080 $ 10,925 Grocery distribution 13,248 13,934 14,559 Convenience distribution 2,066 2,471 2,663 Real estate 1,433 1,503 2,394 Total $ 46,729 $ 37,988 $ 30,541 SPARTAN STORES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (In thousands) Total assets Retail grocery $ 498,783 $ 455,049 $ 203,270 Grocery distribution 908,901 588,117 426,340 Convenience distribution 82,824 83,297 80,949 Real estate 44,187 56,951 63,374 Discontinued operations -- Insurance segment 23,729 31,068 28,987 Less -- eliminations (811,884 ) (412,939 ) (234,365 ) Total $ 746,540 $ 801,543 $ 568,555 SPARTAN STORES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Note 15 Quarterly Financial Information (unaudited) Earnings per share amounts for each quarter are required to be computed independently and may not equal the amount computed for the total year. |
June 20, 2001 By:/s/ Alex J. DeYonker* Alex J. DeYonker Director June 20, 2001 By:/s/ Elson S. Floyd, Ph.D.* Elson S. Floyd, Ph.D. Director June 20, 2001 By:/s/ Richard B. Iott* Richard B. Iott Director June 20, 2001 By:/s/ Joel A. Levine* Joel A. Levine Director June 20, 2001 By:/s/ James B. Meyer* James B. Meyer Director June 20, 2000 By:/s/ Elizabeth A. Nickels* Elizabeth A. Nickels Director June 20, 2001 By:/s/ Russell H. VanGilder, Jr.* Russell H. VanGilder, Jr. Director June 20, 2001 By:/s/ David M. Staples David M. Staples Executive Vice President and Chief Financial Officer June 20, 2001 By:/s/ James B. Meyer James B. Meyer Attorney-in-Fact SCHEDULE II SPARTAN STORES, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS (A) Represents the allowances acquired through acquisitions (B) Represents the write-off of uncollectible accounts EXHIBIT INDEX Exhibit Number Document 2.1 Agreement and Plan of Merger dated as of April 6, 2000, by and between Spartan Stores, Inc., Spartan Acquisition Corp. and Seaway Food Town, Inc. |
Stellartech also granted (i) an exclusive (even as to Stellartech), nontransferable, worldwide, royalty-free license within the Field under those certain intellectual property rights licensed to Stellartech pursuant to a development and supply agreement between Stellartech and Thermage, dated October 1, 1997 (the “Thermage Technology”), to use any elements of the Thermage Technology incorporated into the Stellartech Products, solely for the use, sale, offer for sale, importation and distribution within the Field; (ii) upon our satisfaction of the Minimum Commitment and the expiration of the Stellartech Agreement, an exclusive, nontransferable, worldwide, royalty-free, fully-paid license within the Field under Stellartech’s license rights in the Thermage Technology to use any elements of the Thermage Technology which are incorporated into the Stellartech Products to make and have made Stellartech Products in the Field; and (iii) the exclusive right within the Field to prosecute infringers of the portion of Stellartech’s Thermage Technology rights exclusively licensed to us. |
These include: ● product listing and establishment registration, which helps facilitate regulatory inspections and other regulatory action; ● submission of Unique Device Identifiers (UDIs) or the equivalent to regulatory authorities; ● Good Manufacturing Practice (GMP) and Quality System Regulations (QSRs), which require those who design, manufacture, package, label, store, install, and service devices to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of these processes; ● labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses to both physician and consumers; ● regulations governing our interactions with healthcare practitioners; ● U.S. export control and sanctions regulations associated with the export and reexport of the products; ● complaint handling and adverse event reporting requirements, such as the Medical Device Reporting (MDR), regulations in the U.S., which require that a manufacturer report to the FDA if its device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur; ● post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device; ● regulations pertaining to recalls and notices of corrections or removals; and ● any other post-market requirements that the FDA or foreign regulatory bodies might impose as part of the device approval or clearance process. |
Any future failure by us or one of our suppliers to comply with applicable statutes and regulations administered by the FDA and other regulatory bodies, or the failure to timely and adequately respond to any adverse inspectional observations or product safety issues, could result in, among other things, any of the following enforcement actions and unanticipated expenditures to address or defend such actions: ● untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; ● customer notifications for repair, replacement or refunds; ● recall, detention or seizure of our products; ● operating restrictions or partial suspension or total shutdown of production; ● refusing or delaying our requests for 510(k) clearance, de novo classification, or premarket approval of new products or modified products; ● operating restrictions; ● reclassifying a device that previously received a 510(k) clearance or withdrawing a PMA approval that was previously granted; ● refusal to grant export approval for our product; or ● criminal prosecution. |
Our reliance on these suppliers subjects us to a number of risks that could harm our business, including: ● interruption of supply resulting from modifications to or discontinuation of a supplier’s operations; ● delays in product shipments resulting from uncorrected defects, reliability issues or a supplier’s variation in a component; ● a lack of long-term supply arrangements for key components with our suppliers; ● inability to obtain adequate supply in a timely manner, or to obtain adequate supply on commercially reasonable terms; ● difficulty locating and qualifying alternative suppliers for our components in a timely manner; ● production delays related to the evaluation and testing of products from alternative suppliers, and corresponding regulatory qualifications; ● delay in delivery due to suppliers prioritizing other customer orders over our orders; ● damage to our brand reputation caused by defective components produced by our suppliers; ● increased cost of our warranty program due to product repair or replacement based upon defects in components produced by our suppliers; and ● fluctuation in delivery by our suppliers due to changes in demand from us or from their other customers. |
The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following: ● actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; ● changes in the market’s expectations about our operating results; ● success of competitors; ● our operating results failing to meet the expectations of securities analysts or investors in a particular period; ● changes in financial estimates and recommendations by securities analysts concerning our business, the market for our products, the health services industry, or the healthcare and health insurance industries in general; ● operating and stock price performance of other companies that investors deem comparable to us; ● our ability to market new and enhanced products on a timely basis; ● changes in laws and regulations affecting our business; ● commencement of, or involvement in, litigation involving us; ● changes in our capital structure, such as future issuances of securities or the incurrence of debt; ● the volume of shares of our common stock available for public sale; ● any major change in our board of directors or management; ● sales of substantial amounts of common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and ● general economic and political conditions such as recessions, fluctuations in interest rates and international currency fluctuations. |
Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive officer and principal accounting and financial officer and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that: ● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; ● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and ● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. |
The employment agreement further provides that if Mr. Durbin’s employment is terminated by us without cause or Mr. Durbin terminates his employment with us for good reason, he will be entitled to receive: (i) base salary continuation for 12 months following termination, (ii) any earned but unpaid incentive compensation with respect to any completed calendar year period, (iii) if Mr. Durbin was participating in the Company’s group health plan immediately prior to the date of termination, a monthly cash payment in an amount equal to the employer portion of his monthly health insurance premium until the earliest of 12 months following the date of termination, the expiration of his continuation coverage under COBRA or the date he becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment, and (iv) accelerated vesting of all stock options and other stock-based awards held by Mr. Durbin that would have vested had he remained employed for an additional six months following termination. |
In lieu of the severance payments and benefits set forth in the preceding sentence, in the event Mr. Durbin’s employment is terminated by us without cause or he terminates his employment with us for good reason, in either case within 12 months following a change in control (as defined in his employment agreement), he will be entitled to receive: (i) a lump sum cash amount equal to 1.5 times the sum of (A) his current base salary (prior to any reduction triggering good reason, if applicable, or his base salary in effect prior to the change in control if higher) plus (B) Mr. Durbin’s target annual cash incentive compensation for the year of termination, (ii) if Mr. Durbin was participating in the Company’s group health plan immediately prior to the date of termination, a monthly cash payment in an amount equal to the employer portion of his monthly health insurance premium until the earliest of 18 months following the date of termination, the expiration of his continuation coverage under COBRA or the date he becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment, and (iii) except as otherwise provided in the applicable award agreement, accelerated vesting of all stock options and other stock-based awards subject to time-based vesting held by Mr. Durbin as of the date of termination. |
The employment agreement further provides that if Mr. Robbins’ employment is terminated by us without cause or Mr. Robbins terminates his employment with us for good reason, he will be entitled to receive: (i) base salary continuation for six months following termination, (ii) any earned but unpaid incentive compensation with respect to any completed calendar year period, (iii) if Mr. Robbins was participating in the Company’s group health plan immediately prior to the date of termination, a monthly cash payment in an amount equal to the employer portion of his monthly health insurance premium until the earliest of six months following the date of termination, the expiration of his continuation coverage under COBRA or the date he becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment, and (iv) accelerated vesting of all stock options and other stock-based awards held by Mr. Robbins that would have vested had he remained employed for an additional six months following termination. |
In lieu of the severance payments and benefits set forth in the preceding sentence, in the event Mr. Robbins’ employment is terminated by us without cause or he terminates his employment with us for good reason, in either case within 12 months following a change in control (as defined in his employment agreement), he will be entitled to receive: (i) a lump sum cash amount equal to .75 times the sum of (A) his current base salary (prior to any reduction triggering good reason, if applicable, or his base salary in effect prior to the change in control if higher) plus (B) Mr. Robbins’ target annual cash incentive compensation for the year of termination, (ii) if Mr. Robbins was participating in the Company’s group health plan immediately prior to the date of termination, a monthly cash payment in an amount equal to the employer portion of his monthly health insurance premium until the earliest of six months following the date of termination, the expiration of his continuation coverage under COBRA or the date he becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment, and (iii) except as otherwise provided in the applicable award agreement, accelerated vesting of all stock options and other stock-based awards subject to time-based vesting held by Mr. Robbins as of the date of termination. |
Description 2.1 Agreement and Plan of Merger dated May 9, 2014 by and among Viveve, Inc., PLC Systems, Inc. and PLC Systems Acquisition Corporation (1) 2.1.1 Amendment to Agreement and Plan of Merger (1) 2.2 RenalGuard Reorganization Agreement (2) 3.1 Certificate of Conversion for Delaware (3) 3.2 Amended and Restated Certificate of Incorporation (4) 3.3 Articles of Amendment to the Articles of Continuance of Viveve Medical, Inc. (5) 3.4 Certificate of Amendment to the Amended and Restated Certificate of Incorporation (6) 3.5 Certificate of Amendment to the Amended and Restated Certificate of Incorporation dated November 30, 2020 (33) 3.6 Certificate of Elimination of Series A Preferred Stock (34) 3.7 Certificate of Designation of Preferences, Rights and Limitations of Series B Preferred Stock (7) 3.8 Form of Certificate of Designation of Preferences, Rights and Limitations of Series C Preferred Stock (35) 3.9 Amended and Restated Bylaws (4) 4.1 Common Stock Purchase Warrant issued on February 17, 2015 to Scott Durbin (8) + 4.2 Common Stock Purchase Warrant issued on February 17, 2015 to Jim Robbins (8) + 4.3 Common Stock Purchase Warrant issued on February 17, 2015 to Patricia Scheller (8) + 4.4 Common Stock Purchase Warrant issued on May 12, 2015 to James Atkinson (8) + 4.5 Common Stock Purchase Warrant issued on December 16, 2015 to James Atkinson (8) + 4.6 Common Stock Purchase Warrant issued on December 16, 2015 to Jim Robbins (8) + 4.7 Common Stock Purchase Warrant issued on April 1, 2016 to Dynamic Medical Technologies (Hong Kong) Limited (3) 4.8 Common Stock Purchase Warrant issued on May 11, 2016 to Theresa Stern (9) 4.9 Common Stock Purchase Warrant issued on May 11, 2016 to Chris Rowan (9) 4.10 Common Stock Purchase Warrant issued on June 20, 2016 to Western Alliance Bank (10) 4.11 Common Stock Purchase Warrant, dated May 25, 2017, by and between the Registrant and CRG Partners III - Parallel Fund "A" L.P. (11) 4.12 Common Stock Purchase Warrant, dated May 25, 2017, by and between the Registrant and CRG Partners III L.P. (11) 4.13 Form of Series A/B Common Stock Purchase Warrant issued on November 26, 2019 (7) 4.14 Form of Series A-2/B-2 Common Stock Purchase Warrant issued on April 20, 2020 (30) 4.15 Form of Common Stock Purchase Warrant issued to affiliates of CRG LP on November 26, 2019 (7) 4.16 Form of Common Stock Purchase Warrant for the 2021 Warrants (35) 4.17 Warrant Agent Agreement by and between VStock Transfer LLC and the Registrant (7) 4.18 Form of Warrant Agent Agreement by and between VStock Transfer LLC and the Registrant, effective January 2021 (35) 4.19 Specimen Common Stock Certificate (12) 4.20 Description of Securities* 10.1 Intellectual Property Assignment and License Agreement dated February 10, 2006, as amended, between Dr. Edward Knowlton and TivaMed, Inc (13) 10.2 Amended and Restated Development and Manufacturing Agreement dated October 4, 2007 between TivaMed, Inc. and Stellartech Research Corporation (13) 10.3 Sublease Agreement, entered into on February 1, 2017 and effective as of January 26, 2017, between the Registrant and Ingredion Incorporated (16) 10.4 Settlement and License Agreement by and among the Registrant, ThermiGen LLC and ThermiAesthetics LLC, dated June 3, 2018. |
VIVEVE MEDICAL, INC. (Registrant) March 18, 2021 By: /s/ Scott Durbin Scott Durbin Chief Executive Officer POWER OF ATTORNEY We, the undersigned officers and directors of Viveve Medical, Inc., hereby severally constitute and appoint Scott Durbin and Jim Robbins, and each of them singly (with full power to each of them to act alone), our true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution in each of them for him or her and, place and stead, and in any and all capacities, to sign conformed for us and in our names in the capacities indicated below any and all signatures and amendments to this report, and to file the same, with all exhibits thereto filing date and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as full to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. |
Signature Title Date /s/Scott Durbin Chief Executive Officer and Director Scott Durbin (Principal Executive Officer) March 18, 2021 /s/Jim Robbins Senior Vice President of Finance and Administration Jim Robbins (Principal Accounting and Financial Officer) March 18, 2021 /s/Steven Basta Steven Basta Chairman of the Board of Directors March 18, 2021 /s/Debora Jorn Debora Jorn Director March 18, 2021 /s/Arlene Morris Arlene Morris Director March 18, 2021 /s/Sharon Collins Presnell Sharon Collins Presnell Director March 18, 2021 VIVEVE MEDICAL, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report Of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors of Viveve Medical, Inc. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Viveve Medical, Inc. and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the “consolidated financial statements”). |
Pursuant to the amendment, CRG shall consent to the payment of such interest in the form of PIK loans, provided that (i) as of such payment date, no default shall have occurred and be continuing, and (ii) the principal amount of each PIK loan shall accrue interest in accordance with the provisions of the 2017 Loan Agreement; ● modified certain of the covenants, including (i) to permit issuance of the Series B convertible preferred stock and any preferred stock issued in the equity financing and the exercise and performance by the Company of its rights and obligations in connection with such CRG preferred stock and any preferred stock issued in the equity financing, (ii) eliminate the Company’s ability to enter into permitted acquisitions, (iii) further restrict the incurrence of additional indebtedness and removal of the equity cure right, and (iv) eliminate the minimum revenue requirement; and ● the back-end facility fee on the aggregate remaining principal balance on the term loan shall be increased from 5% to 25%. |
Stellartech also granted (i) an exclusive (even as to Stellartech), nontransferable, worldwide, royalty-free license within the Field under those certain intellectual property rights licensed to Stellartech pursuant to a development and supply agreement between Stellartech and Thermage, dated October 1, 1997 (the “Thermage Technology”), to use any elements of the Thermage Technology incorporated into the Stellartech Products, solely for the use, sale, offer for sale, importation and distribution within the Field; (ii) upon our satisfaction of the Minimum Commitment and the expiration of the Stellartech Agreement, an exclusive, nontransferable, worldwide, royalty-free, fully-paid license within the Field under Stellartech’s license rights in the Thermage Technology to use any elements of the Thermage Technology which are incorporated into the Stellartech Products to make and have made Stellartech Products in the Field; and (iii) the exclusive right within the Field to prosecute infringers of the portion of Stellartech’s Thermage Technology rights exclusively licensed to us. |
These include: ● product listing and establishment registration, which helps facilitate regulatory inspections and other regulatory action; ● submission of Unique Device Identifiers (UDIs) or the equivalent to regulatory authorities; ● Good Manufacturing Practice (GMP) and Quality System Regulations (QSRs), which require those who design, manufacture, package, label, store, install, and service devices to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of these processes; ● labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses to both physician and consumers; ● regulations governing our interactions with healthcare practitioners; ● U.S. export control and sanctions regulations associated with the export and reexport of the products; ● complaint handling and adverse event reporting requirements, such as the Medical Device Reporting (MDR), regulations in the U.S., which require that a manufacturer report to the FDA if its device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur; ● post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device; ● regulations pertaining to recalls and notices of corrections or removals; and ● any other post-market requirements that the FDA or foreign regulatory bodies might impose as part of the device approval or clearance process. |
Our reliance on these suppliers subjects us to a number of risks that could harm our business, including: ● interruption of supply resulting from modifications to or discontinuation of a supplier’s operations; ● delays in product shipments resulting from uncorrected defects, reliability issues or a supplier’s variation in a component; ● a lack of long-term supply arrangements for key components with our suppliers; ● inability to obtain adequate supply in a timely manner, or to obtain adequate supply on commercially reasonable terms; ● difficulty locating and qualifying alternative suppliers for our components in a timely manner; ● production delays related to the evaluation and testing of products from alternative suppliers, and corresponding regulatory qualifications; ● delay in delivery due to suppliers prioritizing other customer orders over our orders; ● damage to our brand reputation caused by defective components produced by our suppliers; ● increased cost of our warranty program due to product repair or replacement based upon defects in components produced by our suppliers; and ● fluctuation in delivery by our suppliers due to changes in demand from us or from their other customers. |
Any future failure by us or one of our suppliers to comply with applicable statutes and regulations administered by the FDA and other regulatory bodies, or the failure to timely and adequately respond to any adverse inspectional observations or product safety issues, could result in, among other things, any of the following enforcement actions and unanticipated expenditures to address or defend such actions: ● untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; ● customer notifications for repair, replacement or refunds; ● recall, detention or seizure of our products; ● operating restrictions or partial suspension or total shutdown of production; ● refusing or delaying our requests for 510(k) clearance, de novo classification, or premarket approval of new products or modified products; ● operating restrictions; ● reclassifying a device that previously received a 510(k) clearance or withdrawing a PMA approval that was previously granted; ● refusal to grant export approval for our product; or ● criminal prosecution. |
The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following: ● actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; ● changes in the market’s expectations about our operating results; ● success of competitors; ● our operating results failing to meet the expectations of securities analysts or investors in a particular period; ● changes in financial estimates and recommendations by securities analysts concerning our business, the market for our products, the health services industry, or the healthcare and health insurance industries in general; ● operating and stock price performance of other companies that investors deem comparable to us; ● our ability to market new and enhanced products on a timely basis; ● changes in laws and regulations affecting our business; ● commencement of, or involvement in, litigation involving us; ● changes in our capital structure, such as future issuances of securities or the incurrence of debt; ● the volume of shares of our common stock available for public sale; ● any major change in our board of directors or management; ● sales of substantial amounts of common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and ● general economic and political conditions such as recessions, fluctuations in interest rates and international currency fluctuations. |
The employment agreement further provides that if Mr. Durbin’s employment is terminated by us without cause or Mr. Durbin terminates his employment with us for good reason, he will be entitled to receive: (i) base salary continuation for 12 months following termination, (ii) any earned but unpaid incentive compensation with respect to any completed calendar year period, (iii) if Mr. Durbin was participating in the Company’s group health plan immediately prior to the date of termination, a monthly cash payment in an amount equal to the employer portion of his monthly health insurance premium until the earliest of 12 months following the date of termination, the expiration of his continuation coverage under COBRA or the date he becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment, and (iv) accelerated vesting of all stock options and other stock-based awards held by Mr. Durbin that would have vested had he remained employed for an additional six months following termination. |
In lieu of the severance payments and benefits set forth in the preceding sentence, in the event Mr. Durbin’s employment is terminated by us without cause or he terminates his employment with us for good reason, in either case within 12 months following a change in control (as defined in his employment agreement), he will be entitled to receive: (i) a lump sum cash amount equal to 1.5 times the sum of (A) his current base salary (prior to any reduction triggering good reason, if applicable, or his base salary in effect prior to the change in control if higher) plus (B) Mr. Durbin’s target annual cash incentive compensation for the year of termination, (ii) if Mr. Durbin was participating in the Company’s group health plan immediately prior to the date of termination, a monthly cash payment in an amount equal to the employer portion of his monthly health insurance premium until the earliest of 18 months following the date of termination, the expiration of his continuation coverage under COBRA or the date he becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment, and (iii) except as otherwise provided in the applicable award agreement, accelerated vesting of all stock options and other stock-based awards subject to time-based vesting held by Mr. Durbin as of the date of termination. |
The employment agreement further provides that if Mr. Robbins’ employment is terminated by us without cause or Mr. Robbins terminates his employment with us for good reason, he will be entitled to receive: (i) base salary continuation for six months following termination, (ii) any earned but unpaid incentive compensation with respect to any completed calendar year period, (iii) if Mr. Robbins was participating in the Company’s group health plan immediately prior to the date of termination, a monthly cash payment in an amount equal to the employer portion of his monthly health insurance premium until the earliest of six months following the date of termination, the expiration of his continuation coverage under COBRA or the date he becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment, and (iv) accelerated vesting of all stock options and other stock-based awards held by Mr. Robbins that would have vested had he remained employed for an additional six months following termination. |
In lieu of the severance payments and benefits set forth in the preceding sentence, in the event Mr. Robbins’ employment is terminated by us without cause or he terminates his employment with us for good reason, in either case within 12 months following a change in control (as defined in his employment agreement), he will be entitled to receive: (i) a lump sum cash amount equal to .75 times the sum of (A) his current base salary (prior to any reduction triggering good reason, if applicable, or his base salary in effect prior to the change in control if higher) plus (B) Mr. Robbins’ target annual cash incentive compensation for the year of termination, (ii) if Mr. Robbins was participating in the Company’s group health plan immediately prior to the date of termination, a monthly cash payment in an amount equal to the employer portion of his monthly health insurance premium until the earliest of six months following the date of termination, the expiration of his continuation coverage under COBRA or the date he becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment, and (iii) except as otherwise provided in the applicable award agreement, accelerated vesting of all stock options and other stock-based awards subject to time-based vesting held by Mr. Robbins as of the date of termination. |
In lieu of the severance payments and benefits set forth in the preceding sentence, in the event Mr. Shapiro’s employment is terminated by us without cause or he terminates his employment with us for good reason, in either case within 12 months following a change in control (as defined in his employment agreement), he will be entitled to receive: (i) a lump sum cash amount equal to .75 times the sum of (A) his current base salary (prior to any reduction triggering good reason, if applicable, or his base salary in effect prior to the change in control if higher) plus (B) Mr. Shapiro’s target annual cash incentive compensation for the year of termination, (ii) if Mr. Shapiro was participating in the Company’s group health plan immediately prior to the date of termination, a monthly cash payment in an amount equal to the employer portion of his monthly health insurance premium until the earliest of six months following the date of termination, the expiration of his continuation coverage under COBRA or the date he becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment, and (iii) except as otherwise provided in the applicable award agreement, accelerated vesting of all stock options and other stock-based awards subject to time-based vesting held by Mr. Shapiro as of the date of termination. |
Description 2.1 Agreement and Plan of Merger dated May 9, 2014 by and among Viveve, Inc., PLC Systems, Inc. and PLC Systems Acquisition Corporation (1) 2.1.1 Amendment to Agreement and Plan of Merger (1) 2.2 RenalGuard Reorganization Agreement (2) 3.1 Certificate of Conversion for Delaware (3) 3.2 Amended and Restated Certificate of Incorporation (4) 3.3 Articles of Amendment to the Articles of Continuance of Viveve Medical, Inc. (5) 3.4 Certificate of Amendment to the Amended and Restated Certificate of Incorporation (6) 3.5 Certificate of Designation of Preferences, Rights and Limitations of Series A Preferred Stock (7) 3.6 Certificate of Designation of Preferences, Rights and Limitations of Series B Preferred Stock (7) 3.7 Amended and Restated Bylaws (4) 4.1 Common Stock Purchase Warrant issued on February 17, 2015 to Scott Durbin (8)+ 4.2 Common Stock Purchase Warrant issued on February 17, 2015 to Jim Robbins (8)+ 4.3 Common Stock Purchase Warrant issued on February 17, 2015 to Patricia Scheller (8)+ 4.4 Common Stock Purchase Warrant issued on May 12, 2015 to James Atkinson (8)+ 4.5 Common Stock Purchase Warrant issued on December 16, 2015 to James Atkinson (8)+ 4.6 Common Stock Purchase Warrant issued on December 16, 2015 to Jim Robbins (8)+ 4.7 Common Stock Purchase Warrant issued on April 1, 2016 to Dynamic Medical Technologies (Hong Kong) Limited (3) 4.8 Common Stock Purchase Warrant issued on May 11, 2016 to Theresa Stern (9) 4.9 Common Stock Purchase Warrant issued on May 11, 2016 to Chris Rowan (9) 4.10 Common Stock Purchase Warrant issued on June 20, 2016 to Western Alliance Bank (10) 4.11 Common Stock Purchase Warrant, dated May 25, 2017, by and between the Registrant and CRG Partners III - Parallel Fund "A" L.P. (11) 4.12 Common Stock Purchase Warrant, dated May 25, 2017, by and between the Registrant and CRG Partners III L.P. (11) 4.13 Form of Series A/B Common Stock Purchase Warrant issued on November 26, 2019 (7) 4.14 Form of Common Stock Purchase Warrant issued to affiliates of CRG LP on November 26, 2019 (7) 4.15 Warrant Agent Agreement by and between VStock Transfer LLC and the Registrant (7) 4.16 Specimen Common Stock Certificate (12) 4.17 Description of Securities* 10.1 Intellectual Property Assignment and License Agreement dated February 10, 2006, as amended, between Dr. Edward Knowlton and TivaMed, Inc (13) 10.2 Amended and Restated Development and Manufacturing Agreement dated October 4, 2007 between TivaMed, Inc. and Stellartech Research Corporation (13) 10.3 Sublease Agreement, entered into on February 1, 2017 and effective as of January 26, 2017, between the Registrant and Ingredion Incorporated (16) 10.4 Settlement and License Agreement by and among the Registrant, ThermiGen LLC and ThermiAesthetics LLC, dated June 3, 2018. |
VIVEVE MEDICAL, INC. (Registrant) March 19, 2020 By: /s/ Scott Durbin Scott Durbin Chief Executive Officer POWER OF ATTORNEY We, the undersigned officers and directors of Viveve Medical, Inc., hereby severally constitute and appoint Scott Durbin and Jim Robbins, and each of them singly (with full power to each of them to act alone), our true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution in each of them for him or her and, place and stead, and in any and all capacities, to sign conformed for us and in our names in the capacities indicated below any and all signatures and amendments to this report, and to file the same, with all exhibits thereto filing date and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as full to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. |
Signature Title Date /s/Scott Durbin Chief Executive Officer and Director Scott Durbin (Principal Executive Officer) March 19, 2020 /s/Jim Robbins Vice President of Finance and Administration Jim Robbins (Principal Accounting and Financial Officer) March 19, 2020 /s/Steven Basta Steven Basta Chairman of the Board of Directors March 19, 2020 /s/Debora Jorn Debora Jorn Director March 19, 2020 /s/Arlene Morris Arlene Morris Director March 19, 2020 /s/Karen Zaderej Karen Zaderej Director March 19, 2020 VIVEVE MEDICAL, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors of Viveve Medical, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Viveve Medical, Inc. (a Delaware corporation) and its subsidiaries (the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit), and cash flows for each of the two years in the period ended December 31, 2019, and the related notes (collectively referred to as the “consolidated financial statements”). |
Pursuant to the amendment, CRG shall consent to the payment of such interest in the form of PIK loans, provided that (i) as of such payment date, no default shall have occurred and be continuing, and (ii) the principal amount of each PIK loan shall accrue interest in accordance with the provisions of the 2017 Loan Agreement; ● modified certain of the covenants, including (i) to permit issuance of the Series B convertible preferred stock and any preferred stock issued in the equity financing and the exercise and performance by the Company of its rights and obligations in connection with such CRG preferred stock and any preferred stock issued in the equity financing, (ii) eliminate the Company’s ability to enter into permitted acquisitions, (iii) further restrict the incurrence of additional indebtedness and removal of the equity cure right, and (iv) eliminate the minimum revenue requirement; and ● the back-end facility fee on the aggregate remaining principal balance on the term loan shall be increased from 5% to 25%. |
Stellartech also granted (i) an exclusive (even as to Stellartech), nontransferable, worldwide, royalty-free license within the Field under those certain intellectual property rights licensed to Stellartech pursuant to a development and supply agreement between Stellartech and Thermage, dated October 1, 1997 (the “Thermage Technology”), to use any elements of the Thermage Technology incorporated into the Stellartech Products, solely for the use, sale, offer for sale, importation and distribution within the Field; (ii) upon our satisfaction of the Minimum Commitment and the expiration of the Stellartech Agreement, an exclusive, nontransferable, worldwide, royalty-free, fully-paid license within the Field under Stellartech’s license rights in the Thermage Technology to use any elements of the Thermage Technology which are incorporated into the Stellartech Products to make and have made Stellartech Products in the Field; and (iii) the exclusive right within the Field to prosecute infringers of the portion of Stellartech’s Thermage Technology rights exclusively licensed to us. |
These include: ● product listing and establishment registration, which helps facilitate regulatory inspections and other regulatory action; ● submission of Unique Device Identifiers (UDIs) or the equivalent to regulatory authorities; ● Good Manufacturing Practice (GMP) and Quality System Regulations (QSRs), which require those who design, manufacture, package, label, store, install, and service devices to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of these processes; ● labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses to both physician and consumers; ● regulations governing our interactions with healthcare practitioners; ● U.S. export control and sanctions regulations associated with the export and reexport of the products; ● complaint handling and adverse event reporting requirements, such as the Medical Device Reporting (MDR), regulations in the U.S., which require that a manufacturer report to the FDA if its device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur; ● post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device; ● regulations pertaining to recalls and notices of corrections or removals; and ● any other post-market requirements that the FDA or foreign regulatory bodies might impose as part of the device approval or clearance process. |
Our reliance on these suppliers subjects us to a number of risks that could harm our business, including: ● interruption of supply resulting from modifications to or discontinuation of a supplier’s operations; ● delays in product shipments resulting from uncorrected defects, reliability issues or a supplier’s variation in a component; ● a lack of long-term supply arrangements for key components with our suppliers; ● inability to obtain adequate supply in a timely manner, or to obtain adequate supply on commercially reasonable terms; ● difficulty locating and qualifying alternative suppliers for our components in a timely manner; ● production delays related to the evaluation and testing of products from alternative suppliers, and corresponding regulatory qualifications; ● delay in delivery due to suppliers prioritizing other customer orders over our orders; ● damage to our brand reputation caused by defective components produced by our suppliers; ● increased cost of our warranty program due to product repair or replacement based upon defects in components produced by our suppliers; and ● fluctuation in delivery by our suppliers due to changes in demand from us or from their other customers. |
Any future failure by us or one of our suppliers to comply with applicable statutes and regulations administered by the FDA and other regulatory bodies, or the failure to timely and adequately respond to any adverse inspectional observations or product safety issues, could result in, among other things, any of the following enforcement actions and unanticipated expenditures to address or defend such actions: ● untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; ● customer notifications for repair, replacement or refunds; ● recall, detention or seizure of our products; ● operating restrictions or partial suspension or total shutdown of production; ● refusing or delaying our requests for 510(k) clearance, de novo classification, or premarket approval of new products or modified products; ● operating restrictions; ● reclassifying a device that previously received a 510(k) clearance or withdrawing a PMA approval that was previously granted; ● refusal to grant export approval for our product; or ● criminal prosecution. |
The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following: ● actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; ● changes in the market’s expectations about our operating results; ● success of competitors; ● our operating results failing to meet the expectations of securities analysts or investors in a particular period; ● changes in financial estimates and recommendations by securities analysts concerning our business, the market for our products, the health services industry, or the healthcare and health insurance industries in general; ● operating and stock price performance of other companies that investors deem comparable to us; ● our ability to market new and enhanced products on a timely basis; ● changes in laws and regulations affecting our business; ● commencement of, or involvement in, litigation involving us; ● changes in our capital structure, such as future issuances of securities or the incurrence of debt; ● the volume of shares of our common stock available for public sale; ● any major change in our board of directors or management; ● sales of substantial amounts of common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and ● general economic and political conditions such as recessions, fluctuations in interest rates and international currency fluctuations. |
Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive officer and principal financial officer and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that: ● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; ● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and ● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. |
Description 2.1 Agreement and Plan of Merger dated May 9, 2014 by and among Viveve, Inc., PLC Systems, Inc. and PLC Systems Acquisition Corporation (1) 2.1.1 Amendment to Agreement and Plan of Merger (1) 2.2 RenalGuard Reorganization Agreement (2) 3.1 Certificate of Conversion for Delaware(3) 3.2 Amended and Restated Certificate of Incorporation(4) 3.3 Articles of Amendment to the Articles of Continuance of Viveve Medical, Inc. (5) 3.4 Amended and Restated Bylaws(4) 4.1 Common Stock Purchase Warrant issued on February 17, 2015 to Scott Durbin (6)+ 4.2 Common Stock Purchase Warrant issued on February 17, 2015 to Jim Robbins (6)+ 4.3 Common Stock Purchase Warrant issued on February 17, 2015 to Patricia Scheller (6)+ 4.4 Common Stock Purchase Warrant issued on May 12, 2015 to James Atkinson (6)+ 4.5 Common Stock Purchase Warrant issued on December 16, 2015 to James Atkinson (6)+ 4.6 Common Stock Purchase Warrant issued on December 16, 2015 to Jim Robbins (6)+ 4.7 Warrant to Purchase Common Stock issued on April 1, 2016 to Dynamic Medical Technologies (Hong Kong) Limited (3) 4.8 Warrant to Purchase Common Stock issued on May 11, 2016 to Theresa Stern (7) 4.9 Warrant to Purchase Common Stock issued on May 11, 2016 to Chris Rowan (7) 4.10 Warrant to Purchase Common Stock issued on June 20, 2016 to Western Alliance Bank (8) 4.11 Warrant to Purchase Shares of Common Stock of Viveve Medical, Inc., dated May 25, 2017, by and between Viveve Medical, Inc. and CRG Partners III - Parallel Fund "A" L.P. (9) 4.12 Warrant to Purchase Shares of Common Stock of Viveve Medical, Inc., dated May 25, 2017, by and between Viveve Medical, Inc. and CRG Partners III L.P. (9) 4.13 Specimen Common Stock Certificate (10) 10.1 Form of Securities Purchase Agreement dated May 9, 2014 (11) 10.2 Securities Purchase Agreement, dated May 9, 2014, by and among the Registrant and GBS Venture Partners as trustee for GBS BioVentures III Trust (11) 10.3 Escrow Deposit Agreement, dated May 9, 2014 by and among the Registrant, Palladium Capital Advisors LLC, Middlebury Securities and Signature Bank, as escrow agent (11) 10.4 Registration Rights Agreement, dated May 9, 2014 (11) 10.5 First Amendment to Registration Rights Agreement, dated February 19, 2015 (12) 10.6 Right to Shares Letter Agreement dated May 9, 2014 between the Registrant and GCP IV LLC (11) 10.7 Amendment dated September 10, 2014 to Securities Purchase Agreement dated February 22, 2013 (13) 10.8 Amendment dated September 11, 2014 to Securities Purchase Agreement dated February 22, 2013 (13) 10.9 PLC Systems Inc. 2013 Stock Option and Incentive Plan, as amended (14) + 10.10 Loan and Security Agreement dated September 30, 2014 between Viveve, Inc. and Square 1 Bank (16) 10.11 First Amendment to Loan and Security Agreement dated February 19, 2015 between Viveve, Inc. and Square 1 Bank (12) 10.12 Intellectual Property Security Agreement dated September 30, 2014 between Viveve, Inc. and Square 1 Bank (16) 10.13 Unconditional Guaranty issued by the Registrant in favor of Square 1 Bank (16) 10.14 Intellectual Property Assignment and License Agreement dated February 10, 2006, as amended, between Dr. Edward Knowlton and TivaMed, Inc (14) 10.15 Development and Manufacturing Agreement dated June 12, 2006 between TivaMed, Inc. and Stellartech Research Corporation (14) 10.16 Amended and Restated Development and Manufacturing Agreement dated October 4, 2007 between TivaMed, Inc. and Stellartech Research Corporation (14) 10.17 Right to Shares Letter Agreement, dated as of September 23, 2014 by and between the Registrant and GCP IV LLC (14) 10.18 Right to Shares Letter Agreement, dated as of September 23, 2014 by and between the Registrant and G-Ten Partners LLC (14) 10.19 Convertible Note Termination Agreement, dated May 9, 2014 by and between Viveve, Inc. and 5AM Ventures II, LP (17) 10.20 Convertible Note Termination Agreement, dated May 9, 2014 by and between Viveve, Inc. and 5AM Co-Investors II, LP (17) 10.21 Convertible Note Exchange Agreement, dated May 9, 2014 by and between Viveve, Inc. and GBS Venture Partners Limited, trustee for GBS BioVentures III (17) 10.22 Warrant Termination Agreement, dated as of May 9, 2014, by and between Viveve, Inc. and 5AM Ventures II, LP (17) 10.23 Warrant Termination Agreement, dated as of May 9, 2014, by and between Viveve, Inc. and 5AM Co-Investors II, LP (17) 10.24 Warrant Termination Agreement, dated as of May 9, 2014, by and between Viveve, Inc. and GBS Venture Partners Limited, trustee for GBS BioVentures III (17) 10.25 Employment Agreement by and between the Registrant and James G. Atkinson, dated February 27, 2018 (15)+ 10.26 First Amendment to Lease dated January 15, 2015 between The Castine Group and Viveve, Inc. (18) 10.27 Second Amendment to Loan and Security Agreement dated May 14, 2015 between Viveve, Inc. and Square 1 Bank (18) 10.28 Form of Securities Purchase Agreement dated May 12, 2015 (18) 10.29 Form of Registration Rights Agreement dated May 12, 2015 (18) 10.30 Letter Agreement with Stonepine Capital dated May 12, 2015 (18) 10.31 Form of Securities Purchase Agreement dated November 20, 2015 (19) 10.32 Form of Registration Rights Agreement dated November 20, 2015 (19) 10.33 Third Amendment to Loan and Security Agreement dated November 30, 2015 between Pacific Western Bank, as successor in interest by merger to Square 1 Bank, and Viveve, Inc. (20) 10.34 Fourth Amendment to Loan and Security Agreement dated March 18, 2016 between Pacific Western Bank, as successor in interest by merger to Square 1 Bank, and Viveve, Inc. (6) 10.35 Viveve Medical, Inc. |
(22) 10.38 Loan and Security Agreement dated as of June 20, 2016 by and among Viveve Medical, Inc., Viveve, Inc. and Western Alliance Bank (8) 10.39 Intellectual Property Security Agreement dated as of June 20, 2016 between Viveve Medical, Inc. and Western Alliance Bank (8) 10.40 Sublease Agreement, entered into on February 1, 2017 and effective as of January 26, 2017, between Viveve Medical, Inc. and Ingredion Incorporated (23) 10.41 Waiver and First Amendment to Loan and Security Agreement, dated January 13, 2017, between Viveve Medical, Inc., Viveve, Inc. and Western Alliance Bank (24) 10.42 Security Agreement, dated May 25, 2017, by and between Viveve Medical, Inc., Viveve, Inc. and CRG Servicing LLC (9) 10.43 Patent and Trademark Security Agreement, dated May 25, 2017, by and between Viveve Medical, Inc., Viveve, Inc. and CRG Servicing LLC (9) 10.44 Term Loan Agreement, dated May 22, 2017, among Viveve Medical, Inc., Viveve, Inc., CRG Servicing LLC, as administrative agent, and certain lenders (25) 10.45 Exclusive Distributorship Agreement, dated August 8. |
VIVEVE MEDICAL, INC. (Registrant) March 14, 2019 By: /s/ Scott Durbin Scott Durbin Chief Executive Officer POWER OF ATTORNEY We, the undersigned officers and directors of Viveve Medical, Inc., hereby severally constitute and appoint Patricia Scheller and Scott Durbin, and each of them singly (with full power to each of them to act alone), our true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution in each of them for him or her and, place and stead, and in any and all capacities, to sign conformed for us and in our names in the capacities indicated below any and all signatures and amendments to this report, and to file the same, with all exhibits thereto filing date and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as full to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. |
Signature Title Date /s/Scott Durbin Chief Executive Officer and Director Scott Durbin (Principal Executive Officer) March 14, 2019 /s/Jim Robbins Vice President of Finance and Administration Jim Robbins (Principal Accounting and Financial Officer) March 14, 2019 /s/Steven Basta Steven Basta Chairman of the Board of Directors March 14, 2019 /s/Debora Jorn Debora Jorn Director March 14, 2019 /s/Arlene Morris Arlene Morris Director March 14, 2019 /s/Patricia Scheller Patricia Scheller Director March 14, 2019 /s/Karen Zaderej Karen Zaderej Director March 14, 2019 VIVEVE MEDICAL, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors of Viveve Medical, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Viveve Medical, Inc. (a Delaware corporation) and its subsidiaries (the “Company”) as of December 31, 2018 and 2017, and the related consolidated statements of operations and comprehensive loss, stockholders’equity(deficit), and cash flows for each of the two years in the period ended December 31, 2018, and the related notes (collectively referred to as the “consolidated financial statements”). |
Stellartech also granted (i) an exclusive (even as to Stellartech), nontransferable, worldwide, royalty-free license within the Field under those certain intellectual property rights licensed to Stellartech pursuant to a development and supply agreement between Stellartech and Thermage, dated October 1, 1997 (the “Thermage Technology”), to use any elements of the Thermage Technology incorporated into the Stellartech Products, solely for the use, sale, offer for sale, importation and distribution within the Field; (ii) upon our satisfaction of the Minimum Commitment and the expiration of the Stellartech Agreement, an exclusive, nontransferable, worldwide, royalty-free, fully-paid license within the Field under Stellartech’s license rights in the Thermage Technology to use any elements of the Thermage Technology which are incorporated into the Stellartech Products to make and have made Stellartech Products in the Field; and (iii) the exclusive right within the Field to prosecute infringers of the portion of Stellartech’s Thermage Technology rights exclusively licensed to us. |
These include: ● product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action; ● submission of Unique Device Identifiers (“UDIs”) to the FDA; ● QSRs, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process; ● labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses to both physician and consumers; ● regulations governing our interactions with healthcare practitioners; ● U.S. export control and sanctions regulations associated with the export and reexport of the products; ● Medical Device Reporting (“MDR”), regulations, which require that a manufacturer report to the FDA if its device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur; ● post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device; ● regulations pertaining to voluntary recalls and notices of corrections or removals; and ● any other post-market requirements that FDA might impose as part of the device approval or clearance process. |
Our reliance on these suppliers subjects us to a number of risks that could harm our business, including: ● interruption of supply resulting from modifications to or discontinuation of a supplier’s operations; ● delays in product shipments resulting from uncorrected defects, reliability issues or a supplier’s variation in a component; ● a lack of long-term supply arrangements for key components with our suppliers; ● inability to obtain adequate supply in a timely manner, or to obtain adequate supply on commercially reasonable terms; ● difficulty locating and qualifying alternative suppliers for our components in a timely manner; ● production delays related to the evaluation and testing of products from alternative suppliers, and corresponding regulatory qualifications; ● delay in delivery due to suppliers prioritizing other customer orders over our orders; ● damage to our brand reputation caused by defective components produced by our suppliers; ● increased cost of our warranty program due to product repair or replacement based upon defects in components produced by our suppliers; and ● fluctuation in delivery by our suppliers due to changes in demand from us or from their other customers. |
Any future failure by us or one of our suppliers to comply with applicable statutes and regulations administered by the FDA and other regulatory bodies, or the failure to timely and adequately respond to any adverse inspectional observations or product safety issues, could result in, among other things, any of the following enforcement actions and unanticipated expenditures to address or defend such actions: ● untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; ● customer notifications for repair, replacement or refunds; ● recall, detention or seizure of our products; ● operating restrictions or partial suspension or total shutdown of production; ● refusing or delaying our requests for 510(k) clearance, de novo classification, or premarket approval of new products or modified products; ● operating restrictions; ● reclassifying a device that previously received a 510(k) clearance or withdrawing a PMA approval that was previously granted; ● refusal to grant export approval for our product; or ● criminal prosecution. |
The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following: ● actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; ● changes in the market’s expectations about our operating results; ● success of competitors; ● our operating results failing to meet the expectations of securities analysts or investors in a particular period; ● changes in financial estimates and recommendations by securities analysts concerning our business, the market for our products, the health services industry, or the healthcare and health insurance industries in general; ● operating and stock price performance of other companies that investors deem comparable to us; ● our ability to market new and enhanced products on a timely basis; ● changes in laws and regulations affecting our business; ● commencement of, or involvement in, litigation involving us; ● changes in our capital structure, such as future issuances of securities or the incurrence of debt; ● the volume of shares of our common stock available for public sale; ● any major change in our board of directors or management; ● sales of substantial amounts of common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and ● general economic and political conditions such as recessions, fluctuations in interest rates and international currency fluctuations. |
Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive officer and principal financial officer and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that: ● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; ● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and ● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. |
Description 2.1 Agreement and Plan of Merger dated May 9, 2014 by and among Viveve, Inc., PLC Systems, Inc. and PLC Systems Acquisition Corporation (1) 2.1.1 Amendment to Agreement and Plan of Merger (1) 2.2 RenalGuard Reorganization Agreement (2) 3.1 Certificate of Conversion for Delaware(3) 3.2 Amended and Restated Certificate of Incorporation(4) 3.3 Articles of Amendment to the Articles of Continuance of Viveve Medical, Inc. (5) 3.4 Amended and Restated Bylaws(4) 4.1 Common Stock Purchase Warrant issued on February 17, 2015 to Scott Durbin (6)+ 4.2 Common Stock Purchase Warrant issued on February 17, 2015 to Jim Robbins (6)+ 4.3 Common Stock Purchase Warrant issued on February 17, 2015 to Patricia Scheller (6)+ 4.4 Common Stock Purchase Warrant issued on May 12, 2015 to James Atkinson (6)+ 4.5 Common Stock Purchase Warrant issued on December 16, 2015 to James Atkinson (6)+ 4.6 Common Stock Purchase Warrant issued on December 16, 2015 to Jim Robbins (6)+ 4.7 Warrant to Purchase Common Stock issued on April 1, 2016 to Dynamic Medical Technologies (Hong Kong) Limited (3) 4.8 Warrant to Purchase Common Stock issued on May 11, 2016 to Theresa Stern (7) 4.9 Warrant to Purchase Common Stock issued on May 11, 2016 to Chris Rowan (7) 4.10 Warrant to Purchase Common Stock issued on June 20, 2016 to Western Alliance Bank (8) 4.11 Warrant to Purchase Shares of Common Stock of Viveve Medical, Inc., dated May 25, 2017, by and between Viveve Medical, Inc. and CRG Partners III - Parallel Fund "A" L.P. (9) 4.12 Warrant to Purchase Shares of Common Stock of Viveve Medical, Inc., dated May 25, 2017, by and between Viveve Medical, Inc. and CRG Partners III L.P. (9) 4.13 Specimen Common Stock Certificate (10) 10.1 Form of Securities Purchase Agreement dated May 9, 2014 (11) 10.2 Securities Purchase Agreement, dated May 9, 2014, by and among the Registrant and GBS Venture Partners as trustee for GBS BioVentures III Trust (11) 10.3 Escrow Deposit Agreement, dated May 9, 2014 by and among the Registrant, Palladium Capital Advisors LLC, Middlebury Securities and Signature Bank, as escrow agent (11) 10.4 Registration Rights Agreement, dated May 9, 2014 (11) 10.5 First Amendment to Registration Rights Agreement, dated February 19, 2015 (12) 10.6 Right to Shares Letter Agreement dated May 9, 2014 between the Registrant and GCP IV LLC (11) 10.7 Amendment dated September 10, 2014 to Securities Purchase Agreement dated February 22, 2013 (13) 10.8 Amendment dated September 11, 2014 to Securities Purchase Agreement dated February 22, 2013 (13) 10.9 PLC Systems Inc. 2013 Stock Option and Incentive Plan, as amended (14) + 10.10 Employment Agreement by and between the Registrant and Patricia K. Scheller, dated February 27, 2018 (15)+ 10.11 Employment Agreement by and between the Registrant and Scott C. Durbin, dated March 1, 2018 (15)+ 10.12 Loan and Security Agreement dated September 30, 2014 between Viveve, Inc. and Square 1 Bank (16) 10.13 First Amendment to Loan and Security Agreement dated February 19, 2015 between Viveve, Inc. and Square 1 Bank (12) 10.14 Intellectual Property Security Agreement dated September 30, 2014 between Viveve, Inc. and Square 1 Bank (16) 10.15 Unconditional Guaranty issued by the Registrant in favor of Square 1 Bank (16) 10.16 Intellectual Property Assignment and License Agreement dated February 10, 2006, as amended, between Dr. Edward Knowlton and TivaMed, Inc (14) 10.17 Development and Manufacturing Agreement dated June 12, 2006 between TivaMed, Inc. and Stellartech Research Corporation (14) 10.18 Amended and Restated Development and Manufacturing Agreement dated October 4, 2007 between TivaMed, Inc. and Stellartech Research Corporation (14) 10.19 Right to Shares Letter Agreement, dated as of September 23, 2014 by and between the Registrant and GCP IV LLC (14) 10.20 Right to Shares Letter Agreement, dated as of September 23, 2014 by and between the Registrant and G-Ten Partners LLC (14) 10.21 Convertible Note Termination Agreement, dated May 9, 2014 by and between Viveve, Inc. and 5AM Ventures II, LP (17) 10.22 Convertible Note Termination Agreement, dated May 9, 2014 by and between Viveve, Inc. and 5AM Co-Investors II, LP (17) 10.23 Convertible Note Exchange Agreement, dated May 9, 2014 by and between Viveve, Inc. and GBS Venture Partners Limited, trustee for GBS BioVentures III (17) 10.24 Warrant Termination Agreement, dated as of May 9, 2014, by and between Viveve, Inc. and 5AM Ventures II, LP (17) 10.25 Warrant Termination Agreement, dated as of May 9, 2014, by and between Viveve, Inc. and 5AM Co-Investors II, LP (17) 10.26 Warrant Termination Agreement, dated as of May 9, 2014, by and between Viveve, Inc. and GBS Venture Partners Limited, trustee for GBS BioVentures III (17) 10.27 Employment Agreement by and between the Registrant and James G. Atkinson, dated February 27, 2018 (15)+ 10.28 First Amendment to Lease dated January 15, 2015 between The Castine Group and Viveve, Inc. (18) 10.29 Second Amendment to Loan and Security Agreement dated May 14, 2015 between Viveve, Inc. and Square 1 Bank (18) 10.30 Form of Securities Purchase Agreement dated May 12, 2015 (18) 10.31 Form of Registration Rights Agreement dated May 12, 2015 (18) 10.32 Letter Agreement with Stonepine Capital dated May 12, 2015 (18) 10.33 Form of Securities Purchase Agreement dated November 20, 2015 (19) 10.34 Form of Registration Rights Agreement dated November 20, 2015 (19) 10.35 Third Amendment to Loan and Security Agreement dated November 30, 2015 between Pacific Western Bank, as successor in interest by merger to Square 1 Bank, and Viveve, Inc. (20) 10.36 Fourth Amendment to Loan and Security Agreement dated March 18, 2016 between Pacific Western Bank, as successor in interest by merger to Square 1 Bank, and Viveve, Inc. (6) 10.37 Viveve Medical, Inc. |
(22) 10.40 Loan and Security Agreement dated as of June 20, 2016 by and among Viveve Medical, Inc., Viveve, Inc. and Western Alliance Bank (8) 10.41 Intellectual Property Security Agreement dated as of June 20, 2016 between Viveve Medical, Inc. and Western Alliance Bank (8) 10.42 Sublease Agreement, entered into on February 1, 2017 and effective as of January 26, 2017, between Viveve Medical, Inc. and Ingredion Incorporated (23) 10.43 Waiver and First Amendment to Loan and Security Agreement, dated January 13, 2017, between Viveve Medical, Inc., Viveve, Inc. and Western Alliance Bank (24) 10.44 Security Agreement, dated May 25, 2017, by and between Viveve Medical, Inc., Viveve, Inc. and CRG Servicing LLC (9) 10.45 Patent and Trademark Security Agreement, dated May 25, 2017, by and between Viveve Medical, Inc., Viveve, Inc. and CRG Servicing LLC (9) 10.46 Term Loan Agreement, dated May 22, 2017, among Viveve Medical, Inc., Viveve, Inc., CRG Servicing LLC, as administrative agent, and certain lenders (25) 10.47 Exclusive Distributorship Agreement, dated August 8. |
VIVEVE MEDICAL, INC. (Registrant) March 15, 2018 By: /s/ Patricia Scheller Patricia Scheller Chief Executive Officer POWER OF ATTORNEY We, the undersigned officers and directors of Viveve Medical, Inc., hereby severally constitute and appoint Patricia Scheller and Scott Durbin, and each of them singly (with full power to each of them to act alone), our true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution in each of them for him or her and, place and stead, and in any and all capacities, to sign conformed for us and in our names in the capacities indicated below any and all signatures and amendments to this report, and to file the same, with all exhibits thereto filing date and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as full to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. |
Signature Title Date /s/Patricia Scheller Chief Executive Officer and Director Patricia Scheller (Principal Executive Officer) March 15, 2018 /s/Scott Durbin Chief Financial Officer Scott Durbin (Principal Financial and Accounting Officer) March 15, 2018 /s/Daniel Janney Daniel Janney Chairman of the Board of Directors March 15, 2018 /s/Debora Jorn Debora Jorn Director March 15, 2018 /s/Lori Bush Lori Bush Director March 15, 2018 /s/Arlene Morris Arlene Morris Director March 15, 2018 /s/Jon Plexico Jon Plexico Director March 15, 2018 VIVEVE MEDICAL, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors of Viveve Medical, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Viveve Medical, Inc. (a Delaware corporation) and its subsidiaries (the “Company”) as of December 31, 2017 and 2016, and the related consolidated statements of operations and comprehensive loss, stockholders’ deficit, and cash flows for each of the two years in the period ended December 31, 2017, and the related notes (collectively referred to as the “consolidated financial statements”). |
Stellartech also granted (i) an exclusive (even as to Stellartech), nontransferable, worldwide, royalty-free license within the Field under those certain intellectual property rights licensed to Stellartech pursuant to a development and supply agreement between Stellartech and Thermage, dated October 1, 1997 (the “Thermage Technology”), to use any elements of the Thermage Technology incorporated into the Stellartech Products, solely for the use, sale, offer for sale, importation and distribution within the Field; (ii) upon our satisfaction of the Minimum Commitment and the expiration of the Stellartech Agreement, an exclusive, nontransferable, worldwide, royalty-free, fully-paid license within the Field under Stellartech’s license rights in the Thermage Technology to use any elements of the Thermage Technology which are incorporated into the Stellartech Products to make and have made Stellartech Products in the Field; and (iii) the exclusive right within the Field to prosecute infringers of the portion of Stellartech’s Thermage Technology rights exclusively licensed to us. |
These include: ● product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action; ● Quality system regulations (“QSRs”), which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process; ● labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses to both physician and consumers; ● Medical Device Reporting (“MDR”), regulations, which require that a manufacturer report to the FDA if its device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur; ● post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device; ● regulations pertaining to voluntary recalls and notices of corrections or removals; and ● any other postmarket requirements that FDA might impose as part of the device approval or clearance process. |
Our reliance on these suppliers subjects us to a number of risks that could harm our business, including: ● interruption of supply resulting from modifications to or discontinuation of a supplier’s operations; ● delays in product shipments resulting from uncorrected defects, reliability issues or a supplier’s variation in a component; ● a lack of long-term supply arrangements for key components with our suppliers; ● inability to obtain adequate supply in a timely manner, or to obtain adequate supply on commercially reasonable terms; ● difficulty locating and qualifying alternative suppliers for our components in a timely manner; ● production delays related to the evaluation and testing of products from alternative suppliers, and corresponding regulatory qualifications; ● delay in delivery due to suppliers prioritizing other customer orders over our orders; ● damage to our brand reputation caused by defective components produced by our suppliers; ● increased cost of our warranty program due to product repair or replacement based upon defects in components produced by our suppliers; and ● fluctuation in delivery by our suppliers due to changes in demand from us or from their other customers. |
Any future failure by us or one of our suppliers to comply with applicable statutes and regulations administered by the FDA and other regulatory bodies, or the failure to timely and adequately respond to any adverse inspectional observations or product safety issues, could result in, among other things, any of the following enforcement actions and unanticipated expenditures to address or defend such actions: ● untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; ● customer notifications for repair, replacement or refunds; ● recall, detention or seizure of our products; ● operating restrictions or partial suspension or total shutdown of production; ● refusing or delaying our requests for 510(k) clearance, de novo classification, or premarket approval of new products or modified products; ● operating restrictions; ● reclassifying a device that previously received a 510(k) clearance or withdrawing a PMA approval that was previously granted; ● refusal to grant export approval for our product; or ● criminal prosecution. |
The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following: ● actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; ● changes in the market’s expectations about our operating results; ● success of competitors; ● our operating results failing to meet the expectations of securities analysts or investors in a particular period; ● changes in financial estimates and recommendations by securities analysts concerning our business, the market for our products, the health services industry, or the healthcare and health insurance industries in general; ● operating and stock price performance of other companies that investors deem comparable to us; ● our ability to market new and enhanced products on a timely basis; ● changes in laws and regulations affecting our business; ● commencement of, or involvement in, litigation involving us; ● changes in our capital structure, such as future issuances of securities or the incurrence of debt; ● the volume of shares of our common stock available for public sale; ● any major change in our board of directors or management; ● sales of substantial amounts of common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and ● general economic and political conditions such as recessions, fluctuations in interest rates and international currency fluctuations. |
Controls and Procedures Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive officer and principal financial officer and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that: ● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; ● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and ● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. |
Description 2.1 Agreement and Plan of Merger dated May 9, 2014 by and among Viveve, Inc., PLC Systems, Inc. and PLC Systems Acquisition Corporation (1) 2.1.1 Amendment to Agreement and Plan of Merger (1) 2.2 RenalGuard Reorganization Agreement (2) 3.1 Certificate of Conversion for Delaware(3) 3.2 Certificate of Incorporation(3) 3.3 Articles of Amendment to the Articles of Continuance of Viveve Medical, Inc.(4) 3.4 Bylaws(3) 4.1 Common Stock Purchase Warrant issued on February 17, 2015 to Scott Durbin(5)+ 4.2 Common Stock Purchase Warrant issued on February 17, 2015 to Jim Robbins(5)+ 4.3 Common Stock Purchase Warrant issued on February 17, 2015 to Patricia Scheller(5)+ 4.4 Common Stock Purchase Warrant issued on May 12, 2015 to James Atkinson(5)+ 4.5 Common Stock Purchase Warrant issued on December 16, 2015 to James Atkinson(5)+ 4.6 Common Stock Purchase Warrant issued on December 16, 2015 to Jim Robbins(5)+ 4.7 Warrant to Purchase Common Stock issued on April 1, 2016 to Dynamic Medical Technologies (Hong Kong) Limited(3) 4.8 Warrant to Purchase Common Stock issued on May 11, 2016 to Theresa Stern(6) 4.9 Warrant to Purchase Common Stock issued on May 11, 2016 to Chris Rowan(6) 4.10 Warrant to Purchase Common Stock issued on June 20, 2016 to Western Alliance Bank(7) 10.1 Form of Securities Purchase Agreement dated May 9, 2014 (8) 10.2 Securities Purchase Agreement, dated May 9, 2014, by and among the Registrant and GBS Venture Partners as trustee for GBS BioVentures III Trust (8) 10.3 Escrow Deposit Agreement, dated May 9, 2014 by and among the Registrant, Palladium Capital Advisors LLC, Middlebury Securities and Signature Bank, as escrow agent (8) 10.4 Registration Rights Agreement, dated May 9, 2014 (8) 10.5 First Amendment to Registration Rights Agreement, dated February 19, 2015 (9) 10.6 Right to Shares Letter Agreement dated May 9, 2014 between the Registrant and GCP IV LLC (8) 10.7 Amendment dated September 10, 2014 to Securities Purchase Agreement dated February 22, 2013 (10) 10.8 Amendment dated September 11, 2014 to Securities Purchase Agreement dated February 22, 2013 (10) 10.9 PLC Systems Inc. 2013 Stock Option and Incentive Plan, as amended (11) + 10.10 Offer of Employment dated May 14, 2012 from Viveve, Inc. to Patricia K. Scheller (12)+ 10.11 Offer of Employment dated January 23, 2013 from Viveve, Inc. to Scott C. Durbin (12)+ 10.12 Loan and Security Agreement dated September 30, 2014 between Viveve, Inc. and Square 1 Bank (13) 10.13 First Amendment to Loan and Security Agreement dated February 19, 2015 between Viveve, Inc. and Square 1 Bank (9) 10.14 Intellectual Property Security Agreement dated September 30, 2014 between Viveve, Inc. and Square 1 Bank (13) 10.15 Unconditional Guaranty issued by the Registrant in favor of Square 1 Bank (13) 10.16 Intellectual Property Assignment and License Agreement dated February 10, 2006, as amended, between Dr. Edward Knowlton and TivaMed, Inc (11) 10.17 Development and Manufacturing Agreement dated June 12, 2006 between TivaMed, Inc. and Stellartech Research Corporation (11) 10.18 Amended and Restated Development and Manufacturing Agreement dated October 4, 2007 between TivaMed, Inc. and Stellartech Research Corporation (11) 10.19 Right to Shares Letter Agreement, dated as of September 23, 2014 by and between the Registrant and GCP IV LLC (11) 10.20 Right to Shares Letter Agreement, dated as of September 23, 2014 by and between the Registrant and G-Ten Partners LLC (11) 10.21 Convertible Note Termination Agreement, dated May 9, 2014 by and between Viveve, Inc. and 5AM Ventures II, LP (14) 10.22 Convertible Note Termination Agreement, dated May 9, 2014 by and between Viveve, Inc. and 5AM Co-Investors II, LP (14) 10.23 Convertible Note Exchange Agreement, dated May 9, 2014 by and between Viveve, Inc. and GBS Venture Partners Limited, trustee for GBS BioVentures III (14) 10.24 Warrant Termination Agreement, dated as of May 9, 2014, by and between the Viveve, Inc. and 5AM Ventures II, LP (14) 10.25 Warrant Termination Agreement, dated as of May 9, 2014, by and between the Viveve, Inc. and 5AM Co-Investors II, LP (14) 10.26 Warrant Termination Agreement, dated as of May 9, 2014, by and between the Viveve, Inc. and GBS Venture Partners Limited, trustee for GBS BioVentures III (14) 10.27 Offer Letter to James G. Atkinson, dated February 4, 2015 (15)+ 10.28 First Amendment to Lease dated January 15, 2015 between The Castine Group and Viveve, Inc. (16) 10.29 Second Amendment to Loan and Security Agreement dated May 14, 2015 between Viveve, Inc. and Square 1 Bank (16) 10.30 Form of Securities Purchase Agreement dated May 12, 2015 (16) 10.31 Form of Registration Rights Agreement dated May 12, 2015 (16) 10.32 Letter Agreement with Stonepine Capital dated May 12, 2015 (16) 10.33 Form of Securities Purchase Agreement dated November 20, 2015 (17) 10.34 Form of Registration Rights Agreement dated November 20, 2015 (17) 10.35 Third Amendment to Loan and Security Agreement dated November 30, 2015 between Pacific Western Bank, as successor in interest by merger to Square 1 Bank, and Viveve, Inc. (18) 10.36 Fourth Amendment to Loan and Security Agreement dated March 18, 2016 between Pacific Western Bank, as successor in interest by merger to Square 1 Bank, and Viveve, Inc. (5) 10.37 Viveve Medical, Inc. |
VIVEVE MEDICAL, INC. (Registrant) February 16, 2017 By: /s/ Patricia Scheller Patricia Scheller Chief Executive Officer POWER OF ATTORNEY We, the undersigned officers and directors of Viveve Medical, Inc., hereby severally constitute and appoint Patricia Scheller and Scott Durbin, and each of them singly (with full power to each of them to act alone), our true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution in each of them for him or her and, place and stead, and in any and all capacities, to sign conformed for us and in our names in the capacities indicated below any and all signatures and amendments to this report, and to file the same, with all exhibits thereto filing date and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as full to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-infact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. |
Stellartech also granted (i) an exclusive (even as to Stellartech), nontransferable, worldwide, royalty-free license within the Field under those certain intellectual property rights licensed to Stellartech pursuant to a development and supply agreement between Stellartech and Thermage, dated October 1, 1997 (the “Thermage Technology”), to use any elements of the Thermage Technology incorporated into the Stellartech Products, solely for the use, sale, offer for sale, importation and distribution within the Field; (ii) upon our satisfaction of the Minimum Commitment and the expiration of the Stellartech Agreement, an exclusive, nontransferable, worldwide, royalty-free, fully-paid license within the Field under Stellartech’s license rights in the Thermage Technology to use any elements of the Thermage Technology which are incorporated into the Stellartech Products to make and have made Stellartech Products in the Field; and (iii) the exclusive right within the Field to prosecute infringers of the portion of Stellartech’s Thermage Technology rights exclusively licensed to us. |
These include: ● product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action; ● QSRs, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process; ● labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses; ● Medical Device Reporting (“MDR”), regulations, which require that a manufacturer report to the FDA if its device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur; ● post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device; and ● regulations pertaining to voluntary recalls and notices of corrections or removals. |
Our reliance on these suppliers subjects us to a number of risks that could harm our business, including: ● interruption of supply resulting from modifications to or discontinuation of a supplier’s operations; ● delays in product shipments resulting from uncorrected defects, reliability issues or a supplier’s variation in a component; ● a lack of long-term supply arrangements for key components with our suppliers; ● inability to obtain adequate supply in a timely manner, or to obtain adequate supply on commercially reasonable terms; ● difficulty locating and qualifying alternative suppliers for our components in a timely manner; ● production delays related to the evaluation and testing of products from alternative suppliers, and corresponding regulatory qualifications; ● delay in delivery due to suppliers prioritizing other customer orders over our orders; ● damage to our brand reputation caused by defective components produced by our suppliers; ● increased cost of our warranty program due to product repair or replacement based upon defects in components produced by our suppliers; and ● fluctuation in delivery by our suppliers due to changes in demand from us or from their other customers. |
The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following: actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; ● changes in the market’s expectations about our operating results; ● success of competitors; ● our operating results failing to meet the expectations of securities analysts or investors in a particular period; ● changes in financial estimates and recommendations by securities analysts concerning our business, the market for our products, the health services industry, or the healthcare and health insurance industries in general; ● operating and stock price performance of other companies that investors deem comparable to us; ● our ability to market new and enhanced products on a timely basis; ● changes in laws and regulations affecting our business; ● commencement of, or involvement in, litigation involving us; ● changes in our capital structure, such as future issuances of securities or the incurrence of debt; ● the volume of shares of our common stock available for public sale; ● any major change in our board of directors or management; ● sales of substantial amounts of common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and ● general economic and political conditions such as recessions, fluctuations in interest rates and international currency fluctuations. |
Controls and Procedures Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive officer and principal financial officer and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that: ● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; ● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and ● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. |
In addition the agreement provides for: (i) an annual incentive bonus (if approved by the board of directors, in their sole discretion) in an amount to be determined by the board of directors; (ii) an incentive payment of $1,000 for every $1 million in new equity financing raised during her first year of service, up to $20,000 (iii) an option for the purchase of 27,539,116 shares of Viveve, Inc. common stock exercisable at the fair market value on the date of grant, with the right to purchase 25% of the option shares vesting after 12 months of continuous service and the right to purchase the remainder of the option shares vesting in equal monthly installments over the next 36 months of continuous service, with accelerated vesting upon an Involuntary Termination within 12 months of a Change in Control (as those terms are defined in the agreement); (iv) Company-sponsored benefits as in effect from time to time; (v) paid vacation in accordance with our vacation policy, as in effect from time to time; and (vi) continued base salary and benefits for twelve months following an Involuntary Termination. |
In addition the agreement provides for: (i) an annual incentive bonus (if approved by the board of directors, in their sole discretion) in an amount to be determined by the board of directors; (ii) an incentive bonus of $50,000 in the event a minimum of $1.5 million is raised in equity financing from new investors; (iii) an option for the purchase of 10,258,690 shares of Viveve, Inc. common stock exercisable at the fair market value on the date of grant, with the right to purchase 100,000 option shares vesting on the grant date, 2,614,672 option shares vesting after 12 months of continuous service and the right to purchase the remainder of the option shares vesting in equal monthly installments over the next 36 months of continuous service, with accelerated vesting upon a Change in Control before Mr. Durbin’s service terminates; (iv) Company-sponsored benefits in effect from time to time; (v) paid vacation in accordance with our vacation policy, as in effect from time to time; and (vi) continued base salary and benefits for ten months following an Involuntary Termination. |
Alta BioEquities Management, LLC is the general partner of Alta BioEquities, L.P. Daniel Janney is the Managing Director of Alta BioEquities Management, LLC and has voting and investment power over the shares beneficially owned by Alta BioEquities, L.P. (9) Includes 18,397,682 shares of common stock owned of record by Stonepine Capital, L.P. Stonepine Capital Management, LLC is the general partner of Stonepine Capital, L.P. Jon M. Plexico and Timothy P. Lynch are the Managing Members of Stonepine Capital Management, LLC and have shared voting and investment power over the shares beneficially owned by Stonepine Capital, L.P. (10) Dr. John Diekman, Andrew J. Schwab and Dr. Scott M. Rocklage, the managing members of 5AM Partners II, LLC, have shared voting and investment power over the shares beneficially owned by 5AM Ventures II, L.P. As the managing members of 5AM Partners II, LLC, these individuals also have voting and investment power over 288,447 shares of common stock owned of record by 5AM Co-Investors II, L.P. 5AM Partners II, LLC is the general partner of both 5AM Ventures II, L.P. and 5AM Co-Investors II, L.P. (11) Included in this amount are 5,455,632 shares of common stock and a 10-year warrant to purchase 202,000 shares of common stock at an exercise price of $0.53 per share. |
2 (6) 4.1 Form of 5% Senior Secured Convertible Debenture issued on February 22, 2011, July 2, 2012, January 16, 2013, April 14, 2014, May 27, 2014, July 15, 2014 and August 6, 2014 (7) 4.2 Form of Common Stock Purchase Warrant issued on February 22, 2011, July 2, 2012, January 16, 2013, April 14, 2014, May 27, 2014, July 15, 2014 and August 6, 2014 (7) 4.3 Common Stock Purchase Warrant issued on September 23, 2014 to GBS Venture Partners Limited (8) 4.4 Conversion Agreement dated May 9, 2014 between the Registrant and holders of the Registrant’s 5% Senior Secured Convertible Debentures (8) 4.5 Warrant Exchange Agreement dated May 9, 2014 between the Registrant and certain holders of the Registrant’s warrants (8) 4.6 Form of Common Stock Purchase Warrant issued to investors in the private offering of the Registrant’s common stock which closed on September 23, 2014 (8) 4.7 Warrant to Purchase Stock issued September 30, 2014 to Square 1 Bank (9) 4.8 First Amendment to Warrant to Purchase Stock dated February 19, 2015 between Viveve, Inc. and Square 1 Bank (14) 4.9 Common Stock Purchase Warrant (2015) (16) 4.10 Amended and Restated Warrant to Purchase Stock dated May 14, 2015 between Square 1 Financial, Inc. and Viveve, Inc. (16) 4.11 Second Warrant to Purchase Stock issued May 14, 2015 to Square 1 Bank (16) 4.12 Common Stock Purchase Warrant issued on February 17, 2015 to Scott Durbin*+ 4.13 Common Stock Purchase Warrant issued on February 17, 2015 to Jim Robbins*+ 4.14 Common Stock Purchase Warrant issued on February 17, 2015 to Patricia Scheller*+ 4.15 Common Stock Purchase Warrant issued on May 12, 2015 to James Atkinson*+ 4.16 Common Stock Purchase Warrant issued on December 16, 2015 to James Atkinson*+ 4.17 Common Stock Purchase Warrant issued on December 16, 2015 to Jim Robbins*+ 10.1 Financial Advisory Agreement dated May 9, 2014 between the Registrant and Bezalel Partners, LLC (8) 10.2 Form of Securities Purchase Agreement dated May 9, 2014 (8) 10.3 Securities Purchase Agreement, dated May 9, 2014, by and among the Registrant and GBS Venture Partners as trustee for GBS BioVentures III Trust (8) 10.4 Escrow Deposit Agreement, dated May 9, 2014 by and among the Registrant, Palladium Capital Advisors LLC, Middlebury Securities and Signature Bank, as escrow agent (8) 10.5 Registration Rights Agreement, dated May 9, 2014 (8) 10.6 First Amendment to Registration Rights Agreement, dated February 19, 2015 (14) 10.7 Right to Shares Letter Agreement dated May 9, 2014 between the Registrant and GCP IV LLC (8) 10.8 Promissory Note in the principal amount of $250,000 issued to GCP IV LLC on September 2, 2014 (11) 10.9 Form of Debenture Amendment Agreement dated September 2, 2014 (11) 10.10 Amendment dated September 10, 2014 to Securities Purchase Agreement dated February 22, 2013 (12) 10.11 Amendment dated September 11, 2014 to Securities Purchase Agreement dated February 22, 2013 (12) 10.12 PLC Systems Inc. 2013 Stock Option and Incentive Plan, as amended (6) 10.13 Offer of Employment dated May 14, 2012 from Viveve, Inc. to Patricia K. Scheller (4)+ 10.14 Offer of Employment dated January 23, 2013 from Viveve, Inc. to Scott C. Durbin (4)+ 10.15 Loan and Security Agreement dated September 30, 2014 between Viveve, Inc. and Square 1 Bank (9) 10.16 First Amendment to Loan and Security Agreement dated February 19, 2015 between Viveve, Inc. and Square 1 Bank (14) 10.17 Intellectual Property Security Agreement dated September 30, 2014 between Viveve, Inc. and Square 1 Bank (9) 10.18 Unconditional Guaranty issued by the Registrant in favor of Square 1 Bank (9) 10.19 Intellectual Property Assignment and License Agreement dated February 10, 2006, as amended, between Dr. Edward Knowlton and TivaMed, Inc (6) 10.20 Development and Manufacturing Agreement dated June 12, 2006 between TivaMed, Inc. and Stellartech Research Corporation (6) 10.21 Amended and Restated Development and Manufacturing Agreement dated October 4, 2007 between TivaMed, Inc. and Stellartech Research Corporation (6) 10.22 Right to Shares Letter Agreement, dated as of September 23, 2014 by and between the Registrant and GCP IV LLC (6) 10.23 Right to Shares Letter Agreement, dated as of September 23, 2014 by and between the Registrant and G-Ten Partners LLC (6) 10.24 Convertible Note Termination Agreement, dated May 9, 2014 by and between Viveve, Inc. and 5AM Ventures II, LP (10) 10.25 Convertible Note Termination Agreement, dated May 9, 2014 by and between Viveve, Inc. and 5AM Co-Investors II, LP (10) 10.26 Convertible Note Exchange Agreement, dated May 9, 2014 by and between Viveve, Inc. and GBS Venture Partners Limited, trustee for GBS BioVentures III (10) 10.27 Warrant Termination Agreement, dated as of May 9, 2014, by and between the Viveve, Inc. and 5AM Ventures II, LP (10) 10.28 Warrant Termination Agreement, dated as of May 9, 2014, by and between the Viveve, Inc. and 5AM Co-Investors II, LP (10) 10.29 Warrant Termination Agreement, dated as of May 9, 2014, by and between the Viveve, Inc. and GBS Venture Partners Limited, trustee for GBS BioVentures III (10) 10.30 Offer Letter to James G. Atkinson, dated February 4, 2015 (13)+ 10.31 First Amendment to Lease dated January 15, 2015 between The Castine Group and Viveve, Inc. (16) 10.32 Second Amendment to Loan and Security Agreement dated May 14, 2015 between Viveve, Inc. and Square 1 Bank (16) 10.33 Form of Securities Purchase Agreement dated May 12, 2015 (16) 10.34 Form of Registration Rights Agreement dated May 12, 2015 (16) 10.35 Letter Agreement with Stonepine Capital dated May 12, 2015 (16) 10.36 Form of Securities Purchase Agreement dated November 20, 2015 (17) 10.37 Form of Registration Rights Agreement dated November 20, 2015 (17) 10.38 Third Amendment to Loan and Security Agreement dated November 30, 2015 between Pacific Western Bank, as successor in interest by merger to Square 1 Bank, and Viveve, Inc. (18) 10.39 Fourth Amendment to Loan and Security Agreement dated March 18, 2016 between Pacific Western Bank, as successor in interest by merger to Square 1 Bank, and Viveve, Inc. * 14.1 Code of Conduct, adopted September 23, 2014 (15) List of the Registrant’s Subsidiaries (10) 23.1 Consent of Burr Pilger Mayer, Inc.* 24.1 Power of Attorney* 31.1 Certification of the Company’s Principal Executive Officer pursuant to 15d-15(e), under the Securities and Exchange Act of 1934. |
Stellartech also granted (i) an exclusive (even as to Stellartech), nontransferable, worldwide, royalty-free license within the Field under those certain intellectual property rights licensed to Stellartech pursuant to a development and supply agreement between Stellartech and Thermage, dated October 1, 1997 (the “Thermage Technology”), to use any elements of the Thermage Technology incorporated into the Stellartech Products, solely for the use, sale, offer for sale, importation and distribution within the Field; (ii) upon our satisfaction of the Minimum Commitment and the expiration of the Stellartech Agreement, an exclusive, nontransferable, worldwide, royalty-free, fully-paid license within the Field under Stellartech’s license rights in the Thermage Technology to use any elements of the Thermage Technology which are incorporated into the Stellartech Products to make and have made Stellartech Products in the Field; and (iii) the exclusive right within the Field to prosecute infringers of the portion of Stellartech’s Thermage Technology rights exclusively licensed to us. |
These include: ● product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action; ● quality system regulations, or QSRs, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process; ● labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses; ● Medical Device Reporting, or MDR, regulations, which require that a manufacturer report to the FDA if its device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur; ● post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device; and ● regulations pertaining to voluntary recalls and notices of corrections or removals. |
Our reliance on these suppliers subjects us to a number of risks that could harm our business, including: ● interruption of supply resulting from modifications to or discontinuation of a supplier’s operations; ● delays in product shipments resulting from uncorrected defects, reliability issues or a supplier’s variation in a component; ● a lack of long-term supply arrangements for key components with our suppliers; ● inability to obtain adequate supply in a timely manner, or to obtain adequate supply on commercially reasonable terms; ● difficulty locating and qualifying alternative suppliers for our components in a timely manner; ● production delays related to the evaluation and testing of products from alternative suppliers, and corresponding regulatory qualifications; ● delay in delivery due to suppliers prioritizing other customer orders over our orders; ● damage to our brand reputation caused by defective components produced by our suppliers; ● increased cost of our warranty program due to product repair or replacement based upon defects in components produced by our suppliers; and ● fluctuation in delivery by our suppliers due to changes in demand from us or from their other customers. |
The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following: ● actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; ● changes in the market’s expectations about our operating results; ● success of competitors; ● our operating results failing to meet the expectation of securities analysts or investors in a particular period; ● changes in financial estimates and recommendations by securities analysts concerning our business, the market for our products, the health services industry, or the healthcare and health insurance industries in general; ● operating and stock price performance of other companies that investors deem comparable to us; ● our ability to market new and enhanced products on a timely basis; ● changes in laws and regulations affecting our business; ● commencement of, or involvement in, litigation involving us; ● changes in our capital structure, such as future issuances of securities or the incurrence of debt; ● the volume of shares of our common stock available for public sale; ● any major change in our board of directors or management; ● sales of substantial amounts of common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and ● general economic and political conditions such as recessions, fluctuations in interest rates and international currency fluctuations. |
The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the Commission, that: ● contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; ● contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws; ● contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; ● contains a toll-free telephone number for inquiries on disciplinary actions; ● defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and ● contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation. |
Events of default which may cause repayment of the Loan to be accelerated include (1) non-payment of any obligation when due, (2) the failure to perform any obligation required under the Loan Agreement, (3) the occurrence of a Material Adverse Event, as defined in the Loan Agreement, (4) the attachment or seizure of a material portion of our assets if such attachment or seizure is not released, discharged or rescinded within 20 days, (5) if we become insolvent or starts an insolvency proceeding or if an insolvency proceeding is brought by a third party against us and such proceeding is not dismissed within 30 days, (6) if we default on or fail to perform any agreement (i) resulting in a right by a third party to accelerate indebtedness in an amount in excess of $100,000, (ii) resulting in the termination of the lease of our principal place of business or (iii) that would reasonably be expected to have a Material Adverse Effect, as defined in the Loan Agreement, (7) if a final, uninsured judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least $100,000 is rendered against us and remains unsatisfied and unstayed for a period of 45 days, or (8) if any material misrepresentation or material misstatement existed in any warranty or representation set forth in the Loan Agreement or in any certificate delivered to the Lender pursuant to the Loan Agreement or to induce the Lender to enter into the Loan Agreement or any other document. |
Controls and Procedures Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive officer and principal financial officer and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that: ● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; ● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures of are being made only in accordance with authorizations of our management and directors; and ● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. |
In addition the agreement provides for: (i) an annual incentive bonus (if approved by the board of directors, in their sole discretion) in an amount to be determined by the board of directors; (ii) an incentive payment of $1,000 for every $1 million in new equity financing raised during her first year of service, up to $20,000 (iii) an option for the purchase 27,539,116 shares of Viveve, Inc. common stock exercisable at the fair market value on the date of grant, with the right to purchase 25% of the option shares vesting after 12 months of continuous service and the right to purchase the remainder of the option shares vesting in equal monthly installments over the next 36 months of continuous service, with accelerated vesting upon an Involuntary Termination within 12 months of a Change in Control (as those terms are defined in the agreement); (iv) Company-sponsored benefits as in effect from time to time; (v) paid vacation in accordance with our vacation policy, as in effect from time to time; and (vi) continued base salary and benefits for twelve months following an Involuntary Termination. |
In addition the agreement provides for: (i) an annual incentive bonus (if approved by the board of directors, in their sole discretion) in an amount to be determined by the board of directors; (ii) an incentive bonus of $50,000 in the event a minimum of $1.5 million is raised in equity financing from new investors; (iii) an option for the purchase of 10,258,690 shares of Viveve, Inc. common stock exercisable at the fair market value on the date of grant, with the right to purchase 100,000 option shares vesting on the grant date, 2,614,672 option shares vesting after 12 months of continuous service and the right to purchase the remainder of the option shares vesting in equal monthly installments over the next 36 months of continuous service, with accelerated vesting upon a Change in Control before Mr. Durbin’s service terminates; (iv) Company-sponsored benefits in effect from time to time; (v) paid vacation in accordance with our vacation policy, as in effect from time to time; and (vi) continued base salary and benefits for ten months following an Involuntary Termination. |
2 (6) 4.1 Form of 5% Senior Secured Convertible Debenture issued on February 22, 2011, July 2, 2012, January 16, 2013, April 14, 2014, May 27, 2014, July 15, 2014 and August 6, 2014 (7) 4.2 Form of Common Stock Purchase Warrant issued on February 22, 2011, July 2, 2012, January 16, 2013, April 14, 2014, May 27, 2014, July 15, 2014 and August 6, 2014 (7) 4.3 Form of Common Stock Purchase Warrant issued on September 18, 2013 (8) 4.4 Form of Common Stock Purchase Warrant issued on September 23, 2014 to GBS Venture Partners Limited (9) 4.5 Conversion Agreement dated May 9, 2014 between the Registrant and holders of the Registrant’s 5% Senior Secured Convertible Debentures (9) 4.6 Warrant Exchange Agreement dated May 9, 2014 between the Registrant and certain holders of the Registrant’s warrants (9) 4.7 Form of Common Stock Purchase Warrant issued to investors in the private offering of the Registrant’s common stock which closed on September 23, 2014 (9) 4.8 Warrant to Purchase Stock issued September 30, 2014 to Square 1 Bank (10) 4.9 First Amendment to Warrant to Purchase Stock dated February 19, 2015 between Viveve, Inc. and Square 1 Bank (19) 4.10 Form of Common Stock Purchase Warrant issued on February 22, 2013 (11) 4.11 Note and Warrant Purchase Agreement, dated November 30, 2011(12) 4.12 Amendment No. |
2 to Note and Warrant Purchase Agreement dated March 7, 2012(12) 4.14 Warrant to Purchase Shares of Preferred Stock issued to 5AM Ventures II, LP on April 16, 2012(12) 4.15 Warrant to Purchase Shares of Preferred Stock issued to 5AM Co-Investors II, LP on April 16, 2012(12) 4.16 Warrant to Purchase Shares of Preferred Stock issued to GBS Venture Partners as trustee for GBS BioVentures III on April 16, 2012(12) 10.1 Form of Securities Purchase Agreement for the purchase of 5% Senior Secured Convertible Debentures (7) 10.2 Amendment and Waiver to Securities Purchase Agreement for the purchase of 5% Senior Secured Convertible Debentures dated July 2, 2012 (13) 10.3 Amendment and Waiver to Securities Purchase Agreement for the purchase of 5% Senior Secured Convertible Debentures dated January 16, 2013 (14) 10.4 Form of Securities Purchase Agreement dated February 22, 2013 (11) 10.5 Right to Shares Letter Agreement dated February 22, 2013 between the Registrant and GCP IV LLC (11) 10.6 Amendment and Waiver to Securities Purchase Agreement for the purchase of 5% Senior Secured Convertible Debentures dated February 22, 2013 (15) 10.7 Securities Purchase Agreement dated September 18, 2013 (8) 10.8 Amendment and Waiver to Securities Purchase Agreement for the purchase of 5% Senior Secured Convertible Debentures dated September 18, 2013 (11) 10.9 Right to Shares Letter Agreement dated September 18, 2013 between the Registrant and GCP IV LLC (8) 10.10 Financial Advisory Agreement dated May 9, 2014 between the Registrant and Bezalel Partners, LLC (15) 10.11 Form of Securities Purchase Agreement dated May 9, 2014 (15) 10.12 Securities Purchase Agreement, dated May 9, 2014, by and among the Registrant and GBS Venture Partners as trustee for GBS BioVentures III Trust (15) 10.13 Escrow Deposit Agreement, dated May 9, 2014 by and among the Registrant, Palladium Capital Advisors LLC, Middlebury Securities and Signature Bank, as escrow agent (15) 10.14 Registration Rights Agreement, dated May 9, 2014 (15) 10.15 First Amendment to Registration Rights Agreement, dated February 19, 2015 (19) 10.16 Right to Shares Letter Agreement dated May 9, 2014 between the Registrant and GCP IV LLC (15) 10.17 Promissory Note in the principal amount of $250,000 issued to GCP IV LLC on September 2, 2014 (16) 10.18 Form of Debenture Amendment Agreement dated September 2, 2014 (16) 10.19 Amendment dated September 10, 2014 to Securities Purchase Agreement dated February 22, 2013 (17) 10.20 Amendment dated September 11, 2014 to Securities Purchase Agreement dated February 22, 2013 (17) 10.21 PLC Systems Inc. 2013 Stock Option and Incentive Plan, as amended (6) 10.22 Offer of Employment dated May 14, 2012 from Viveve, Inc. to Patricia K. Scheller (4) 10.23 Offer of Employment dated January 23, 2013 from Viveve, Inc. to Scott C. Durbin (4) 10.24 Loan and Security Agreement dated September 30, 2014 between Viveve, Inc. and Square 1 Bank (10) 10.25 First Amendment to Loan and Security Agreement dated February 19, 2015 between Viveve, Inc. and Sqyare 1 Bank (19) 10.26 Intellectual Property Security Agreement dated September 30, 2014 between Viveve, Inc. and Square 1 Bank (10) 10.27 Unconditional Guaranty issued by the Registrant in favor of Square 1 Bank (10) 10.28 Intellectual Property Assignment and License Agreement dated February 10, 2006, as amended, between Dr. Edward Knowlton and TivaMed, Inc (6) 10.29 Development and Manufacturing Agreement dated June 12, 2006 between TivaMed, Inc. and Stellartech Research Corporation (6) 10.30 Amended and Restated Development and Manufacturing Agreement dated October 4, 2007 between TivaMed, Inc. and Stellartech Research Corporation (6) 10.31 Right to Shares Letter Agreement, dated as of September 23, 2014 by and between the Registrant and GCP IV LLC (6) 10.32 Right to Shares Letter Agreement, dated as of September 23, 2014 by and between the Registrant and G-Ten Partners LLC (6) 10.33 Convertible Note Termination Agreement, dated May 9, 2014 by and between Viveve, Inc. and 5AM Ventures II, LP(12) 10.34 Convertible Note Termination Agreement, dated May 9, 2014 by and between Viveve, Inc. and 5AM Co-Investors II, LP(12) 10.35 Convertible Note Exchange Agreement, dated May 9, 2014 by and between Viveve, Inc. and GBS Venture Partners Limited, trustee for GBS BioVentures III(12) 10.36 Warrant Termination Agreement, dated as of May 9, 2014, by and between the Viveve, Inc. and 5AM Ventures II, LP(12) 10.37 Warrant Termination Agreement, dated as of May 9, 2014, by and between the Viveve, Inc. and 5AM Co-Investors II, LP(12) 10.38 Warrant Termination Agreement, dated as of May 9, 2014, by and between the Viveve, Inc. and GBS Venture Partners Limited, trustee for GBS BioVentures III(12) 10.39 Employment Letter Agreement, dated May 14, 2012, by and between Viveve, Inc. and Patricia Scheller(12) 10.40 Employment Letter Agreement, dated January 23, 2013, by and between Viveve, Inc. and Scott Durbin(12) 10.41 Offer Letter to Jim Atkinson, dated February 4, 2015 (18) 14.1 Code of Conduct, adopted September 23, 2014* List of the Registrant’s Subsidiaries(12) 23.1 Consent of Burr Pilger Mayer, Inc.* 24.1 Power of Attorney* 31.1 Certification of the Company’s Principal Executive Officer pursuant to 15d-15(e), under the Securities and Exchange Act of 1934. |
Finally, even if we are successful in securing patent protection for some of our pending patent applications, or for additional intellectual property ideas in this field, we cannot predict when in the future any such potential patents may be issued, how strong such additional patent protection will prove to be, or whether these patents will be issued in a timely enough fashion to afford us any commercially meaningful advantage in marketing our RenalGuard System against other potentially competitive devices; ● We are exposed to risks associated with outsourcing activities, which could result in supply shortages that could affect our ability to meet customer needs; ● If we deliver systems with defects, our credibility may be harmed, sales and market and regulatory approvals acceptance of our systems may decrease and we may incur liabilities associated with those defects; ● If we require additional capital in the future, it may not be available, or if available, may not be on terms acceptable to us; ● We are exposed to various risks related to the regulatory environment for medical devices. |
Compliance with medical device health and safety regulations may be very costly, and the failure to comply could result in liabilities, fines and cessation of our business; ● Our share price will fluctuate based upon a number of factors including, but not limited to: - actual or anticipated fluctuations in our results of operations; - changes in estimates of our future results of operations by us or securities analysts; - announcements of technological innovations or new products or services by us or our competitors; - changes affecting the medical device industry; - announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; - additions or departures of key technical or management personnel; - issuances of debt or equity securities; - significant lawsuits, including patent or stockholder litigation; - changes in the market valuations of similar companies; - sales of our common stock by us or our stockholders in the future; - dilution caused by the conversion of convertible debt currently outstanding or which may be issued to our current secured lender and its assignees as well as the exercise of warrants issued to this lender, as well as by the exercise of employee stock options or the issuance of shares on the vesting of restricted stock units; - trading volume of our common stock; and - other events or factors that may directly or indirectly affect the value or perceived value of our business and/or prospects, including the risk factors identified in this prospectus. |
The term “internal control over financial reporting” is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, a company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, 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 and includes those policies and procedures that: ● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; ● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and ● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. |
On February 22, 2013, simultaneous with the closing of the February SPA, the Company entered into an Amendment and Waiver Agreement (the “February Amendment and Waiver Agreement”) with the Holder under which the Holder agreed to (a) increase the number of shares exercisable under the 2011 and 2012 Warrants from an aggregate 50,000,000 shares to 81,578,946 shares and to modify both the exercise price and the Volume Weighted Average Price (“VWAP price”) of the 2011 and 2012 Warrants to $0.098 and $0.155, respectively, (b) return to the Company for forfeiture the remaining warrants previously issued to purchase an aggregate 12,500,000 shares of common stock, (c) extend the due date for the 2012 Convertible Notes from February 22, 2014 to June 30, 2015, (d) until February 22, 2014, without the prior written consent from the majority of the investors under the February SPA, forbear from declaring any Event of Default (as defined in the original debenture), and (e) relinquish its right to purchase up to an additional $750,000 in debentures under the terms of the original Purchase Agreement. |
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