Note 15 - Share-based Payments

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

15.

Share-based payments:

Stock options

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Because option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. The assumptions presented in the table below represent the weighted average of the applicable assumption used to value stock options at their grant date. The Company calculates expected volatility based on historical volatility of the Company's common shares. The expected term, which represents the period of time that options granted are expected to be outstanding, is estimated based on historical exercise experience. The Company evaluated historical exercise behavior when determining the expected term assumptions. The risk-free rate assumed in valuing the options is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The Company determines the expected dividend yield percentage by dividing the expected annual dividend by the market price of Tucows Inc. common shares at the date of grant.

Details of stock option transactions for the

three

months ended 

March 31, 2020

and 

March 31, 2019

are as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):

	Three Months Ended Mar 31, 2020					Three Months Ended March 31, 2019
	Number of shares			Weighted average exercise price per share		Number of shares			Weighted average exercise price per share
Outstanding, beginning of period		754,497		$	49.94		702,337		$	43.80
Granted		5,500			47.35		-			-
Exercised		(25,013	)		20.59		(29,043	)		24.63
Forfeited		(3,489	)		61.73		(6,751	)		59.40
Expired		(1,458	)		60.91		(1,387	)		60.82
Outstanding, end of period		730,037			50.85		665,156			44.46
Options exercisable, end of period		349,845		$	41.65		304,007		$	29.52

As of

March 31, 2020

, the exercise prices, weighted average remaining contractual life of outstanding options and intrinsic values were as follows:

	Options outstanding								Options exercisable
Exercise price	Number outstanding		Weighted average exercise price per share		Weighted average remaining contractual life (years)		Aggregate intrinsic value		Number exercisable		Weighted average exercise price per share		Weighted average remaining contractual life (years)		Aggregate intrinsic value
$ 8.56 - $ 8.56		15,722	$	8.56		0.1	$	624		15,722	$	8.56		0.1	$	624
$10.16 - $19.95		62,990		16.23		1.5		2,018		62,990		16.23		1.5		2,018
$21.10 - $27.53		51,250		24.11		1.7		1,237		51,250		24.11		1.7		1,237
$35.25 - $37.35		14,375		35.89		3.2		178		13,125		35.95		3.1		162
$44.90 - $47.00		10,000		46.95		5.4		13		3,750		47.00		4.0		5
$51.82 - $58.65		337,353		55.53		4.2		-		176,527		55.69		4.0		-
$61.33 - $64.10		238,347		62.99		5.7		-		26,481		64.10		5.2		-
		730,037	$	50.85		4.2	$	4,070		349,845	$	41.65		3.1	$	4,046

Total unrecognized compensation cost relating to unvested stock options at

March 31, 2020

, prior to the consideration of expected forfeitures, is approxi

mate

ly

$5.8

 m

il

lion and is expected to be recognized over a weighted average period

of

2.2

 

y

ears.

The Company recorded stock-based compensation of 

$0.8

 million for the

three

months ended

March 31, 2020

, and

$0.5

 million for the

three

months ended 

March 31, 2019

, respectively. 

The Company has

not

capitalized any stock-based compensation expense as part of the cost of an asset.