. 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

June 30, 2019

and

June 30, 2018

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

	Three months ended June 30, 2019					Three months ended June 30, 2018
	Number of Shares			Weighted average exercise price per share		Number of Shares			Weighted average exercise price per share
Outstanding, beginning of period		665,156		$	44.46		634,883		$	37.48
Granted		144,300			62.12		128,566			64.10
Exercised		(25,316	)		13.26		(16,153	)		12.26
Forfeited		(8,550	)		56.08		(13,100	)		55.04
Expired		(675	)		55.65		-			-
Outstanding, end of period		774,915		$	48.63		734,196		$	42.39
Options exercisable, end of period		306,078		$	33.97		229,780		$	16.92

Details of stock option transactions for the

six

months ended

June 30, 2019

and

June 30, 2018

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

	Six months ended June 30, 2019					Six months ended June 30, 2018
	Number of Shares			Weighted average exercise price per share		Number of Shares			Weighted average exercise price per share
Outstanding, beginning of period		702,337		$	43.80		653,571		$	36.69
Granted		144,300			62.12		139,566			63.66
Exercised		(54,359	)		19.34		(28,716	)		10.30
Forfeited		(15,301	)		57.55		(30,225	)		47.96
Expired		(2,062	)		55.65		-			-
Outstanding, end of period		774,915		$	48.63		734,196		$	42.39
Options exercisable, end of period		306,078		$	33.97		229,780		$	16.92

As of

June 30, 2019,

the exercise prices, weighted average remaining contractual life and intrinsic values of outstanding options were as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):

			Options outstanding						Options exercisable
Exercise Price			Number outstanding		Weighted average exercise price per share		Aggregate intrinsic value		Number outstanding		Weighted average exercise price per share		Weighted average remaining contractual life (years)		Aggregate intrinsic value
$5.52	-	$8.56		32,785	$	7.49	$	1,755		32,785	$	7.49		0.7	$	1,755
$10.16	-	$19.95		86,475		16.32		3,865		85,225		16.27		2.0		3,814
$21.10	-	$27.53		58,750		23.73		2,191		48,750		24.27		2.4		1,792
$35.25	-	$37.35		14,375		35.89		361		11,875		36.02		3.8		297
$43.15	-	$47.00		16,250		44.33		271		11,500		43.99		4.6		196
$53.20	-	$58.65		310,603		55.67		1,663		87,881		55.20		4.6		511
$62.12	-	$64.10		255,677		62.99		-		28,062		64.10		3.2		-
				774,915	$	48.63	$	10,106		306,078	$	33.97		3.2	$	8,365

Total unrecognized compensation cost relating to unvested stock options at

June 30, 2019,

prior to the consideration of expected forfeitures, is approximately

$8.1

million and is expected to be recognized over a weighted average period of

2.7

years.

The Company recorded stock-based compensation of

$0.7

and

$1.2

million for the

three

and

six

months ended

June 30, 2019,

and

$0.6

and

$1.2

million for the

three

and

six

months ended

June 30, 2018,

respectively.

The Company has

not

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