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Note 16 - Share-based Payments

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Text Block]

16. 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, 2020 and June 30, 2019 are as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):

	*Three Months Ended June 30, 2020*					*Three Months Ended June 30, 2019*
	*Number of shares*			*Weighted average exercise price per share*		*Number of shares*			*Weighted average exercise price per share*

Outstanding, beginning of period		730,037		$	50.85		665,156		$	44.46
Granted		190,025			59.53		144,300			62.12
Exercised		(16,922	)		9.79		(25,316	)		13.26
Forfeited		(4,826	)		59.15		(8,550	)		56.08
Expired		(1,036	)		58.39		(675	)		55.65
Outstanding, end of period		897,278			53.41		774,915			48.63
Options exercisable, end of period		390,868		$	46.20		306,078		$	33.97

Details of stock option transactions for the six months ended June 30, 2020 and June 30, 2019 are as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):

	*Six Months Ended June 30, 2020*					*Six Months Ended June 30, 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		195,525			59.19		144,300			62.12
Exercised		(41,935	)		16.23		(54,359	)		19.34
Forfeited		(8,315	)		60.23		(15,301	)		57.55
Expired		(2,494	)		59.86		(2,062	)		55.65
Outstanding, end of period		897,278			53.41		774,915			48.63
Options exercisable, end of period		390,868		$	46.20		306,078		$	33.97

As of June 30, 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

$10.16 - $19.95		62,090	$	16.23		1.2	$	2,551		62,090	$	16.23		1.2	$	2,551
$21.10 - $27.53		51,250		24.11		1.4		1,702		51,250		24.11		1.4		1,702
$35.25 - $37.35		14,375		35.89		2.9		308		13,125		35.95		2.9		280
$46.90 - $47.00		15,000		47.30		5.7		150		3,750		47.00		3.7		39
$51.82 - $58.65		340,878		55.52		4.0		640		175,527		55.69		3.8		310
$60.01 - $64.10		413,685		61.71		6.1		-		85,126		63.33		5.3		-
		897,278	$	53.41		4.7	$	5,351		390,868	$	46.20		3.4	$	4,882

Total unrecognized compensation cost relating to unvested stock options at June 30, 2020, prior to the consideration of expected forfeitures, is approxi mately $8.8 m illion and is expected to be recognized over a weighted average period of 2.6 years.

The Company recorded stock-based compensation of $0.8 million for the three months ended June 30, 2020, and $0.7 million for the three months ended June 30, 2019, respectively.

The Company recorded stock-based compensation of $1.6 million for the six months ended June 30, 2020, and $1.2 million for the six months ended June 30, 2019, respectively.

The Company has not capitalized any stock-based compensation expense as part of the cost of an asset.