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Note 15 - Share-based Payments

3 Months Ended

Mar. 31, 2021

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, 2021 and March 31, 2020 are as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):

	*Three Months Ended March 31, 2021*					*Three Months Ended March 31, 2020*
	*Number of shares*			*Weighted average exercise price per share*		*Number of shares*			*Weighted average exercise price per share*

Outstanding, beginning of period		845,020		$	55.31		754,497		$	49.94
Granted		-			-		5,500			47.35
Exercised		(28,337	)		47.03		(25,013	)		20.59
Forfeited		(8,064	)		60.72		(3,489	)		61.73
Expired		-			-		(1,458	)		60.91
Outstanding, end of period		808,619			55.55		730,037			50.85
Options exercisable, end of period		378,258		$	49.35		349,845		$	41.65

As of March 31, 2021, the exercise prices, weighted average remaining contractual life of outstanding options and intrinsic values 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		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

$15.93 - $19.95		42,064	$	18.05		0.8	$	2,501		42,064	$	18.05		0.8	$	2,501
$21.10 - $27.53		36,250		23.76		1.2		1,948		36,250		23.76		1.2		1,948
$35.25 - $37.35		5,625		36.88		1.2		228		5,625		36.88		1.2		228
$46.90 - $48.00		13,000		47.36		4.8		392		6,000		47.17		3.5		182
$51.82 - $59.98		291,372		55.52		3.2		6,405		217,616		55.50		3.1		4,787
$60.01 - $68.41		400,308		62.07		5.3		6,177		70,703		63.32		4.6		1,002
$72.50 - $72.50		20,000		72.50		6.7		100		-		-		-		-
		808,619	$	55.55		4.1	$	17,751		378,258	$	49.35		2.9	$	10,648

Total unrecognized compensation cost relating to unvested stock options at March 31, 2021, prior to the consideration of expected forfeitures, is approxi mately $6.0 m illion and is expected to be recognized over a weighted average period of 2.2 years.

The Company recorded stock-based compensation of $1.0 million for the three months ended March 31, 2021, and $0.8 million for the three months ended March 31, 2020, respectively.

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