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Note 15 - Share-based Payments

6 Months Ended

Jun. 30, 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 June 30, 2021 and June 30, 2020 are as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):

	*Three Months Ended June 30, 2021*					*Three Months Ended June 30, 2020*
	*Number of shares*			*Weighted average exercise price per share*		*Number of shares*			*Weighted average exercise price per share*

Outstanding, beginning of period		808,469		$	55.55		730,037		$	50.85
Granted		239,050			79.43		190,025			59.53
Exercised		(45,538	)		43.24		(16,922	)		9.79
Forfeited		(9,498	)		61.23		(4,826	)		59.15
Expired		(1,386	)		61.93		(1,036	)		58.39
Outstanding, end of period		991,097			61.81		897,278			53.41
Options exercisable, end of period		438,437		$	53.16		390,868		$	46.20

Details of stock option transactions for the six months ended June 30, 2021 and June 30, 2020 are as follows (Dollar amounts in thousands of U.S. dollars, except per share amounts):

	*Six Months Ended June 30, 2021*					*Six Months Ended June 30, 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		239,050			79.43		195,525			59.19
Exercised		(73,875	)		44.82		(41,935	)		16.23
Forfeited		(17,562	)		61.00		(8,315	)		60.23
Expired		(1,536	)		61.93		(2,494	)		59.86
Outstanding, end of period		991,097			61.81		897,278			53.41
Options exercisable, end of period		438,437		$	53.16		390,868		$	46.20

As of June 30, 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		29,239	$	18.98		0.7	$	1,793		29,239	$	18.98		0.7	$	1,793
21.10 - 27.53		32,500		23.33		1.0		1,852		32,500		23.33		1.0		1,852
35.25 - 37.35		4,375		37.35		0.5		188		4,375		37.35		0.5		188
46.90 - 48.00		13,000		47.36		4.6		428		7,000		47.29		3.6		231
51.82 - 59.98		274,858		55.56		3.0		6,806		204,102		55.56		2.9		5,054
60.01 - 68.41		378,525		62.07		5.1		6,908		151,221		62.39		4.8		2,712
72.50 - 79.87		258,600		78.89		6.8		369		10,000		72.50		6.4		78
		991,097	$	61.81		4.7	$	18,344		438,437	$	53.16		3.3	$	11,908

Total unrecognized compensation cost relating to unvested stock options at June 30, 2021, prior to the consideration of expected forfeitures, is approxi mately $11.2 million and is expected to be recognized over a weighted average period of 2.2 years.

The Company recorded stock-based compensation of $1.2 million for the three months ended June 30, 2021, and $0.8 million for the three months ended June 30, 2020, respectively.

The Company recorded stock-based compensation of $2.2 million for the six months ended June 30, 2021, and $1.6 million six months ended June 30, 2020, respectively.

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