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Note 6 - Equity Incentive Plan | 9 Months Ended
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Sep. 30, 2017
Notes to Financial Statements |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] |
6. |  | Equity Incentive Plan
The Company estimates the fair value of stock options and stock appreciation rights (“SARs”) using the Black-Scholes valuation model. Fair value of restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) are measured by the grant-date price of the Company’s shares. The fair value of each stock option award during the nine -month periods ended September 30, 2017 and 2016, respectively, was estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions:
|  | Nine Months Ended September 30,
|  | 2017 |  | 2016
Risk-free interest rate |  |  | 1.60% | - | 1.78% |  |  |  | 0.94% | - | 1.40% |
Expected volatility |  |  | 41.36% | - | 44.30% |  |  |  | 48.84% | - | 51.61% |
Expected life (years) |  |  |  | 4.0 |  |  |  |  |  | 4.5 |  |
Expected dividend yield |  |  |  | 0.00% |  |  |  |  |  | 0.00% |  |
The Company recorded $1.5 million and $0.8 million of share-based compensation expense for the three -month periods ended September 30, 2017 and 2016, respectively, for equity compensation awards. The Company recorded $3.9 million and $2.3 million of share-based compensation expense for the nine -month periods ended September 30, 2017 and 2016, respectively, for equity compensation awards. The Company presents the expenses related to share-based compensation awards in the same expense line items as cash compensation paid to each of its employees as follows:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2017 |  | 2016 |  | 2017 |  | 2016
Cost of product revenue |  | $ | 107 |  |  | $ | 40 |  |  | $ | 306 |  |  | $ | 66 |
Research and development |  |  | 177 |  |  |  | 156 |  |  |  | 340 |  |  |  | 300 |
Selling, general and administrative |  |  | 1,190 |  |  |  | 601 |  |  |  | 3,294 |  |  |  | 1,910 |
Total stock-based compensation expense |  | $ | 1,474 |  |  | $ | 797 |  |  | $ | 3,940 |  |  | $ | 2,276 |
On June 13, 2017, the Company’s shareholders approved the Anika Therapeutics, Inc. 2017 Omnibus Incentive Plan ( the “2017 Plan”). The 2017 Plan replaced the Anika Therapeutics, Inc. Second Amended and Restated 2003 Stock Option and Incentive Plan, as amended, (the “2003 Plan”), as the plan under which future grants to employees, directors, officers, and consultants will be made. The 2017 Plan was originally approved by the Company’s Board of Directors on March 31, 2017. The terms of the 2017 Plan provide for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and performance awards that may be settled in cash, stock, or other property. Subject to adjustment for specified types of changes in our capitalization, no more than 1.2 million shares of common stock may be issued under the 2017 Plan. During the three -month period ended September 30, 2017, a total of 60,609 stock options and 14,506 RSAs were granted under the 2017 Plan. During the nine -month period ended September 30, 2017, a total of 63,109 stock options and 14,506 RSAs were granted under the 2017 Plan and a total of 407,635 stock options were granted under the 2003 Plan. The stock options granted to employees become exercisable or vest ratably over a three -year period. In addition, the Company executed its annual grant of 9,970 RSUs to non-employee directors, and these RSUs vest over a one -year period. A portion of the stock options granted during the nine -month period ended September 30, 2017 contained certain performance criteria in addition to time-based vesting conditions. For performance-based awards with financial achievement targets, the Company recognizes expense using the graded vesting methodology based on the number of shares expected to vest. Compensation cost associated with performance grants is estimated using the Black-Scholes valuation method multiplied by the expected number of shares to be issued, which is adjusted based on the estimated probabilities of achieving the performance goals. Changes to the probability assessment and the estimated shares expected to vest will result in adjustments to the related share-based compensation expense that will be recorded in the period of the change. If the performance targets are not achieved, no compensation cost is recognized and any previously recognized compensation cost is reversed. In connection with the adoption of ASU 2016 - 09, as of January 1, 2017, the Company elected to recognize forfeitures as they occur rather than estimate forfeitures each period, which was applied on a modified retrospective basis. Accordingly, the Company recognized a cumulative adjustment to retained earnings at the beginning of the nine -month period ended September 30, 2017, resulting in a reduction of $0.5 million.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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