XML 27 R17.htm IDEA: XBRL DOCUMENT
v3.21.1

Note 11 - Equity Incentive Plan | 3 Months Ended
--- | ---
Mar. 31, 2021
Notes to Financial Statements |
Share-based Payment Arrangement [Text Block] |
11. | Equity Incentive Plan
The Company estimates the fair value of stock options using the Black-Scholes valuation model. Fair value of total shareholder return options (“TSR”) is measured by using a Monte-Carlo simulation model. Fair value of restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) is measured by the grant-date price of the Company’s shares. Fair value of performance restricted stock units (“PSUs”) is measured by the grant-date price of the Company’s shares with corresponding compensation cost recognized over the requisite service period. Compensation cost is recognized 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 compensation cost 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. The expected volatility assumption is evaluated against the historical volatility of the Company’s common stock over a 4-year average, except for TSRs which is evaluated over 6.3 years, and it is adjusted if there are material changes in historical volatility. The risk-free interest rate assumption is based on U.S. Treasury interest rates at the time of grant. The fair value of each stock option award during the three-month periods ended March 31, 2021 and 2020 was estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions:
|  | Three Months Ended March 31,
|  | 2021 |  | 2020
Risk free interest rate |  | 0.3% | - | 0.6% |  | 0.4% | - | 1.6%
Expected volatility |  | 54.8% | - | 55.4% |  | 46.5% | - | 49.4%
Expected life (years) |  |  | 4.0 |  |  |  | 4.0 |
Expected dividend yield |  |  | 0.0% |  |  |  | 0.0% |
The Company presents the expenses related to stock-based compensation awards in the same expense line items as cash compensation paid to each of its employees as follows:
|  | Three Months Ended March 31, |
|  | 2021 |  |  | 2020 |
Cost of revenue |  | $ | 129 |  |  | $ | 146 |
Research and development |  |  | 241 |  |  |  | 196 |
Selling, general and administrative |  |  | 1,889 |  |  |  | (549 | )
Total stock-based compensation expense |  | $ | 2,259 |  |  | $ | (207 | )
On January 29, 2020, the Company announced the unexpected death of its former President and Chief Executive Officer, Joseph Darling. According to the terms of Mr. Darling’s equity award grants and the Anika Therapeutics, Inc. 2017 Omnibus Incentive Plan (the “2017 Plan”), the unvested portion of his stock-based compensation was forfeited upon his death, resulting in a one-time benefit of $1.8 million that was fully recognized during the three-month period ended March 31, 2020 within selling, general and administrative expenses. The following table sets forth share information for stock-based compensation awards granted and exercised during the three-month periods ended March 31, 2021 and 2020:
|  | Three Months Ended March 31, |
|  | 2021 |  |  | 2020 |
Grants: |  |  |  |  |  |  |  |
Stock options |  |  | 421,463 |  |  |  | 210,775 |
RSUs |  |  | 258,417 |  |  |  | 100,631 |
PSUs |  |  | - |  |  |  | 57,400 |
Exercises: |  |  |  |  |  |  |  |
Stock options |  |  | 125 |  |  |  | - |
Forfeitures: |  |  |  |  |  |  |  |
Stock options |  |  | 73,156 |  |  |  | 33,478 |
RSAs |  |  | - |  |  |  | 8,574 |
RSUs |  |  | 4,092 |  |  |  | 63,683 |
PSUs |  |  | 2,500 |  |  |  | 63,000 |
Expirations: |  |  |  |  |  |  |  |
Stock options |  |  | 2,667 |  |  |  | 363 |
During the three-month period ended March 31, 2021, the Company granted stock-based compensation awards in the form of stock options, and RSUs to employees and RSUs to non-employee directors, the majority of which become exercisable or vest ratably over a three-year period. Of the 421,463 stock options granted during the first quarter of 2021, 301,845 shares were premium-priced options which were granted with an exercise price at 110% of the market price of the Company’s stock on the date of grant.

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration