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Note 14 - Equity Incentive Plans | 12 Months Ended
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Dec. 31, 2025
Notes to Financial Statements |
Share-Based Payment Arrangement [Text Block] | 14. Equity Incentive Plan Equity Incentive Plan The Anika Therapeutics, Inc. 2017 Omnibus Incentive Plan (the “2017 Plan”) was approved by the Company’s stockholders on June 13, 2017 and subsequently amended most recently on June 25, 2024. On June 25, 2025, the Company’s stockholders approved an amendment to the 2017 Plan increasing the number of shares by 475,000 shares from 5,285,000 shares to 5,760,000 shares. The 2017 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), performance restricted stock units (“PSUs”), restricted stock units (“RSUs”), total shareholder return options (“TSRs”) and performance options that may be settled in cash, stock, or other property. In accordance with the 2017 Plan approved by the Company’s stockholders, including the amendments thereto, each share award other than stock options or SARs will reduce the number of total shares available for grant by two shares. Subject to adjustment for specified types of changes in the Company’s capitalization, no more than 4.6 million shares of common stock may be issued under the 2017 Plan. There are 1.4 million shares available for future grant at December 31, 2025 under the 2017 Plan. These shares available for future grant exclude 0.9 million of PSUs and RSUs that are subject to liability accounting based on the expectation the shares will be settled in cash. If these PSUs and RSUs were to be settled in shares at vesting then the Company will have fewer shares available for future issuance. The Anika Therapeutics, Inc. 2021 Inducement Plan (the “Inducement Plan”) was adopted by the Company’s board of directors on November 4, 2021 in which the Company reserved 125,000 shares of common stock for issuance pursuant to equity-based awards granted under the Inducement Plan. Such awards may be granted only to an individual who was not previously the Company’s employee or director with the Company. The Inducement Plan provides for the grant of awards under terms substantially similar to the 2017 Plan (as amended). The Inducement Plan was amended in December 2023 to add 125,000 shares. There are 0.1 million shares available for future grant at December 31, 2025 under the Inducement Plan. The Company may satisfy the awards upon exercise, or upon fulfillment of the vesting requirements for other equity-based awards, with either newly issued shares or shares reacquired by the Company. Stock-based awards are granted with an exercise price equal to or greater than the market price of the Company’s stock on the date of grant. Awards contain service conditions or service and performance conditions, and they generally become exercisable ratably over one to four years with a maximum contractual term of ten years. For the years ended December 31, 2025, and 2024, the tax benefit associated with stock-based compensation was $0.8 million and $1.9 million, respectively. A summary of the stock-based compensation in the Company’s statements of operations is as follows (in thousands):
|  | Years Ended December 31, |
|  | 2025 |  |  | 2024 |  |  | 2023 |
Cost of revenue |  | $ | 292 |  |  | $ | 328 |  |  | $ | 575 |
Research and development |  |  | 1,232 |  |  |  | 1,612 |  |  |  | 1,934 |
Selling, general and administrative |  |  | 8,692 |  |  |  | 10,218 |  |  |  | 11,028 |
Total stock-based compensation expense |  | $ | 10,216 |  |  | $ | 12,158 |  |  | $ | 13,537 |
For the years ended December 31, 2025, 2024 and 2023, windfall (shortfall) tax expense of ($0.5) million, ($0.1) million and ($0.1) million, respectively, are associated with the stock-based compensation expense above. Stock Options Stock options are granted to purchase common shares at prices that are equal to the fair market value of the shares on the date the options are granted or, in the case of premium options, are granted with an exercise price at 110% of the market price of the Company’s common stock on the date of grant. Options generally vest in equal annual installments over a period of three to four years and expire 10 years after the date of grant. The grant-date fair value of options is recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period. The following summarizes the activity under the Company’s stock option plans:
|  | Number of Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term (in years) |  |  | Aggregate Intrinsic Value (in thousands) |
Outstanding as of December 31, 2024 |  |  | 2,089,040 |  |  | $ | 32.07 |  |  |  |  |  |  |  |  |
Granted |  |  | 16,300 |  |  | $ | 12.71 |  |  |  |  |  |  |  |  |
Exercised |  |  | - |  |  | $ | - |  |  |  |  |  |  |  |  |
Forfeited and canceled |  |  | (340,315 | ) |  | $ | 34.51 |  |  |  |  |  |  |  |  |
Outstanding as of December 31, 2025 |  |  | 1,765,025 |  |  | $ | 31.42 |  |  |  | 6.3 |  |  | $ | 1 |
Vested, December 31, 2025 |  |  | 1,345,721 |  |  | $ | 32.60 |  |  |  | 5.8 |  |  | $ | - |
Vested or expected to vest, December 31, 2025 |  |  | 1,765,025 |  |  | $ | 31.42 |  |  |  | 6.3 |  |  | $ | 1 |
The aggregate intrinsic value of options exercised was immaterial for the years ended December 31, 2025, 2024 and 2023, respectively. The Company granted 16,300 stock options during the year ended December 31, 2025. The Company uses the Black-Scholes pricing model to determine the fair value of options granted. The calculation of the fair value of stock options is affected by the stock price on the grant date, the expected volatility of the Company’s common stock over the expected term of the award, the expected life of the award, the risk-free interest rate and the dividend yield. The assumptions used in the Black-Scholes pricing model for options granted during the years ended December 31, 2025, 2024 and 2023, along with the weighted-average grant-date fair values, were as follows:
| 2025 |  | 2024 |  | 2023
Risk-free interest rate | 3.71% | - | 3.99% |  | 3.48% | - | 4.62% |  | 3.52% | - | 4.64%
Expected stock price volatility | 41.64% | - | 45.68% |  | 41.54% | - | 48.19% |  | 48.19% | - | 49.44%
Expected life of options (in years) |  | 4.5 |  |  |  | 4.5 |  |  |  | 4.5 |
Expected dividend yield |  | 0.0% |  |  |  | 0.0% |  |  |  | 0.0% |
Fair value per option |  | $5.13 |  |  |  | $10.52 |  |  |  | $11.45 |
As of December 31, 2025, there was $2.4 million of unrecognized compensation related to unvested stock options. This expense is expected to be recognized over a weighted average period of 1.3 years. Restricted Stock Units RSUs generally vest in equal annual installments over a three- or four-year period. The grant-date fair value of RSUs is recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period. The Company determines the fair value of restricted stock units based on the closing price of its common stock on the date of grant. RSU activity for the year ended December 31, 2025 is as follows:
|  | Number of Shares |  |  | Weighted Average Fair Value |
Outstanding as of December 31, 2024 |  |  | 836,562 |  |  | $ | 26.70 |
Granted |  |  | 569,042 |  |  | $ | 14.85 |
Vested |  |  | (317,850 | ) |  | $ | 25.86 |
Forfeited and cancelled |  |  | (134,041 | ) |  | $ | 23.09 |
Outstanding as of December 31, 2025 |  |  | 953,713 |  |  | $ | 20.41 |
The weighted-average grant-date fair value per share of RSUs granted was $14.85, $26.62 and $26.66 for the years ended December 31, 2025, 2024 and 2023, respectively. The total fair value of RSUs vested was $8.2 million, $8.7 million and $6.9 million for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, the Company had outstanding 342,713 RSUs being treated as equity awards in which $1.5 million of unrecognized compensation cost related to time-based RSUs, which is expected to be recognized over a weighted-average period of 0.8 years. The Company’s annual grants of RSU awards in March 2024 and 2025 can be settled at vesting in cash or shares at the Company’s election. The Company has recorded these RSU grants as a liability due to the expectation that the Company will settle the vesting of these RSU awards in cash due to a potential shortage of shares in the 2017 Plan at the time of vesting. As a result, these RSUs will be subject to change in value at the time of each reporting period. The first tranche of the March 2024 RSU awards vested in March 2025 and the Company issued 106,550 shares to employees. As of December 31, 2025, the Company had 611,000 RSUs outstanding for which a liability of $1.8 million was recorded in Accrued Expenses and Other Liabilities at December 31, 2025 and there is unrecorded compensation cost of $4.1 million which is to be recognized over a weighted-average period of 2.0 years. Performance Stock Units (“PSUs”) PSU activity for the year ended December 31, 2025 was as follows:
|  |  |  |  |  | Weighted Average |
|  | Number of |  |  | Grant Date |
|  | Shares |  |  | Fair Value |
Outstanding as of December 31, 2024 |  |  | - |  |  | $ | - |
Granted |  |  | 290,792 |  |  | $ | 15.36 |
Vested |  |  | - |  |  | $ | - |
Forfeited and cancelled |  |  | (11,038 | ) |  | $ | 15.42 |
Outstanding as of December 31, 2025 |  |  | 279,754 |  |  | $ | 15.36 |
The weighted-average grant-date fair value per share of PSUs granted was $15.36 for the year ended December 31, 2025. There were no PSUs granted in the years ended December 31, 2024 and 2023, respectively. On March 14, 2025, the Company granted 290,792 PSUs to certain senior management employees. The Company granted two different PSU awards to each PSU award recipient. One form of PSU award has a 3-year cliff vest subject to achievement of certain market-based metrics in which 50-200% of target shares granted may vest based on achievement of the specified Company market price targets during the performance period from March 14, 2025 through March 1, 2028. No shares will vest if these market price targets are not achieved. The Company estimated the fair value of these market-based PSUs using a Monte Carlo simulation model in which multiple simulations were using inputs based on the Black-Scholes formula using inputs for expected volatility, risk-free interest rate and dividend yield. The market-based PSUs were valued at the grant date and the Company will continue to use the Monte- Carlo simulation model to update the fair value at the end of each reporting period. The second form of PSU awards is vesting in equal annual installments of target on each anniversary date of grant over three years, subject to annual achievement of the specified strategic performance objectives each year based upon certain regulatory milestones and financial targets. Subject to achievement of each milestone, these awards will vest annually on each anniversary date of the grant date over three years. The Company recognizes stock-based compensation based on the evaluation of probability outcomes of achieving these milestones each reporting period. The Company’s annual grants of PSU awards in March 2025 can be settled at vesting in cash or shares at the Company’s election. The Company has recorded these PSUs as a liability due to the expectation that the Company will settle the vesting of these PSU awards in cash due to a potential shortage of shares in the 2017 Plan at the time of vesting. As a result, these PSUs will be subject to change in value at the time of each reporting period. As of December 31, 2025, the Company had 279,754 shares outstanding for which a liability of $0.6 million was recorded in Accrued Expenses and Other Liabilities and there is unrecorded compensation cost of $0.8 million associated with these PSUs which is to be recognized over a weighted-average period of 2.3 years.

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