Quarterly report pursuant to Section 13 or 15(d)

Note 12 - Share-based Compensation

v3.20.2
Note 12 - Share-based Compensation
6 Months Ended
Jun. 30, 2020
Notes to Financial Statements  
Share-based Payment Arrangement [Text Block]
12.
Share-Based Compensation
 
2019
Omnibus Incentive Plan
 
The DiaMedica Therapeutics Inc.
2019
Omnibus Incentive Plan (
2019
Plan) was adopted by the Board of Directors in
March 2019
and approved by our shareholders at our annual general and special meeting of shareholders held on
May 22, 2019.
The
2019
Plan permits the Board, or a committee or subcommittee thereof, to grant to the Company's eligible employees, non-employee directors and consultants non-statutory and incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units, deferred stock units, performance awards, non-employee director awards and other stock-based awards. We grant options to purchase common shares under the
2019
Plan at
no
less than the fair market value of the underlying common shares as of the date of grant. Options granted to employees and non-employee directors have a maximum term of
ten
years and generally vest in approximately equal quarterly installments over
one
to
three
years. Options granted to non-employees have a maximum term of
five
years and generally vest in approximately equal quarterly installments over
one
year. Subject to adjustment as provided in the
2019
Plan, the maximum number of the Company's common shares authorized for issuance under the
2019
Plan is
2,000,000
shares. As of
June 30, 2020,
options to purchase
870,395
common shares were outstanding and there were
26,054
common shares reserved for deferred stock units (DSUs) outstanding under the
2019
Plan.
 
Prior stock option plan
 
The DiaMedica Therapeutics Inc. Stock Option Plan, Amended and Restated
November 6, 2018 (
Prior Plan), was terminated by the Board of Directors in conjunction with the shareholder approval of the
2019
Plan. Awards outstanding under the Prior Plan remain outstanding in accordance with and pursuant to the terms thereof. Options granted under the Prior Plan have terms similar to those used under the
2019
Plan. As of
June 30, 2020,
options to purchase
543,593
common shares were outstanding under the Prior Plan.
 
As the TSX Venture Exchange was the principal trading market for the Company's common shares, all options granted prior to
December 31, 2018
were priced in Canadian dollars. Options granted after
December 31, 2018
have been priced in United States dollars.
 
Prior deferred share unit plan
 
The DiaMedica Therapeutics Inc. Amended and Restated Deferred Share Unit Plan (DSU Plan) was terminated by the Board of Directors in conjunction with the shareholder approval of the
2019
Plan. Awards outstanding under the DSU Plan remain outstanding in accordance with and pursuant to the terms thereof. As of
June 30, 2020,
there were
21,183
common shares reserved for DSUs outstanding.
 
The aggregate number of common shares reserved for issuance for awards granted under the
2019
Plan, the Prior Plan and the DSU Plan as of
June 30, 2020
was
1,461,225.
 
Share-based compensation expense for each of the periods presented is as follows (in thousands):
 
   
Three Months Ended
June 30
   
Six Months Ended
June 30
 
   
2020
   
2019
   
2020
   
2019
 
Research and development
  $
131
    $
67
    $
238
    $
125
 
General and administrative
   
305
     
115
     
591
     
187
 
Total share-based compensation
  $
436
    $
182
    $
829
    $
312
 
 
We recognize share-based compensation based on the fair value of each award as estimated using the Black-Scholes option valuation model. Ultimately, the actual expense recognized over the vesting period will only be for those shares that actually vest.
 
A summary of option activity is as follows (in thousands except share and per share amounts):
 
   
Shares
Underlying
Options
Outstanding
   
Weighted
Average Exercise
Price Per Share
   
Aggregate
Intrinsic Value
 
Balances at December 31, 2019
   
1,220,359
    $
5.26
    $
 
Granted
   
267,332
     
4.75
     
 
 
Exercised
   
(7,200
)    
2.21
     
 
 
Expired/cancelled
   
(66,505
)    
5.04
     
 
 
Forfeited
   
     
     
 
 
Balances at June 30, 2020
   
1,413,988
    $
5.19
    $
3,191
 
 
Information about stock options outstanding, vested and expected to vest as of
June 30, 2020,
is as follows:
 
       
Outstanding, Vested and Expected to Vest
   
Options Vested and Exercisable
 
Per Share Exercise Price
 
Shares
   
Weighted Average
Remaining
Contractual Life
(Years)
   
Weighted Average
Exercise Price
   
Options
Exercisable
   
Weighted Average
Remaining
Contractual Life
(Years)
 
$2.00
-
$2.99
   
125,700
     
5.5
    $
2.24
     
125,700
     
5.5
 
$3.00
-
$3.99
   
98,572
     
6.5
     
3.81
     
98,572
     
6.5
 
$4.00
-
$4.99
   
951,791
     
9.0
     
4.56
     
399,541
     
8.5
 
$5.00
-
$10.00
   
187,775
     
7.4
     
7.35
     
112,009
     
7.6
 
$10.01
-
$34.00
   
50,150
     
2.4
     
17.81
     
50,150
     
2.4
 
 
 
 
   
1,413,988
     
8.1
    $
5.19
     
785,972
     
7.3