Quarterly report pursuant to Section 13 or 15(d)

Note 12 - Share-based Compensation

v3.22.2.2
Note 12 - Share-based Compensation
9 Months Ended
Sep. 30, 2022
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

12.

Share-Based Compensation

 

Amended and Restated 2019 Omnibus Incentive Plan

 

At the 2022 Annual General Meeting of Shareholders on May 18, 2022, our shareholders, upon recommendation of our Board of Directors (Board), approved the DiaMedica Therapeutics Inc. Amended and Restated 2019 Omnibus Incentive Plan (the 2019 Plan). The Board approved the 2019 Plan, subject to approval by our shareholders, on March 10, 2022.

 

 

The 2019 Plan permits the Board, or a committee or subcommittee thereof, to grant to the Company’s eligible employees, non-employee directors and certain consultants non-statutory and incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units, deferred stock units (DSUs), 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 over one to four years. Options granted to non-employees have a maximum term of five years and generally vest 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 4,000,000 shares. As of September 30, 2022, options to purchase an aggregate of 1,845,588 common shares were outstanding and 117,069 common shares were reserved for issuance upon settlement of DSUs under the 2019 Plan.

 

2021 Employment Inducement Incentive Plan

 

On December 3, 2021, the Board adopted the DiaMedica Therapeutics Inc. 2021 Employment Inducement Incentive Plan (Inducement Plan) to facilitate the granting of equity awards as an inducement material to new employees joining the Company. The Inducement Plan is administered by the Compensation Committee of the Board of Directors. The Board reserved 1,000,000 common shares of the Company for issuance under the Inducement Plan. The only persons eligible to receive awards under the Inducement Plan are individuals who are new employees and satisfy the standards for inducement grants under Nasdaq Listing Rule 5635(c)(4) or 5635(c)(3), as applicable. As of September 30, 2022, options to purchase an aggregate of 465,000 common shares were outstanding under the Inducement 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 September 30, 2022, options to purchase an aggregate of 465,410 common shares were outstanding under the Prior Plan.

 

Prior Deferred Stock Unit Plan

 

The DiaMedica Therapeutics Inc. Amended and Restated Deferred Stock Unit Plan (Prior DSU Plan) was terminated by the Board of Directors in conjunction with the shareholder approval of the 2019 Plan. Awards outstanding under the Prior DSU Plan remain outstanding in accordance with and pursuant to the terms thereof. As of September 30, 2022, there were 17,333 common shares reserved for issuance upon settlement of DSUs outstanding under the Prior DSU Plan.

 

Share-based compensation expense for each of the periods presented is as follows (in thousands):

 

   

Three Months Ended

September 30,

   

Nine Months Ended

September 30,

 
   

2022

   

2021

   

2022

   

2021

 

Research and development

  $ 126     $ 100     $ 325     $ 371  

General and administrative

    292       203       766       889  

Total share-based compensation

  $ 418     $ 303     $ 1,091     $ 1,260  

 

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, 2021

    1,896,600     $ 5.22     $ 169  

Granted

    989,398       2.61          

Expired/cancelled

    (57,813 )     8.78          

Forfeited

    (52,187 )     4.94          

Balances at September 30, 2022

    2,775,998     $ 4.15     $  

 

Information about stock options outstanding, vested and expected to vest as of September 30, 2022, 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)

 
$1.00 -

$1.99

    152,000       9.9     $ 1.50              
$2.00 -

$2.99

    800,398       8.3       2.50       170,852       4.7  
$3.00 -

$3.99

    409,393       7.5       3.80       193,766       5.8  
$4.00 -

$4.99

    862,182       6.7       4.57       805,349       6.6  
$5.00 -

$24.00

    552,025       7.4       6.85       294,525       6.2  
          2,775,998       7.6     $ 4.15       1,464,492       6.2