Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and related notes have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and in accordance with accounting principles generally accepted in the United States (“US GAAP”). The financial statements include the accounts of Anika Therapeutics, Inc. and its subsidiaries. Inter-company transactions and balances have been eliminated. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to SEC rules and regulations relating to interim financial statements. The

December 31, 2017

balances reported herein are derived from the audited consolidated financial statements. In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to fairly state the condensed consolidated financial position of the Company as of

September 30, 2018,

the results of its operations for the

three

- and

nine

-month periods ended

September 30, 2018

and

2017,

and cash flows for the

nine

-month periods ended

September 30, 2018

and

2017.

The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s annual financial statements filed with its Annual Report on Form

-K for the year ended

December 31, 2017.

The results of operations for the

three

- and

nine

-month periods ended

September 30, 2018

are

not

necessarily indicative of the results to be expected for the year ending

December

31,

2018.

At the Company’s annual stockholders’ meeting on

May 31, 2018,

the Company’s stockholders approved an increase in the number of shares of common stock that the Company is authorized to issue from

million to

million and ratified a change in the Company’s state of incorporation from the Commonwealth of Massachusetts to the State of Delaware, pursuant to a plan of domestication. The Company became a Delaware corporation with the authorization to issue up to

million shares of its common stock on

June 6, 2018.

Upon its domestication in Delaware, the affairs of the Company became subject to the Delaware General Corporation Law, the Company implemented a new certificate of incorporation and new bylaws, and each previously outstanding share of the Company’s common stock as a Massachusetts corporation (Anika Massachusetts) converted into an outstanding share of common stock of the Company as a Delaware corporation (Anika Delaware). The domestication was a tax-free reorganization under the U.S. Internal Revenue Code, and it did

not

affect the Company’s business operations.

Recent Accounting Pronouncements

February 2016,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

No.

2016

02,

Leases

(Topic

842

), which amends existing leasing accounting requirements. The most significant change will result in the recognition of lease assets and lease liabilities by lessees for virtually all leases. The new guidance will also require significant additional disclosures about the amount, timing, and uncertainty of cash flows from leases. ASU

2016

is effective for fiscal years and interim periods beginning after

December 15, 2018.

Upon adoption, entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Early adoption is permitted, and a number of optional practical expedients

may

be elected to simplify the impact of adoption. The Company has commenced work to assess ASU

2016

and the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures. The Company anticipates recognition of material additional assets and corresponding liabilities related to the Company’s leases on its consolidated balance sheet.

August 2018,

the FASB issued ASU

No.

2018

15,

Intangibles – Goodwill and Other – Internal-Use Software

(Subtopic

350

), which amends ASU

No.

2015

05,

Customers Accounting for Fees in a Cloud Computing Agreement,

to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. The most significant change will align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal-use software license. Accordingly, the amendments in ASU

2018

require an entity in a hosting arrangement that is a service contract to follow the guidance in Subtopic

350

to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. ASU

2018

is effective for fiscal years and interim periods beginning after

December 15, 2019.

Early adoption is permitted, including adoption in any interim period for all entities. The Company is assessing ASU

2018

and the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures.