Annual report pursuant to Section 13 and 15(d)

Note L - Stock Option Plans

v3.19.1
Note L - Stock Option Plans
12 Months Ended
Dec. 31, 2018
Notes to Financial Statements  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
NOTE L — STOCK OPTION PLANS
  
The
2004
Stock Option Plan provided for the grant of options to purchase up to
750,000
shares of Milestone Scientific's common stock. Options
may
be granted to employees, officers, directors and consultants of Milestone Scientific for the purchase of common stock at a price
not
less than the fair market value of the common stock on the date of the grant. In general, options become exercisable over a
three
-year period from the grant date and expire
five
years after the date of grant. There were 
no
shares available for grant at
December 31, 2018
or
2017
under this plan.
 
In
June 2011,
the stockholders of Milestone Scientific approved the
2011
Stock Option Plan (the
"2011
Plan") which originally provided for stock options to our employees, directors and consultants and incentive and non-qualified stock options to purchase up to
2,000,000
shares of common stock and was later amended in
2016
to increase the maximum number of shares reserved for grant to
4,000,000.
In general, options become exercisable over a
three
-year period from the grant date and expire
five
years after the date of grant.  
 
Milestone Scientific recognizes compensation expense over the requisite service period and in the case of performance-based options over the period of the expected performance. For the
twelve
months ended
December 31, 2018
and
2017,
Milestone Scientific recognized
$398,301
and
$636,058
of total employee compensation cost, respectively. As of
December 31, 2018
and
2017,
there was
$263,974
 and
$603,979
of total unrecognized compensation cost related to non- vested options, respectively. Milestone Scientific expects to recognize these costs over a weighted average period of
1.75
 years and
3.04
years as of
December 31, 2018
and
2017,
respectively.     
 
A summary of option activity for employees under the plans and changes during the years ended
December 31, 2018
and
2017
is presented below:        
 
   
Number of Options
   
Weighted Averaged Exercise Price $
   
Weighted Average Remaining Contractual Life (Years)
   
Aggregate Intrinsic Options Value $
 
Options outstanding December 31, 2016
   
1,511,995
     
1.74
     
2.97
     
102,605
 
Granted
   
1,806,741
     
1.82
     
4.69
     
25,610
 
Exercised during 2017
   
(83,333
)    
0.75
     
-
     
-
 
Forfeited or expired
   
(1,250,068
)    
-
     
-
     
-
 
Options outstanding December 31, 2017
   
1,985,335
     
1.74
     
3.04
     
25,160
 
Exercisable, December 31, 2017
   
1,317,441
     
1.84
     
2.46
     
8,537
 
Granted
   
-
     
-
     
-
     
-
 
Exercised during 2018
   
-
     
-
     
-
     
-
 
Forfeited or expired
   
(315,114
)    
1.50
     
-
     
-
 
Options outstanding December 31, 2018
   
1,670,221
     
1.71
     
2.40
     
-
 
Exercisable, December 31, 2018
   
1,317,632
     
1.79
     
2.15
     
-
 
 
The weighted-average fair value of the options granted during
2018
 and
2017
 was estimated at 
$0
 and
$1.73
 respectively, on the date of grant. The fair value for
2018
and
2017
was determined using the Black-Scholes option-pricing model with the following  assumptions:   
   
2018
   
2017
 
                 
Volatility
   
-
     
81.23%-97.24%
 
Risk-free interest
   
-
     
1.4%-2.2%
 
Expected Life
 
-
   
2-5 years
 
Dividend yield
   
-
     
0
%
Forfeiture Rate
   
-
     
6
%
 
A summary of option activity for non-employees under the plans and changes during the years ended
December 31, 2018
and
2017,
is presented below:
    
   
Number of Options
   
Weighted Averaged Exercise Price $
   
Weighted Average Remaining Contractual Life (Years)
   
Aggregate Intrinsic Options Value $
 
Options outstanding December 31, 2016
   
224,999
     
2.53
     
5.32
     
-
 
Granted
   
-
     
-
     
-
     
-
 
Exercised during 2017
   
-
     
-
     
-
     
-
 
Forfeited or expired
   
-
     
-
     
-
     
-
 
Options outstanding December 31, 2017
   
224,999
     
2.53
     
4.32
     
-
 
Exercisable, December 31, 2017
   
23,067
     
2.22
     
4.38
     
-
 
Granted    
8,333
     
0.75
     
4.33
     
 
 
Exercised during 2018    
-
     
-
     
-
     
-
 
Forfeited or expired
   
(200,000
)    
2.55
     
-
     
-
 
Options outstanding December 31, 2018
   
33,332
     
1.87
     
2.94
     
-
 
Exercisable, December 31, 2018
   
27,777
     
2.10
     
2.66
     
-
 
 
The fair value of the non-employee options was estimated on the date of grant using the Black Scholes option-pricing model at the date of grant. For the
twelve
months ended
December 31, 2018
and
2017,
Milestone Scientific recognized
$10,720
and
$9,384
expense related to non-employee options, respectively.