Quarterly report pursuant to Section 13 or 15(d)

Note 5 - Stock Option Plans

v3.5.0.2
Note 5 - Stock Option Plans
9 Months Ended
Sep. 30, 2016
Notes to Financial Statements  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
NOTE
– 5
Stock Option Plans
 
 
           Milestone Scientific recognizes compensation expense on a straight line basis over the requisite service period and in the case of performance based options over the period of the expected performance. For the three months ended September 30, 2016 and 2015, Milestone Scientific recognized $81,678 and $107,205 of total employee compensation cost, respectively. For the nine months ended September 30, 2016 and 2015, Milestone Scientific recognized $357,934 and $334,049 of total employee compensation cost, respectively. As of September 30, 2016 and 2015, there was $580,331 and $881,765
 
respectively, of total unrecognized compensation cost related to non-vested options.  Milestone Scientific expects to recognize these cost over a weighted average period of 2.49 years and 3.59
years as of September 30, 2016 and 2015, respectively.
 
 
           A summary of option activity for employees under the plans and changes during the nine months ended September 30, 2016, is presented below:
 
   
Number of Options
 
Weighted
Averaged Exercised Price
 
Weighted
Average Remaining Contractual Life (Years)
 
Aggregate
Intrinsic Options Value $
Outstanding
January 1, 2016
  1,419,436    $ 1.56   2.78   $1,220,338
                 
Granted
  348,908   1.72   4.35   376,821
                 
Forfeited or Expired
  (100,000 ) 2.50       -
                 
Exercised
  -   -   -   -
                 
Outstanding September 30, 2016
  1,668,344   $1.54   2.44   $1,147,015
                 
Exercisable September 30, 2016
  1,170,718   $1.36   1.95   $999,904
 
A summary of option activity for non-employees under the plans and changes during the nine months ended September 30, 2016, is presented below:
 
 
   
Number of Options
 
Weighted
Averaged Exercised Price
 
Weighted
Average Remaining Contractual Life (Years)
 
Aggregate
Intrinsic Options Value $
Outstanding
January 1, 2016
  8,333   $2.70   4.83   $-
                 
Granted
  208,333   2.55   0.00   -
                 
Forfeited or Expired
  -   0.00   0.00   -
                 
Exercised
  -   -   -   -
                 
Outstanding September 30, 2016
  216,666   $2.55   5.58   $-
                 
Exercisable September 30, 2016
  555   $2.52   4.51   $-
 
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.
  In accordance with the provisions of FASB ASC 505 Milestone Scientific will re-measure the value of the grant at each presentation date unless there is a significant disincentive for non-performance or until performance is completed. For the three and nine months ended September 30, 2016, Milestone Scientific recognized  $2,807 and $8,421 expense related to non-employee options. During the three and nine months ended September 30, 2015, Milestone Scientific had no expense related to non-employee options. As of September 30, 2016, there was a total of $359,485 unrecognized compensation cost related to non-vested options which the company expects to recognize over a weighted average period of 5.5 years.
 
In accordance with the provisions of FASB ASC 505-50-15, all other issuances of common stock, stock options or other equity instruments to non-employees a
s consideration for goods or services received by Milestone Scientific are accounted for based on the fair value of the equity instruments issued (unless the fair value of the consideration received can be more reliably measured). The fair value is measured as of an appropriate date pursuant to the guidance, (generally, the earlier of the date the other party becomes committed to provide goods or services or the date of performance by the other party is complete) and re-measured at each reporting period whether capitalized or expensed as if Milestone Scientific had paid cash for the goods or services.