Stock Option Plans

9 Months Ended

Sep. 30, 2012

Stock Option Plans [Abstract]

STOCK OPTION PLANS

NOTE – 5 STOCK OPTION PLANS

A summary of option activity for employees under the plans and changes during the nine months ended September 30, 2012, is presented below:

	Number of Options		Weighted Averaged Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value
Outstanding, January 1, 2012		1,139,282	$	0.89		3.62	$	1,000
Granted		133,333		0.75		4.28		—
Exercised		—		—		—		—
Forfeited or expired		67,000		1.58		—		—
Outstanding, September 30, 2012		1,205,615		0.84		3.20		55,311
Exercisable, September 30, 2012		657,669		0.82		2.40		25,533

Milestone recognizes compensation expense on a straight line basis over the requisite service period. During the nine months ended September 30, 2012, Milestone recognized $86,158 of total compensation cost. As of September 30, 2012, there was $129,989 of total unrecognized compensation cost related to non-vested options which Milestone expects to recognize over a weighted average period of 2.75 years. A six percent rate of forfeiture is assumed in the calculation of the compensation cost for the period.

Expected volatilities are based on historical volatility of Milestone’s common stock over a period commensurate with anticipated term. Milestone uses historical data to estimate option exercise and employee termination within the valuation model.

A summary of option activity for non-employees under the plans and changes during the nine months ended September 30, 2012, is presented below:

	Number of Options		Weighted Averaged Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value
Outstanding, January 1, 2012		414,999		1.87		1.43	$	12,000
Granted		—		—		—		—
Exercised		—		—		—		—
Forfeited or expired		175,000		2.29		—		—
Outstanding, September 30, 2012		239,999		1.56		1.57		32,200
Exercisable, September 30, 2012		224,443		1.67		1.51		32,200

During the nine months ended September 30, 2012, Milestone recognized $2,023 of expenses related to non-employee options that vested during the year. The total unrecognized compensation cost related to non-vested options was $206 as of September 30, 2012. A six percent rate of forfeiture is assumed in the calculation of the compensation cost for the period.

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 as consideration for goods or services received by Milestone 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 of any options or similar equity instruments issued is estimated based on the Black-Scholes option-pricing model, and the assumption that all of the options or other equity instruments will ultimately vest. Such 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 capitalized or expensed as if Milestone had paid cash for the goods or services.