Note 5 - Stock Option Plans

6 Months Ended

Jun. 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 six months ended June 30, 2016 and 2015, Milestone Scientific recognized $266,601 and $226,844 of total employee compensation cost related to options that vested each year, respectively. As of June 30, 2016 and 2015, there was $884,183 and $995,813, respectively, of total unrecognized compensation cost related to non-vested options.

 Milestone Scientific expects to recognize these cost over a weighted average period of 2.74 years and 2.10 years as of June 30, 2016 and 2015, respectively.

A summary of option activity for employees under the plans and changes during the six months ended June 30, 2016, is presented below:

	Number of Options		Weighted Averaged Exercise 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		4.85		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding, June 30, 2016		1,768,344		1.59		2.74		2,099,051
Exercisable, June 30, 2016		1,170,718		1.36		2.43		1,721,587

A summary of option activity for non-employees under the plans and changes during the six months ended June 30, 2016, is presented below:

	Number of Options		Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Outstanding, January 1, 2016		8,333		2.70		4.83		-
Granted		200,000		2.55		1.59		-
Expired		-		-		-		-
Exercised		-		-		-		-
Outstanding, June 30, 2016		208,333		2.56		4.58		50,833
Exercisable, June 30, 2016		2,777		2.70		4.33		-

The fair value of the 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 significant disincentive for non-performance until performance is completed. As of June 30, 2016, Milestone Scientific recognized $8,421 expense related to non-employee options. As of June 30, 2016 there was a total of $514,792 unrecognized compensation cost related to non-vested options which the company expects to recognize over a weighted average period of 5.7 years. There was no compensation cost for the six month ended June 30, 2015.

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 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 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 re-measured at each reporting period whether capitalized or expensed as if Milestone Scientific had paid cash for the goods or services.