NOTE

9—

STOCKHOLDERS' EQUITY

Public Offering and Private Placement

In the

second

quarter of

2020,

the Company completed

two

public offerings. In

April 2020,

a Common Stock offering generating gross proceeds of approximately

$5.1

million (

5,420,000

common shares and

2,710,000

warrants). The combined price of the shares and warrants was

$0.95

per share. The warrants are exercisable at a price of

$1.20

per share and have an expiration of

three

(

) years from the issue date. In

June 2020,

the Company completed a

second

Common Stock offering generating gross proceeds of approximately

$14.6

million (

6,770,000

common shares and

3,749,000

warrants). The combined price of the shares and warrants was

$2.15

per share. The warrants are exercisable at

$2.60

and expire

three

(

) years from the issue date.

Warrants

The following table summarizes information about shares issuable under warrants outstanding as of

March 31, 2021

	Warrant shares outstanding			Weighted Average exercise price		Weighted Average remaining life		Intrinsic value

Outstanding at January 1, 2021		6,369,396		$	1.49	$	2.48	$	2,784,117
Issued		-
Exercised		(1,918,925	)		1.57		-		4,044,164
Expired or cancelled		-			-		-		-
Outstanding and exercisable at March 31, 2021		4,450,471		$	2.14	$	2.26	$	6,381,930

The following table summarizes information about shares issuable under warrants outstanding as of

March 31, 2020

	Warrant shares outstanding			Weighted Average exercise price		Weighted Average remaining life		Intrinsic value

Outstanding at January 1, 2020		1,074,171		$	0.50	$	4.10	$	956,012
Issued		-			-		-
Exercised		(460,725	)		0.50		-		630,389
Expired or cancelled		-			-		-		-
Outstanding and exercisable at March 31, 2020		613,446		$	0.50	$	3.85	$	460,085

Shares to Be Issued

As of

March 31, 2021

and

2020

, there were

2,264,127

and

2,306,698

shares to be issued whose issuance has been deferred to the interim Chief Executive Officer, former Chief Financial Officer, and other employees of Milestone Scientific, respectively.

As of

March 31, 2021

and

2020

, there were

144,024

and

159,835

shares, respectively, to be issued to non-employees, that will be issued for services rendered. The number of shares was fixed at the date of grant and were fully vested upon grant date.

The following table summarizes information about shares to be issued on

March 31, 2021

and

2020

, respectively.

	March 31, 2021			March 31, 2020

Shares-to-be-issued, outstanding January 1, 2021 and 2020, respectively		2,440,878			2,375,760
Granted in current period		33,238			102,768
Issued in current period		(65,965	)		(11,995	)
Shares-to be issued outstanding March 31, 2021 and 2020, respectively		2,408,151			2,466,533

Stock Options Plans

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.

Generally, options become exercisable over a

three

-year period from the grant date and expire

five

years after the date of grant. As of

March 31, 2021,

and

December 31, 2020,

the Company had

293,505,

and

424,425,

respectively, remaining options available for grants.

The Milestone Scientific Inc.

2020

Equity Compensation Plan (the "Plan") provides for awards of restricted common stock

and options to purchase up to a maximum

2,000,000

shares of common stock and expires in

December 2030.

Options

may

be granted to employees, directors, and consultants of Milestone Scientific for the purchase of shares of common stock at a price

not

less than the fair market value of common stock on the date of 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

shares a granted under this plan as

March 31, 2021

December 31, 2020,

respectively.

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

three

months ended

March 31, 2021

and

2020,

Milestone Scientific recognized

$113,507

and

$56,988

of total employee compensation cost, respectively. As of

March

31,2021

there was

$914,389

of total unrecognized compensation cost related to non- vested options. Milestone Scientific expects to recognize these costs over a weighted average period of

2.7

years

A summary of option activity for employees under the plans and changes during the years ended

March 31, 2021

and

2020

is presented below:

	Number of Options	Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding January 1, 2021	1,953,443		1.88		3.09		476,964
Granted	32,175		3.11		-		-
Exercised during 2021	-		-		-		-
Forfeited or expired	(435,558)		1.58		-		-
Options outstanding March 31, 2021	1,550,060		1.98		3.62		2,457,153
Exercisable, March 31, 2021	745,045		1.93		2.60		1,222,127

The Company used the following assumptions to calculate the fair value of the stock option grants using the Black-Scholes option pricing model on the measurement date during the

three

month period ended

March 31, 2021,

risk free interest rate of

1.42%

, Volatility of

89.46%

(which is based on the Company's historical volatility over the expected term), expected term of

years,

dividend rate and closing price of the stock of

$3.11

	Number of Options	Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding January 1, 2020	1,212,442		1.71		2.40		-
Granted	-		-		-		-
Exercised during 2020	-		-		-		-
Forfeited or expired	-		-		-		-
Options outstanding March 31, 2020	1,212,442		1.71		2.40		-
Exercisable, March 31, 2020	1,117,829		1.84		1.84		-

A summary of option activity for non-employees under the plans and changes during the years ended

March 31, 2021

and

2020

is presented below:

	Number of Options	Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding January 1, 2021	74,997		1.41		3.18		54,748
Granted	16,666		4.30
Exercised during 2021	-		-		-		-
Options outstanding March 31, 2021	91,663		1.87		3.30		161,660
Exercisable, March 31, 2021	52,769		1.34		2.37		117,829

	Number of Options	Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding January 1, 2020	49,998		1.87		2.94		-
Granted	8,333		1.65				-
Exercised during 2020	-		-		-		-
Options outstanding March 31, 2020	58,331		1.87		2.94
Exercisable, March 31, 2020	41,663		1.71		2.03		84,579

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

three

months ended

March 31 ,2021

and

2021,

Milestone Scientific recognized approximately

$10,329

and $-

zero

expense related to non-employee options, respectively.

The Company used the following assumptions to calculate the fair value of the stock option grants using the Black-Scholes option pricing model on the measurement date during the

three

months ended

March 31, 2021,

risk free interest rate of

0.2%

1.41

%, Volatility of

86.97%

89.90%,

expected term of

years,

dividend rate and closing price of the stock of

$3.57

$4.30