Note 8 - Stockholders' Equity

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE 8— STOCKHOLDERS’ EQUITY

Warrants

The following table summarizes information about shares issuable under warrants outstanding as of June 30, 2022

	Warrant shares outstanding		Weighted Average exercise price		Weighted Average remaining life		Intrinsic value
Outstanding at January 1, 2022		4,268,221		2.18		1.50		1,187,546
Issued		-		-		-		-
Exercised		-		-		-		-
Outstanding and exercisable at June 30, 2022		4,268,221		2.18		1.00		130,704

Shares to Be Issued

As of June 30, 2022, and 2021, there were 1,852,789 and 2,264,127 shares respectively, to be issued whose issuance has been deferred to the employees of Milestone Scientific, Inc. respectively.  As of June 30, 2022, and 2021, there were 174,364 and 144,024 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 June 30, 2022, and 2021, respectively.

	June 30, 2022			June 30, 2021
Shares-to-be-issued, outstanding January 1, 2022 and 2021, respectively		2,066,343			2,428,329
Granted in current period		108,148			33,238
Issued in current period		(147,338	)		(53,416	)
Shares-to be issued outstanding June 30, 2022 and 2021, respectively		2,027,153			2,408,151

Stock Options Plans

The Milestone Scientific Inc. 2020 Equity Compensation Plan, as amended and restated (the "2020 Plan"), provides for awards of restricted common, stock restricted stock units, options to purchase and other awards, up to a maximum 4,000,000 shares of common stock and expires in June 2031. 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. 

On April 8, 2021, as part of its Succession Plan going into effect on April 23, 2021, the Company announced that Leonard Osser, the Interim Chief Executive Officer, would be accepting the role of Vice Chairman of the Board of Directors. As part of accepting this role, he would be granted options to purchase 2,000,000 shares of common stock, exercisable at the fair market value of the common stock on the date of grant, vesting over the five-year period after he steps down as Interim Chief Executive Officer of the Company or ten years from the date of grant, whichever shall end first. The options were issued pursuant to the 2020 Plan.

Milestone Scientific recognizes stock compensation expense over the requisite service period. For three and  six months ended June 30, 2022 Milestone Scientific recognized approximately $223,000, and $501,000 of total employee stock compensation cost, respectively, recorded in general and administrative expenses on the statement of operations. For three and  six months ended June 30, 2021 Milestone Scientific recognized approximately $168,000, and $286,000 of total employee stock compensation cost, respectively, recorded in general and administrative expenses on the statement of operations.

As of June 30, 2022 and 2021, there was approximately $2.9 million and $3.5 million of total unrecognized compensation cost related to non- vested options, respectively. Milestone Scientific expects to recognize these costs over a weighted average period of 3.00. 

A summary of option activity for employees under the plans and changes during the six months ended June 30, 2022, is presented below:        

	Number of Options		Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding January 1, 2022		2,843,693		2.39		7.69		49,246
Granted during 2022		216,296		1.52		2.48		-
Exercised during 2022		-		-		-		-
Forfeited or expired during 2022		-		-		-		-
Options outstanding June 30, 2022		3,059,989		2.29		6.88		-
Exercisable, June 30, 2022		994,914		2.18		5.53		-

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 six months ended June 30, 2022 , risk free interest rate of 2.45%, Volatility of 89.76% (which is based on the Company’s historical over the expected term), expected term 3 years, dividend rate 0% and closing price of the Company’s common stock was $1.52.

A summary of option activity for non-employees under the plans and changes during the six months ended June 30, 2022 presented below:        

	Number of Options		Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding January 1, 2022		83,330		1.85		3.33		49,748
Granted during 2022		-		-		-		-
Exercised during 2022		-		-		-		-
Options outstanding June 30, 2022		83,330		1.85		2.83		7,471
Exercisable, June 30, 2022		69,442		1.68		2.62		7,471

For the three and six months ended  June 30, 2022, Milestone Scientific recognized approximately $5,000 and $10,000 expense related to non-employee options, respectively. For the three and six months ended  June 30, 2021, Milestone Scientific recognized approximately $5,000 and $15,000 expense related to non-employee options, respectively.

The information below summarizes the restricted stock award activity for year ended June 30, 2022 .

	Number of Shares			Weighted Average Grant-Date Fair Value per Award
Non-vested as January 1, 2022		96,557			2.33
Granted		975,148			0.86
Vested		(224,850	)		-
Cancelled		(92,017	)		-
Non-vested as June 30, 2022		754,838			1.20

As of June 30, 2022, there were 80,292 restricted shares granted and deferred under the terms of an employment agreements with the Territory Manager of Milestone Scientific, Inc. Such shares will be issued to each party upon completion of 2 years of employment. For the three and six months ended June 30, 2022, the Company recognized negative stock compensation of approximately $54,000 and $27,000, respectively, due to termination of certain employees who had not vested in their grant in the current period. For the three and six months ended June 30, 2021, the Company recognized stock compensation expense of approximately $21,000. As of June 30, 2022, the total unrecognized stock compensation expense was $86,458 related to non-vested restricted stock awards, which the Company expects to recognize over an estimated weighted average period of 1.41 years.

As of June 30, 2022 the Company entered in a restricted stock agreements with the members of the Board of Directors of the Company. The Company granted 899,300  restricted stock awards with a fair market value of $0.82 per share. The restricted stock vest as follows: twenty-five percent (25%) shall be vested on the grant date, and twenty-five percent (25%) shall vest quarterly, which will be on the first day of the following months; October 2022, January 2023, and April 2023. These awards will vest immediately upon a change of control as defined in the agreements For the three and six months ended June 30, 2022 the Company recognized approximately $213,000  for restricted stock expenses recorded in general and administrative expenses on the statement of operation.