Note I - Stock Option Plans

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

NOTE I — STOCK OPTION PLANS

The Milestone Scientific Inc., Amended and Restated 2020 Equity Incentive Plan, provides for awards of restricted common, stock restricted stock units, options to purchase and other awards.  On June 28, 2023 the plan was amended and restated (the "2020 Plan") the maximum 4,000,000 common stock share was increased to 11,500,000 shares of common stock. The plan 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. Generally, options become exercisable over a three-year period from the grant date and expire five years after the date of grant. As of December 31, 2023 and 2022, the Company had 9,174,520 and 323,190, respectively, remaining options available for grants under the Plan.

Milestone Scientific recognizes compensation expenses over the requisite service period and in the case of performance-based options over the period of the expected performance. For the years ended December 31, 2023 and 2022, Milestone Scientific recognized approximately $0.9 million and $1.0 million of total employee compensation cost, respectively, recorded in general and administrative expenses on the statement of operations.

As of December 31, 2023, there was $1.5 million of total unrecognized compensation cost related to non-vested options. Milestone Scientific expects to recognize these costs over a weighted average period of 2.3 years.

A summary of option activity for employees under the plans and changes the year ended  December 31, 2023 is presented below:

	Number of Options			Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding January 1, 2023		3,059,989			2.36		6.38		-
Granted during 2023		-			-		-		-
Exercised during 2023		-			-		-		-
Forfeited or expired during 2023		(23,000	)		-		-		-
Options outstanding December 31, 2023		3,036,989			2.29		5.41		-
Exercisable, December 31, 2023		1,732,084			2.21		4.34		-

There were no options granted to employees during the year ended December 31, 2023.   

A summary of option activity for non-employees under the plans and changes during the year ended  December 31, 2023 is presented below:

	Number of Options			Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding January 1, 2023		91,663			1.75		2.55		1,083
Granted during 2023		8,333			0.89		4.21		-
Exercised during 2023		(8,333	)		0.75		-		-
Options outstanding December 31, 2023		91,663			1.76		2.25		2,833
Exercisable, December 31, 2023		83,332			1.86		1.79		2,833

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 years ended December 31, 2023 and 2022, Milestone Scientific recognized approximately $19,700 and $22,900 expense related to non-employee options, respectively.

A summary of restricted stock under the plans and changes during the year ended  December 31, 2023 is presented below:

	Number of Shares			Weighted Average Grant-Date Fair Value per Award
Non-vested as January 1, 2023		435,293			1.18
Granted		617,978			0.89
Vested		(694,658	)		-
Cancelled		(30,676	)		-
Non-vested as December 31, 2023		327,937			0.91

As of December 31, 2023, there were 18,947 restricted shares granted and deferred under the terms of an employment agreement with the Territory Manager of Milestone Scientific. Such shares will be issued to each party upon completion of 2 years of employment. For the years ended December 31, 2023 and 2022, the Company recognized negative stock compensation expense of approximately ($15,000) and $(20,000), respectively. As of December 31, 2023, the total unrecognized compensation expense was $2,000 related to unvested restricted stock awards for Territory Managers, which the Company expects to recognize over an estimated weighted-average period of 0.21 years.

As of  December 31, 2023, the Company entered into restricted stock agreements with members of the Board of Directors of the Company. The Company granted 617,978 restricted stock awards with a fair market value of $0.89 per share. Such restricted stock vests as follows: 25% on the grant date in June 2023, and 25% quarterly, on the first day of the following months:   October 2023,  January 2024, and  April 2024. These awards vest immediately upon a change of control as defined in the agreements. For the year ended  December 31, 2023, the Company recognized approximately $576,000 for restricted stock expenses recorded in general and administrative expenses on the statement of operation. As of  December 31, 2023, the total unrecognized stock compensation expense was approximately $132,000 related to non-vested restricted stock awards with the members of the Board of Directors, which the Company expects to recognize over an estimated weighted average period of 0.25 years.