Note 6 - Stockholders' Equity

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Equity [Text Block]

NOTE 6— STOCKHOLDERS’ EQUITY

Public offering

On  December 10, 2023, the Company completed a public offering for sale of 4,765,000 common stock, at $0.63 per share which generated net proceeds of approximately $2.6 million. In addition, the Company granted the Underwriter a 45-day option to purchase up to an additional 714,750 shares of Common Stock at the same price to cover over-allotments.

In connection with the Company's capital raise on  December 10, 2023, on  January 12, 2024 the underwriter exercised its over-allotment option as to 372,110 shares of common stock for net proceeds after discounts and commission of $192,156.

During the three months ended March 31, 2024, the Company issued 103,500 shares of common stock for warrants issued in 2019. The warrants were exercised at $0.50 for proceeds of $51,751.

Warrants

The following table summarizes information about shares issuable under warrants outstanding as of March 31,2024:

	Warrant shares outstanding			Weighted Average exercise price		Weighted Average remaining life		Intrinsic value
Outstanding at January 1, 2024		314,572			0.50		0.10		59,737
Issued		-			-		-		-
Exercised		(103,500	)		0.50		-		-
Expired or cancelled		(211,072	)		0.50		-		-
Outstanding and exercisable at March 31, 2024		-			-		-		-

Shares to Be Issued

As of March 31, 2024 and 2023, there were 2,979,994 and 2,136,101 shares issuable, the issuance of which has been deferred under the terms of employment agreements with the Chief Executive Officer and other employees of Milestone Scientific. Such shares are issuable to each party upon termination of their respective employment.

As of March 31, 2024 and 2023, there were 527,624 and 382,697 shares issuable to non-employees, 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 activity for shares to be issued for the three months periods ending March 31, 2024 and 2023.

	March 31, 2024			March 31, 2023
Shares-to-be-issued, outstanding January 1, 2024 and 2023, respectively		3,098,917			2,440,673
Granted in current period		438,868			78,125
Issued in current period		(30,167	)		-
Shares-to be issued outstanding March 31, 2024 and 2023, respectively		3,507,618			2,518,798

Stock Options 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. 

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. As of March 31, 2024 and 2023, Milestone Scientific recognized approximately $175,000 and $362,000 of total employee compensation cost, respectively, recorded in general and administrative expenses on the statement of operations.

As of March 31, 2024, there was $1.4 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 three months ended March 31, 2024 is presented below:

	Number of Options		Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding January 1, 2024		3,036,989		2.29		5.41		-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Options outstanding March 31, 2024		3,036,989		2.29		5.16		-
Exercisable, March 31, 2024		1,788,433		2.24		3.96		-

A summary of option activity for non-employees under the plans and changes during the three months ended March 31, 2024 presented below:

	Number of Options			Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding January 1, 2024		91,633			1.76		2.25		2,833
Granted		8,333			0.64		4.85		-
Exercised		-			-		-		-
Forfeited or expired		(8,333	)		0.35		-		-
Options outstanding March 31, 2024		91,633			1.79		2.19		-
Exercisable, March 31, 2024		80,551			1.94		1.90		-

For the three months ended March 31, 2024 and 2023, Milestone Scientific recognized approximately $1,100 and $7,800, respectively of expense related to non-employee options.

The information below summarizes the restricted stock award activity for the three months ended March 31, 2024.

	Number of Options			Weighted Averaged Exercise Price $
Non-vested as of January 1, 2024		327,937			0.91
Granted		-			-
Vested		(173,443	)		0.94
Forfeited or expired		-			-
Non-vested as of March 31, 2024		154,494			0.89

As of March 31, 2024, all restricted shares granted and deferred under the terms of employment agreements with each Territory Manager of Milestone Scientific are fully vested. Such shares are expected to be issued to each party upon completion of two years of employment. For the three months ended March 31, 2024, and 2023, the Company recognized stock compensation expense of approximately $2,100 and $9,400 respectively. For the three months ended March 31, 2024, there was no unrecognized compensation expense. 

As of  June 28, 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 three months ended March 31, 2024, and 2023, the Company recognized approximately $137,500 and $140,000, respectively, for restricted stock expenses recorded in general and administrative expenses on the statement of operations. For the three months ended March 31, 2024, there was no unrecognized compensation expense.