Note 6 - Stockholders' Equity

9 Months Ended

Sep. 30, 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.

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.

Warrants

The following table summarizes information about shares issuable under warrants outstanding as of September 30, 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 September 30, 2024		-			-		-		-

During the nine months ended September 30, 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.

Shares to Be Issued

As of September 30, 2024 and 2023, respectively, there were 2,657,058 and 2,426,364 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 September 30, 2024 and 2023, respectively, there were 527,625 and 382,696 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 nine months periods ending September 30, 2024 and 2023.

	September 30, 2024			September 30, 2023
Shares-to-be-issued, outstanding January 1, 2024 and 2023, respectively		3,098,917			2,440,673
Granted in current period		438,868			368,387
Issued in current period		(353,102	)		-
Shares-to be issued outstanding September 30, 2024 and 2023, respectively		3,184,683			2,809,060

Stock Options Plans

The Milestone Scientific Inc., Amended and Restated 2020 Equity Incentive Plan (the “2020 Plan”), provides for awards of restricted common stock restricted stock units, options to purchase and other awards.  On June 28, 2023 the 2020 Plan was amended and restated to increase the maximum shares that can be issued thereunder 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. For the three and nine months ended September 30, 2024, Milestone Scientific recognized approximately $172,000 and $530,000 of total employee compensation cost, respectively, recorded in general and administrative expenses on the statement of operations. For the three and nine months ended September 30, 2023, Milestone Scientific recognized approximately $321,000 and $1.1 million of total employee compensation cost, respectively, recorded in general and administrative expenses on the statement of operations.

As of September 30, 2024, there was $1.0 million of total unrecognized compensation cost related to non-vested options. Milestone Scientific expects to recognize these costs over a weighted average period of 1.5 years.

A summary of option activity for employees under the plans and changes during the  nine months ended September 30, 2024 is presented below:

	Number of Options		Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding at January 1, 2024		3,036,989		2.29		5.41		-
Granted during 2024		-		-				-
Exercised during 2024		-		-		-		-
Forfeited or expired during 2024		-		-		-		-
Options outstanding September 30, 2024		3,036,989		2.32		4.66		-
Exercisable, September 30, 2024		2,188,433		2.29		4.06		-

A summary of option activity for non-employees under the plans and changes during the nine months ended September 30, 2024  is presented below:

	Number of Options			Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding at January 1, 2024		91,663			1.76		2.25		2,833
Granted during 2024		24,999			0.84		4.71		-
Exercised during 2024		-			-		-		-
Forfeited or expired during 2024		(16,666	)		0.55		-		-
Options outstanding September 30, 2024		99,996			1.74		2.37		4,083
Exercisable, September 30, 2024		77,772			1.99		1.81		1,916

For the three and nine months ended September 30, 2024, Milestone Scientific recognized approximately $7,000 and $9,200 respectively of expense related to non-employee options. For the three and nine months ended September 30, 2023, Milestone Scientific recognized approximately $3,800 and$17,000, respectively of expense related to non-employee options.

The information below summarizes the restricted stock award activity for the nine months ended September 30, 2024.

	Number of Shares			Weighted Average Grant-Date Fair Value per Award
Non-vested as January 1, 2024		327,937			0.91
Granted		730,340			0.89
Vested		(510,522	)		0.91
Cancelled		-			-
Non-vested as September 30, 2024		547,755			0.89

As of September 30, 2024, all restricted shares granted and deferred under the terms of employment agreements with each Territory Manager of Milestone Scientific are fully vested. For the three and nine months ended September 30, 2024, the Company recognized stock compensation expense of approximately $0 and $2,100 respectively. For the three and nine months ended September 30, 2023, the Company recognized stock compensation expense of approximately negative $36,500 and $17,700 respectively. For the nine months ended September 30, 2024, there was no unrecognized compensation expense. 

As of  July 16, 2024, the Company entered into restricted stock agreements with members of the Board of Directors of the Company. The Company granted 730,340 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 July 2024, and 25% quarterly, on the first day of the following months:  October 2024,  January 2025, and  April 2025.For the three and nine months ended September 30, 2024,  the Company recognized approximately $306,000 and $464,000, respectively, for restricted stock expenses recorded in general and administrative expenses on the statement of operations. For the nine months ended September 30, 2024, there was $344,000 of total unrecognized compensation cost related to non-vested restricted stock grant, which the Company expects to recognize these costs over a weighted average period of 0.5 years.