Stock Option Plans

6 Months Ended

Jun. 30, 2014

Stock Option Plans

NOTE – 6 Stock Option Plans

A summary of option activity for employees under the plans and changes during the six months ended June 30, 2014, is presented below:

					Weighted
			Weighted		Average		Aggregate
	Number		Averaged		Remaining		Intrinsic
	of		Exercise		Contractual		Options
	Options		Price $		Life (Years)		Value $
Outstanding, January 1, 2014		1,484,499		1.03		2.88		996,554
Granted		6,024		1.65		4.75		—
Exercised		135,000		0.48		—		—
Forfeited or expired		—		—		—		—
Outstanding, June 30, 2014		1,355,523		1.09		2.61		1,102,022
Exercisable, June 30, 2014		1,004,232		1.03		2.19		874,649

Milestone recognizes stock compensation expense on a straight line basis over the requisite service period. For the three months ended June 30, 2014, Milestone recognized $39,876 of total stock compensation cost. During the six months ended June 30, 2014, Milestone recognized $79,753 of total compensation. As of June 30, 2014, there was $315,368 of total unrecognized compensation cost related to non-vested options which Milestone expects to recognize over a weighted average period of 2.25 years. A six percent rate of forfeitures is assumed in the calculation of the compensation cost for the period.

Expected volatilities are based on historical volatility of Milestone’s common stock over a period commensurate with the anticipated term. Milestone uses historical data to estimate option exercise and employee termination within the valuation model.

A summary of option activity for non-employees under the plans and changes during the six months ended June 30, 2014, is presented below:

					Weighted
			Weighted		Average		Aggregate
	Number		Averaged		Remaining		Intrinsic
	of		Exercise		Contractual		Options
	Options		Price $		Life (Years)		Value $
Outstanding, January 1, 2014		173,332		0.48		0.59		210,833
Granted		—		—		—		—
Exercised		135,000		0.28		—		—
Forfeited or expired		—		—		—		—
Outstanding, June 30, 2014		38,332		1.20		0.66		26,999
Exercisable, June 30, 2014		38,332		1.20		0.66		26,999

During the six months ended June 30, 2014, Milestone had no expenses related to non-employee options that vested during the period. There was no unrecognized compensation cost related to non-vested options as of June 30, 2014.  

In accordance with the provisions of FASB ASC 505-50-15, all other issuances of common stock, stock options or other equity instruments to non-employees as consideration for goods or services received by Milestone are accounted for based on the fair value of the equity instruments issued (unless the fair value of the consideration received can be more reliably measured). The fair value of any options or similar equity instruments issued is estimated based on the Black-Scholes option-pricing model and the assumption that all of the options or other equity instruments will ultimately vest. Such fair value is measured as of an appropriate date pursuant to the guidance, (generally, the earlier of the date the other party becomes committed to provide goods or services or the date of performance by the other party is complete) and capitalized or expensed as if Milestone had paid cash for the goods or services.