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Stock Option Plans
 12 Months Ended
Dec. 31, 2012
Stock Option Plans [Abstract]  
STOCK OPTION PLANS

NOTE K — STOCK OPTION PLANS

In July 2004, the Board of Directors approved the adoption of the 2004 Stock Option Plan. The 2004 Stock Option Plan provides for the grant of options to purchase up to 750,000 shares of Milestone’s common stock. Options may be granted to employees, officers, directors and consultants of Milestone for the purchase of common stock of Milestone at a price not less than the fair market value of the common stock on the date of the grant. In general, options become exercisable over a three-year period from the grant date and expire five years after the date of grant.

In December 2007, the Board of Directors authorized the Company to issue up to $2 million of its Company stock to vendors or employees, and to grant them piggy back registration rights in the usual form, at a value of not less than 90% of the market value on the date of the agreement for the vendor or employee to accept said shares. Such future shares are not included in the above noted shares reserved for future issuance.

In November 2009, the Board of Directors authorized 666,667 options be reserved for a special bonus to the Chief Executive Officer of the Company, for obtaining a three year purchase order for the sale of 12,000 STA Instruments and related handpieces over a four year period. These options were reserved and 73,333 were granted but not vested in 2010. The remaining 593,334 were reserved until specific performance targets are achieved. The options will be issued upon achievement of the specific target on a yearly basis. The options were valued at $1.49 per share.

In June 2011, the Shareholders of the Company approved the 2011 Stock Option Plan (the “2011 Plan”) that provides for stock options to our employees, directors and consultants an incentive and non-qualified stock options to purchase up to 2,000,000 shares of Common Stock. Such future shares are included in the above noted shares reserved for future issuances.

 

A summary of option activity for employees under the plans as of December 31, 2012 and 2011, and changes during the year then ended is presented below:

 

                                 
                Weighted        
          Weighted     Average     Aggregate  
    Number     Averaged     Remaining     Intrinsic  
    of     Exercise     Contractual     Options  
    Options     Price $     Life (Years)     Value $  

Outstanding, January 1, 2011

     928,504       1.07       3.92       115,849  

Granted

     277,778       0.36       5.00       —    

Exercised

     —         —         —         —    

Forfeited or expired

     (67,000 )      1.17       —         —    

Outstanding, December 31, 2011

     1,139,282       0.89       3.62       1,000  

Exercisable, December 31, 2011

     638,176       0.89       2.79       1,000  

Granted

     211,459       0.95       4.38          

Exercised during 2012

     —         —         —         —    

Forfeited or expired

     (67,000 )      1.58       —         —    

Outstanding, December 31, 2012

     1,283,741       0.79       3.07       768,692  

Exercisable, December 31, 2012

     849,066       0.81       2.43       527,370  

 

                 
          Weighted  
    Number     Averaged  
    of     Exercise  
    Options     Price $  

VESTED OPTIONS

                

Outstanding, January 1, 2011

     471,722       0.95  

Exercised during 2011

     —         —    

Vested Options during 2011

     233,454       0.83  

Forfeited during 2011

     (67,000 )      1.17  

Outstanding, December 31, 2011

     638,176       0.89  

Exercised during 2012

     —         —    

Vested Options during 2012

     277,222       0.92  

Forfeited during 2012

     (66,332 )      1.58  

Outstanding, December 31, 2012

     849,066       0.81  

NONVESTED OPTIONS

                

Nonvested, January 1, 2011

     456,782       1.20  

Granted during 2011

     277,778       0.36  

Vested during 2011

     (233,454 )      0.83  

Forfeited during 2011

     —         —    

Nonvested, December 31, 2011

     501,106       0.90  

Granted during 2012

     211,459       0.95  

Vested during 2012

     277,222       0.92  

Forfeited during 2012

     668       1.15  

Nonvested, December 31, 2012

     434,675       0.91  

Milestone recognizes compensation expense on a straight line basis over the requisite service period and in case of performance based options over the period of the expected performance. During the years ended December 31, 2012 and 2011 Milestone recognized $142,770, and $225,257 of total employee compensation cost related to options that vested each year, respectively. As of December 31, 2012 and 2011, there was $169,764 and $156,753 of total unrecognized compensation cost related to non-vested options which Milestone expects to recognize over a weighted average period of 1.60 years and 2.3 years for December 31, 2012 and December 31, 2011, respectively.

 

A summary of option activity for non-employees under the plans as of December 31, 2011 and 2012, and changes during the year ended is presented below:

 

                                 
                Weighted        
          Weighted     Average     Aggregate  
    Number     Averaged     Remaining     Intrinsic  
    of     Exercise     Contracted     Options  
    Options     Price $     Life (years)     Value $  

Outstanding, January 1, 2011

     534,999       1.85       1.51       99,617  

Exercisable, December 31, 2011

     514,998       1.87       1.41       99,311  

Granted during 2011

     100,000       0.24       2.50       —    

Forfeited during 2011

     (120,000 )      1.75       —         —    

Outstanding, December 31, 2011

     414,999       1.87       1.43       12,000  

Exercisable, December 31, 2011

     399,443       1.90       1.36       12,000  

Forfeited during 2012

     (175,000 )      1.79       —         —    

Outstanding, December 31, 2012

     239,999       1.56       1.32       168,166  

Exercisable, December 31, 2012

     234,442       1.57       1.29       166,944  

 

                 
          Weighted  
    Number     Averaged  
    of     Exercise  
    Options     Price $  

VESTED OPTIONS

                

Outstanding, January 1, 2011

     514,998       1.87  

Exercised during 2011

     (100,000 )      0.25  

Vested during 2011

     104,445       0.29  

Forfeited during 2011

     (120,000 )      1.75  

Outstanding, December 31, 2011

     399,443       1.90  

Exercised during 2012

     —         —    

Vested during 2012

     9,999       1.10  

Forfeited during 2012

     (175,000 )      1.79  

Outstanding, December 31, 2012

     234,442       1.57  

NONVESTED OPTIONS

                

Nonvested January 1, 2011

     20,001       1.21  

Granted during 2011

     100,000       0.24  

Vested during 2011

     (104,445 )      0.29  

Forfeited during 2011

     —         —    

Nonvested December 31, 2011

     15,556       1.16  

Granted during 2012

     —         —    

Exercised during 2012

     —         —    

Vested during 2012

     9,999       1.10  

Outstanding, December 31, 2012

     5,557       1.27  

The fair value of the options was estimated on the date of grant using the Black Scholes option-pricing model. For the year ended December 31, 2011, the following weighted average assumptions were used in calculating fair value; expected life of 3 years; volatility of 117.82 and risk-free interest rate of 1.64%. There were no non-employee options granted for the year ending December 31, 2012. During the year ended December 31, 2012 and 2011, Milestone recognized $2,217 and $44,002 of expense related to non-employee options that vested, respectively. The total unrecognized compensation cost related to nonvested options was zero and $2,358 as of December 31, 2012 and 2011.