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Note J - Stock Option Plans
 12 Months Ended
Dec. 31, 2020
Notes to Financial Statements  
Share-based Payment Arrangement [Text Block]
NOTE J — STOCK OPTION PLANS
 
In
June 2011,
the stockholders of Milestone Scientific approved the
2011
Stock Option Plan (the
"2011
Plan") which originally provided for stock options to our employees, directors and consultants and incentive and non-qualified stock options to purchase up to
2,000,000
shares of common stock and was later amended in
2016
to increase the maximum number of shares reserved for grant to
4,000,000.
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, 2020
the company has
424,425
remaining options available for grants.
 
The Milestone Scientific Inc.
2020
Equity Incentive Plan  provides for awards of restricted common stock and options to purchase up to a maximum
2,000,000
shares of common stock and expires in
December 2030.
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. In general, options become exercisable over a
three
-year period from the grant date and expire
five
years after the date of grant. For the year ended
December 31, 2020
there were
no
 shares issued, and the full
2,000,000
remain available for grants.
 
 
Milestone Scientific recognizes compensation expense over the requisite service period and in the case of performance-based options over the period of the expected performance. For the
twelve
months ended
December 31, 2020 
and
2019,
Milestone Scientific recognized approximately
$537,000,
and
$181,000
of total employee compensation cost, respectively, recorded in general and administrative expenses on the statement of operations.
 
As of
December 31, 2020 
and
2019,
there was
$936,442
and
$82,526
of total unrecognized compensation cost related to non- vested options, respectively. Milestone Scientific expects to recognize these costs over a weighted average period of
2.98
 and
1.75
years as of
December 31, 2020 
and
2019,
respectively.
 
A summary of option activity for employees under the plans and changes during the years ended
December 31, 2020 
and
2019
is presented below:        
   
Number of Options
    
Weighted Averaged Exercise Price $
    
Weighted Average Remaining Contractual Life (Years)
    
Aggregate Intrinsic Options Value $
  
Options outstanding December 31, 2019
    
1,670,221
      
1.71
      
2.40
      
-
  
Granted
    
-
      
-
      
-
      
-
  
Exercised during 2019
    
-
      
-
      
-
      
-
  
Forfeited or expired
    
(457,779
 )    
1.96
      
-
      
-
  
Options outstanding December 31, 2019
    
1,212,442
      
1.61
      
2.00
      
-
  
Granted during 2020
    
1,135,277
      
2.00
      
4.82
      
137,186
  
Exercised during 2020
    
(336,970
 )    
1.14
      
-
      
-
  
Forfeited or expired during 2020
    
(57,306
 )    
3.89
      
-
      
-
  
Options outstanding December 31, 2020
    
1,953,443
      
1.88
      
3.09
      
476,964
  
Exercisable, December 31, 2020
    
1,169,925
      
1.79
      
1.90
      
385,507
  
 
The Company used the following assumptions to calculate the fair value of the stock option grants using the Black-Scholes option pricing model on the measurement date during the year ended
December 31, 2020,
risk free interest rate of
1.73%
 to
1.81%,
Volatility of
89.80%
 to
92.90%
(which is based on the Company's historical volatility over the expected term), expected term of
3
 to
5
 years,
0%
dividend rate and closing price of the stock of
$1.99
 to
$2.16.
   
 
A summary of option activity for non-employees under the plans and changes during the years ended
December 31, 2020 
and
2019,
is presented below:
 
   
Number of Options
    
Weighted Averaged Exercise Price $
    
Weighted Average Remaining Contractual Life (Years)
    
Aggregate Intrinsic Options Value $
  
Options outstanding December 31, 2019
    
33,332
      
1.87
      
2.94
      
-
  
Granted    
16,666
      
0.55
      
4.43
      
13,999
  
Exercised during 2019
    
-
      
-
      
-
      
-
  
Options outstanding December 31, 2019
    
49,998
      
1.87
      
2.94
      
 
  
Granted during 2020    
33,332
      
1.71
      
4.60
      
13,666
  
Exercised during 2020
    
-
      
-
      
-
      
-
  
Forfeited or expired during 2020
    
(8,333
 )    
2.70
      
-
      
 
  
Options outstanding December 31, 2020    
74,997
      
1.41
      
3.18
      
54,748
  
Exercisable, December 31, 2020    
47,220
      
1.38
      
2.55
      
36,915
  
 
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
twelve
months ended
December 31, 2020 
and
2019,
Milestone Scientific recognized approximately
$13,600
and
$2,400
expense related to non-employee options, respectively.
 
The Company used the following assumptions to calculate the fair value of the stock option grants using the Black-Scholes option pricing model on the measurement date during the year ended
December 31, 2020,
risk free interest rate of  
0.2%
-
0.5
%, Volatility of
86.97%
 to
94.05%,
expected term of
5
years,
0%
dividend rate and closing price of the stock of
$1.65
 to
$1.75.