STOCK OPTION PLANS

12 Months Ended

Dec. 31, 2025

Share-Based Payment Arrangement [Abstract]

NOTE J — STOCK OPTION 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”) 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 3 three-year period from the grant date and expire five years after the date of grant. As of December 31, 2025 and 2024, the Company had 1,021,220 and 7,579,778, respectively, remaining options available for grants under the Plan.

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.

A summary of option activity for employees under the plans and changes the year ended December 31, 2025 is presented below:

SCHEDULE OF STOCK OPTION ACTIVITY

	Number of Options			Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding at January 1, 2025		2,951,989			2.29		4.54		-
Issued during 2025		4,000,000			0.48		9.60		-
Exercised during 2025		-			-		-		-
Forfeited or expired during 2025		(919,814	)		2.01		-		-
Options outstanding December 31, 2025		6,032,175			1.15		8.13		-
Exercisable, December 31, 2025		2,032,176			2.08		6.07		-

For the years ended December 31, 2025 and 2024, the Company recognized approximately $0.9 million and $0.7 million, respectively, of stock-based compensation expense, which was recorded in general and administrative expenses in the consolidated statements of operations.

The Company estimated the fair value of stock option grants on the grant date using the Black-Scholes option pricing model with the following assumptions: a risk-free interest rate of 1.75%, expected volatility of 86.6% (based on the Company’s historical volatility over the expected term), an expected term of 5 years, a dividend yield of 0%, and a stock price ranging from $0.45 to $0.50.

As of December 31, 2025, there was approximately $1.3 million of total unrecognized stock-based compensation cost related to non-vested stock options, which is expected to be recognized over a weighted-average period of approximately 2.2 years.

A summary of option for non-employees under the plans and changes during the year ended December 31, 2025 is presented below:

SCHEDULE OF STOCK OPTION ACTIVITY

	Number of Options			Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Outstanding at January 1, 2025		99,996			1.74		2.12		5,750
Issued		16,666			0.94		4.18		-
Exercised		-			-		-		-
Expired or cancelled		(33,332	)		1.26		-		-
Outstanding and exercisable at December 31, 2025		83,330			1.59		2.40		-
Exercisable, December 31, 2025		63,881			1.80		1.95		-

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 years ended December 31, 2025 and 2024, Milestone Scientific recognized approximately $10,400 and $9,800 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 for the year ended December 31, 2025 risk free interest rate of 1% Volatility of 85.79%-86.29% (which is based on the Company’s historical volatility over the expected term), expected term of 5 years, 0% dividend rate and closing price of the stock of $0.93-$0.94.

A summary of restricted stock under the plans and changes during the year ended December 31, 2025 is presented below:

SCHEDULE OF RESTRICTED STOCK

	Number of Shares			Weighted Average Grant-Date Fair Value per Award
Non-vested as January 1, 2025		365,171			0.89
Granted		1,333,444			0.34
Vested		(1,670,525	)		0.45
Cancelled		(28,090	)		0.89
Non-vested as December 31, 2025		-			-

On December 18, 2025, the Company entered into restricted stock agreements with members of its Board of Directors and granted 1,333,444 restricted stock awards with a fair value of $0.34 per share. These awards vested immediately. For the year ended December 31, 2025 the Company recognized approximately $625,000 for restricted stock expenses recorded in general and administrative expenses on the statement of operation. For the year ended December 31, 2025 there was no unrecognized stock compensation expense.

As of December 31, 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 June 2024, and 25% quarterly, on the first day of the following months: October 2024, January 2025, and April 2025. These awards vest immediately upon a change of control as defined in the agreements. For the year ended December 31, 2024 the Company recognized approximately $638,000 for restricted stock expenses recorded in general and administrative expenses on the statement of operation.

MILESTONE SCIENTIFIC INC. 10-K