AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 17, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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MILESTONE SCIENTIFIC INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 13-3545623
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Identification
Organization) Number)
220 South Orange Avenue
Livingston Corporate Park
Livingston, New Jersey 07039
(201) 535-2717
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Executive Offices)
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1997 Stock Option Plan
Consultant Options
Leonard Osser
Milestone Scientific Inc.
220 South Orange Avenue
Livingston Corporate Park
Livingston, New Jersey 07039
(201) 535-2717
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Please send copies of all correspondence to:
Stephen A. Zelnick, Esq.
Morse, Zelnick, Rose & Lander, LLP
450 Park Avenue
New York, New York 10022-2605
Telephone No. (212) 838-8040
Fax No. (212) 838-9190
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<TABLE>
<CAPTION>
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Proposed Proposed
Maximum Maximum Amount of
Title of Securities Amount to be Offering Price Aggregate Registration
to be Registered Registered (1) per Share Offering Price Fee
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<S> <C> <C> <C> <C>
Common Stock (par value
$.001 per share) issuable
pursuant to options granted
or to be granted under the
1997 Stock Option Plan (the
"Option Plan")
- ---------------------------------------------------------------------------------------------
Common Stock subject to
options granted under the
Option Plan (2) 489,000 $ 5.99 $2,929,110 $ 887.61
- ---------------------------------------------------------------------------------------------
Common Stock issuable
pursuant to additional
options that may be
granted under the Option 11,000 $20.625 $ 226,875 $ 68.75
Plan (3)
- ---------------------------------------------------------------------------------------------
Common Stock issuable upon
exercise of Consultant 199,000 $ 5.784 $1,151,016 $ 348.79
Options (4)
- ---------------------------------------------------------------------------------------------
Total 699,000 $4,359,944 $1,305.15
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</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Act of 1933, this
Registration Statement also covers an indeterminate number of additional shares
or rights which by reason of certain events specified in the 1997 Option Plan
become subject to the Plan.
(2) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee on the basis of the weighted average exercise
price of $5.99 per share for outstanding options to purchase a total of 489,000
shares of Common Stock.
(3) Estimated in accordance with rule 457(c) and (h), the proposed maximum
offering price per share, proposed maximum aggregate offering price and the
amount of the registration fee are based upon the average of the high and low
sales prices reported on the Nasdaq SmallCap Market on November 14, 1997, with
respect to shares available for grant under the 1997 Stock Option Plan.
(4) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee on the basis of the weighted average exercise
price of $ 5.784 per share for outstanding options to purchase a total of
199,000 shares of Common Stock.
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MILESTONE SCIENTIFIC INC.
REGISTRATION STATEMENT ON FORM S-8
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of Form S-8
(plan information and registrant information) will be sent or given to employees
as specified by Rule 428(b)(1) of the Securities Act of 1933, as amended (the
"Securities Act"). Such documents need not be filed with the Securities and
Exchange Commission either as part of this Registration Statement or as
prospectuses or prospectus supplements pursuant to Rule 424 of the Securities
Act. These documents and the documents incorporated by reference in this
Registration Statement pursuant to Item 3 of form S-8 (Part II hereof), taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Stock.
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PROSPECTUS
699,000 Shares
MILESTONE SCIENTIFIC INC.
Common Stock, $.001 Par Value
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This Prospectus may be used by certain persons (the "Selling
Stockholders") who may be deemed to be affiliates of Milestone Scientific Inc.,
a Delaware corporation (the "Company"), to sell shares (the "Shares") of Common
Stock, par value $.001 per share, of the Company (the "Common Stock"), which
have been acquired or will be acquired by the Selling Stockholders pursuant to
the exercise of all or any portion of certain stock options granted pursuant to
the Company's 1997 Stock Option Plan (the "Option Plan"), or of certain options
granted to consultants and agents of the Company (the "Consultant Options"),
(the Option Plan and Consultant Options are referred to together as the
"Plans"). It is anticipated that the Selling Stockholders will offer Shares for
sale at prevailing prices on the Nasdaq SmallCap Market or on a principal Stock
Exchange or other National Market Quotation System on the date of sale. All
proceeds from any sale of such Shares will inure to the benefit of the Selling
Stockholders. The Company will receive none of the proceeds from the sale of the
Shares which may be offered hereby, but may receive funds upon the exercise of
stock options pursuant to which the Selling Stockholders will acquire the Shares
covered by this Prospectus, which funds, if any, will be used by the Company for
working capital. All expenses of the registration incurred in connection
herewith are being borne by the Company, but all selling and other expenses
incurred by individual Selling Stockholders will be borne by such Selling
Stockholders.
---------------------------------
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
See "Risk Factors" at page 7.
---------------------------------
The Common Stock is traded over-the-counter and is quoted through the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
on the SmallCap Market System under the symbol "WAND." On November 14, 1997 the
last sales price of the Shares on the NASDAQ SmallCap System was $21.25.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is November 17, 1997.
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No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in connection with
the offering made hereby, and, if given or made, such information or
representations must not be relied upon as having been authorized by the Company
or by any other person. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create any implication that
information herein is correct as of any time subsequent to the date hereof. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy the Shares to any person or by anyone in any jurisdiction in which such
offer or solicitation may not lawfully be made.
No action has been or will be taken in any jurisdiction by the Company or the
Selling Stockholders that would permit a public offering of the Shares or
possession or distribution of this Prospectus in any jurisdiction where action
for that purpose is required, other than in the United States. Persons into
whose possession this Prospectus comes are required by the Company and the
Selling Stockholders to inform themselves about and to observe any restrictions
as to the offering of the Shares and the distribution of this Prospectus.
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AVAILABLE INFORMATION
The Company is subject to the informational and reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed with the Commission by the Company may be
inspected and copied at the public reference facilities maintained by the
Commission at its principal offices at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511, and 7 World Trade Center, Suite 1300, New York, New York 10048. Such
reports, proxy statements and other information may also be obtained from the
web site that the Commission maintains at http://www.sec.gov. Copies of these
materials can also be obtained at prescribed rates from the Public Reference
Section of the Commission at its principal offices in Washington, D.C., set
forth above.
The Company has filed a Registration Statement (including all amendments
and supplements thereto, the "Registration Statement") with the Commission under
the Securities Act with respect to the Shares offered hereby. This Prospectus,
which forms a part of the Registration Statement, does not contain all of the
information set forth in the Registration Statement and the exhibits filed
therewith, certain parts of which have been omitted in accordance with the rules
and regulations of the Commission. Statements contained herein concerning the
provisions of such documents are not necessarily complete and, in each instance,
reference is made to the Registration Statement or to the copy of such document
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety by such reference.
Copies of the Registration Statement and the exhibits thereto can be obtained
upon payment of a fee prescribed by the Commission or may be inspected free of
charge at the public reference facilities and regional offices referred to
above.
REPORTS TO SECURITY HOLDERS
The Company intends to furnish to its stockholders annual reports
containing audited financial statements. In addition, the Company is required to
file periodic reports on Forms 8-K, 10-QSB and 10-KSB with the Commission and
make such reports available to its stockholders.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated in this Prospectus by reference:
(1) Annual Report on Form 10-KSB, as amended (the "Form 10-KSB") for the
fiscal year ended December 31, 1996;
(2) Current Report on Form 8-K, dated March 13, 1997;
(3) Quarterly Report on Form 10-QSB for the quarter ended March 31,
1997;
(4) Quarterly Report on Form 10-QSB for the quarter ended June 30, 1997;
and
(5) Quarterly Report on Form 10-QSB for the quarter ended September 30,
1997.
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Each document filed subsequent to the date of this Prospectus pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination
of this offering shall be deemed to be incorporated in this Prospectus by
reference and to be a part hereof from the date of the filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
herein by reference shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any document incorporated
by reference in this Prospectus (other than exhibits unless such exhibits are
specifically incorporated by reference in such documents). Requests should be
directed to Milestone Scientific Inc., 220 South Orange Avenue, Livingston
Corporate Park, Livingston, New Jersey 07039, Attention: Pat Mele, Chief
Financial Officer.
THE COMPANY
The Company was organized in August 1989 under the laws of Delaware. Its
principal executive office is located at 220 South Orange Avenue, Livingston
Corporate Park, Livingston, New Jersey 07039, telephone number (973) 535-2717.
FORWARD-LOOKING STATEMENTS
Certain statements made in or incorporated by reference to this
Registration Statement are "forward-looking statements" (within the meaning of
the Private Securities Litigation Reform Act of 1995) regarding the plans and
objectives of management for future operations. Such statements involve known
and unknown risks, uncertainties and other factors that may cause actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. The forward-looking statements made in or
incorporated by reference to this Form are based on current expectations that
involve numerous risks and uncertainties. The Company's plans and objectives are
based, in part, on assumptions involving the growth and expansion of business.
Assumptions relating to the foregoing involve judgments with respect to, among
other things, future economic, competitive and market conditions and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Company. Although the
Company believes that its assumptions underlying the forward-looking statements
are reasonable, any of the assumptions could prove inaccurate and, therefore,
there can be no assurance that the forward-looking statements made in or
incorporated by reference to this Form will prove to be accurate. In light of
the significant uncertainties inherent in the forward-looking statements made in
or incorporated by reference to this Form, particularly in view of the Company's
early stage of operations, the inclusion of such information should not be
regarded as a representation by the Company or any other person that the
objectives and plans of the Company will be achieved.
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RISK FACTORS
An investment in the Shares offered hereby involves a high degree of risk.
Prospective investors should carefully consider, among other things, the
following factors before a decision is made to purchase any Shares.
All references in this Registration Statement to the Company refer to
Milestone Scientific Inc. (formerly U.S. Opportunity Search, Inc.), its wholly
owned subsidiaries, Princeton PMC, Inc. ("Princeton PMC") and Sagacity I, Inc.,
doing business in the United States as the Wisdom Toothbrush Co. ("Wisdom"), and
its 69% owned subsidiary, Spintech, Inc. ("Spintech"), unless the context
otherwise indicates.
Limited Operating History; History of Losses; Accumulated Deficit. The
Company has operated only since November 1995, when it acquired a 65% interest
in Spintech. Since that date, revenues have been limited and were $3,473 for the
fiscal year ended December 31, 1995 and $302,388 for the fiscal year ended
December 31, 1996. Revenues for the nine months ended September 30, 1997 were
$2,305,460 compared to $154,856 for the nine months ended September 30, 1996.
The Company sustained losses of $619,831 and $1,949,528 for the years ended
December 31, 1995 and 1996, respectively, and losses of $1,366,572 and
$3,164,523 for the nine months ended September 30, 1996 and 1997, respectively.
The Company had an accumulated deficit of $5,900,875 at September30, 1997.
Limited Financial Resources; Need for Additional Financing. The Company's
capital requirements have been and will continue to be significant. The Company
did not operate profitably in 1996 and there can be no assurance that the
Company will be able to generate cash flows in the future which will be
sufficient to fund its operations. Assuming no change in the business operations
of the Company, it is expected that the approximately $10 million proceeds from
the private placement consummated on September 11, 1997 will be sufficient to
meet its working capital requirements until, at least, April 1999. However, no
assurance can be given that the Company's current working capital will be
adequate for its planned operations or that circumstances will not change and
result in the need for additional working capital. If additional financing is
needed, the Company will be required to borrow funds or, sell additional equity
securities, or may be required to curtail or reduce its activities. The Company
has no current arrangements for future additional financing. There can be no
assurance that any sources of additional financing will be available to the
Company on acceptable terms, or at all. To the extent that any future financing
involves the sale of the Company's equity securities, the ownership interest of
the Company's then-stockholders could be substantially diluted.
Highly Competitive Industry; Technological and Product Obsolescence. The
Company faces intense competition from many companies in the medical and dental
device industry, including well-established academic institutions, possessing
substantially greater financial, marketing, personnel, and other resources. Most
of the Company's competitors have established reputations, stemming from their
success in the development, sale, and service of their competing medical
products. Further, rapid technological change and extensive research and
development characterize the industry. Current or new competitors could, at any
time, introduce new or enhanced products with features that render the Company's
products less marketable, or even obsolete. Therefore, the Company must devote
substantial efforts and financial resources to enhance its existing products, to
bring its developmental products to market, and to develop new products for its
related markets. In order to compete successfully, the Company must establish an
effective distribution network. Several regulatory authorities must also approve
the Company's products before they may be marketed. There can be no
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assurance that the Company will be able to compete successfully, that its
competitors will not develop technologies or products that render the Company's
products less marketable or obsolete, or that the Company will be able to
successfully enhance its existing products, effectively develop new products, or
obtain required regulatory approval therefor.
Integration of Wisdom. Although the Company acquired Wisdom and its United
States distribution system for clinically oriented dental products and Wisdom is
an ongoing business with established revenues, there can be no assurance that
the Company will successfully integrate it into its current operations and
operate it profitably.
Future Revenue Growth Dependent on Proprietary Products. The Company
believes that its future growth in revenues will be dependent on its proprietary
products, particularly "The Wand(TM)", a computer controlled "painless"
injection system. The Company has had orders placed for "The Wand(TM)" but has
not yet had any sales of this product. The Company's other proprietary products
include the Sharps Disposal System ("SDS") and the "SplatrFree(TM)" disposable
prophy angle. The Company only has had limited sales of the SDS and the
"SplatrFree(TM)" prophy angle. The sale and use of the SDS unit and its
precursor the TAPS unit and the disposal of medical waste after processing by
these units is subject to varying degrees of federal, state, local and foreign
regulation. No assurance can be given that the SDS unit will be available for
sale in a particular jurisdiction or may be used by a purchaser, and no
assurance can be given that the Company will generate any significant revenues
from this product in the future. Further, there can be no assurance that the
Company will be able to successfully market these product lines, that demand
exists at levels or prices at which the Company can operate profitably, or that
the products will meet user expectations. The Company has developed a commercial
version of "The Wand(TM)" and launched this product at the Fall 1997 American
Dental Association Trade Show. No assurance can be given that "The Wand(TM)"
will be successfully marketed by the Company or accepted by the market place.
Uncertainty of Market Acceptance. Achieving market acceptance for the
Company's proprietary products will require substantial marketing efforts and
expense. As with any new technology, there is substantial risk that the
marketplace will not accept the potential benefits of such technology or be
willing to pay for any cost differential with the existing technologies. Market
acceptance of these current and proposed products will depend, in large part,
upon the ability of the Company to educate potential customers, including
third-party distributors, of the distinctive characteristics and benefits of its
products. There can be no assurance that current or proposed products will be
accepted by the end users or that any of the current or proposed products will
be able to compete effectively against current and alternative products.
Limited Distribution; Establishing Distribution Channels. The Company has
only a limited number of independent domestic sales representatives and did not
have a direct sales force until its acquisition of Wisdom in December 1996. Its
sales force remains limited. In October 1997, the Company entered into informal
agreements for the distribution of "The Wand(TM)" with Henry Shein, Patterson
Dental, Meer Dental and American Dental Cooperative Member Companies. The
Company has not commenced distribution of the "The Wand(TM)". In December 1996,
the Company began distribution of the SDS and in February 1997 began
distribution of its prophy angles through its Wisdom subsidiary. In addition,
while the Company has an exclusive distribution agreement for the marketing of
the SDS in Taiwan, it does not expect any material sales pursuant thereto until
that system is approved for sale in Taiwan. The Company's future success is
dependent upon its ability to establish an effective sales organization for its
proprietary products or to enter into distribution arrangements
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with other entities selling to its target markets. No assurances can be given
that the Company will be able to hire and retain its own sales force or enter
into appropriate distribution arrangements.
Patent and Intellectual Property Protection. The Company holds U.S.
patents applicable to the SDS and "The Wand(TM)" and has made application for a
U.S. patent on the "SplatrFree(TM)" prophy angle. The Company relies on a
combination of patent, trade secret, and trademark laws and employee and
third-party nondisclosure agreements to protect its intellectual property
rights. Despite the precautions taken by the Company to protect its products,
unauthorized parties may attempt to reverse engineer, copy, or obtain and use
its products and other information the Company regards as proprietary.
Litigation may be necessary to protect the Company's intellectual property
rights and could result in substantial cost to, and diversion of effort by, the
Company with no guarantee of success. The failure of the Company to protect its
proprietary information, and the expense of doing so, could have a material
adverse effect on the Company's operating results and financial condition.
Although the Company has received no claims of infringement, it is possible that
infringement of existing or future patents or proprietary rights of others may
occur. In the event that the Company's products infringe patent or proprietary
rights of others, the Company may be required to modify its processes or to
obtain a license. There can be no assurance that the Company would be able to do
so in a timely manner, upon acceptable terms and conditions, or at all. The
failure to do so would have a material adverse effect on the Company.
Dependence on Manufacturers. The Company has informal arrangements for the
manufacture of its products by separate domestic manufacturers as follows: SDS
units by Arbutus Electronics, Inc.; SplatrFree(TM) prophy angles by Team
Technologies, Inc.; The Wand(TM) unit and system kit by Tricor Systems, Inc.;
and The Wand(TM) disposable handpiece by Nypro Inc. Termination of the
manufacturing relationship with any of the above manufacturers could
significantly and adversely affect the Company's ability to produce and sell its
products. Though alternate sources of supply exist and new manufacturing
relationships could be established, the Company would need to recover its
existing tools or have new tools produced. Establishment of new manufacturing
relationships could involve significant expense and delay. Any curtailment or
interruptions of the supply, whether or not as a result or termination of the
relationship, would adversely affect the Company.
Product Liability. The Company is engaged in a business which could expose
it to possible claims for personal injury from the use of its dental and medical
products. The Company maintains liability insurance in the aggregate amount of
$2,000,000 with a per-occurrence limit of $1,000,000 which the Company believes
to be adequate. Although no claims have been made against the Company or any of
the customers using its products, there can be no assurance that such claims
will not arise in the future or that the insurance coverage will be sufficient
to pay such claims. A partially or completely uninsured claim, if successful and
of significant magnitude, could have a material adverse effect on the Company.
Reliance Upon Management. The Company is dependent upon the personal
efforts and abilities of Leonard Osser, its President and Chief Executive
Officer and Gregory Volok, Executive Vice President and Chief Operating Officer.
Messrs. Osser and Volok have entered into employment agreements with the
Company, as amended, expiring in March 2000 and October 2001, respectively, and
each providing for non-competition periods at the expiration of the terms. The
Company has obtained key man life insurance in the amounts of $3,000,000 and
$1,000,000 on the lives of Messrs. Osser and Volok, respectively. While the
Company expects that such policies will issue in due course, no assurances can
be given that such policies will be obtained.
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Litigation; Change in Officers. On April 10, 1997, the Board of Directors
of Spintech terminated the employment of Dr. Ronald Spinello as its Chairman and
Director of Research. The action by the Board follows the bringing by Milestone
and Spintech of legal action against Dr. Spinello in which the plaintiffs seek,
among other things, a declaratory judgment that Dr. Spinello has no personal
rights to certain technology developed while he was employed as Director of
Research of Spintech relating to the design and production of ancillary
components of "The Wand(TM)" and a declaratory judgment that plaintiffs have not
breached Dr. Spinello's employment agreement. Milestone, as principal
stockholder of Spintech, also removed Dr. Spinello and Glenn Spinello as
directors of Spintech. On May 21, 1997, Dr. Spinello filed an Answer and
Counterclaim to the above legal action denying the material allegations of the
complaint and making certain counterclaims, including recovery for breach of Dr.
Spinello's employment agreement. On May 28, 1997, Milestone and Spintech filed a
reply to the counterclaim denying any liability. Milestone has been advised by
its patent counsel that all technology developed by Dr. Spinello while employed
by Spintech is owned by Spintech. Further, the Company believes that ownership
of the technology relating to these ancillary components which are the subject
of this litigation is not required for the manufacture and sale of its
anesthetic delivery system at economically viable prices.
No Dividends. The Company has never paid a cash dividend on its Common
Stock. Payment of dividends on the Common Stock is within the discretion of the
Board of Directors and will depend upon the Company's earnings, its capital
requirements and financial condition, and other relevant factors. The Company
does not currently intend to declare any dividends on its Common Stock in the
foreseeable future.
Control by Certain Persons. The Company's officers and the members of its
Board of Directors own approximately 33% of the currently outstanding shares of
Common Stock. Accordingly, by reason of their stockholdings, and their control
of the means for soliciting stockholder votes, the directors will be able to
exercise control of the Company and, in all likelihood, will be able to continue
to elect all directors.
Limitation of Director Liability. The Company's Certificate of
Incorporation provides that a director of the Company will not be personally
liable to the Company or its stockholders for monetary damages for breach of the
fiduciary duty of care as a director, including breaches which constitute gross
negligence, subject to certain limitations imposed by the Delaware General
Corporation Law. Thus, under certain circumstances, neither the Company nor the
stockholders will be able to recover damages even if directors take actions
which harm the Company.
Government Regulation and FDA Clearance. The manufacture and sale of the
Company's "SplatrFree(TM)" prophy angles and "The Wand(TM)", are subject to
extensive regulation by the FDA pursuant to the Federal Food, Drug, and Cosmetic
Act ("FDC Act"), and by other federal, state and foreign authorities. Under the
FDC Act, these medical devices must receive FDA clearance before they can be
commercially marketed in the United States. Some products must undergo rigorous
pre-clinical and clinical testing and an extensive FDA approval process before
they can be marketed. These processes can take a number of years and require the
expenditure of substantial resources. The time required for completing such
testing and obtaining such approvals is uncertain, and FDA clearance may never
be obtained. Delays or rejections may be encountered based upon changes in FDA
policy during the period of product development and FDA regulatory review of
each submitted application. Similar delays may also be encountered in other
countries. While the "SplatrFree(TM)" prophy angle and "The Wand(TM)" have
received FDA marketing clearance there can be no assurance that all of the
Company's products under development will obtain the required regulatory
clearance on a timely basis, or at all. If
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regulatory clearance of a product is granted, such clearance may entail
limitations on the indicated uses for which the product may be marketed. In
addition, modifications may be made to the Company's products to incorporate and
enhance their functionality and performance based upon new data and design
review. There can be no assurance that the FDA will not request additional
information relating to product improvements, that any such improvements would
not require further regulatory review thereby delaying the testing, approval and
commercialization of the Company's development products or that ultimately any
such improvements will receive FDA clearance. FDA regulations also require
manufacturers of medical devices to adhere to certain "Good Manufacturing
Practices" ("GMP"), which include testing, design, quality control and
documentation procedures. Compliance with applicable regulatory requirements is
subject to continual review and will be monitored through periodic inspections
by the FDA. Later discovery of previously unknown problems with a product,
manufacturer, or facility may result in restrictions on such product or
manufacturer, including fines, delays or suspensions of regulatory clearances,
seizures or recalls of products, operating restrictions and criminal prosecution
and could have a material adverse effect on the Company. See "Business -
Government Regulation."
Limitation of Tax Loss Carryforward Benefits. As of November 13, 1995,
when the Company acquired a controlling interest in Spintech, the amount of net
operating loss of Spintech available to be carried forward to offset future
taxable income for United States tax purposes ("NOLs") was approximately
$1,890,000. These NOLs expire on various dates through December 31, 2009. The
Company believes that its acquisition of a controlling interest in Spintech
resulted in an "ownership change," as defined in Section 382 of the Internal
Revenue Code of 1986, as amended (the "Code"). As a consequence, the Company
believes that Spintech's NOLs to offset United States taxable income are, in
addition to the carryforward limitations described above, subject to an annual
limitation equal to the fair market value of Spintech immediately before the
ownership change, multiplied by the "long-term tax-exempt rate" as defined in
Section 382 of the Code, or approximately $235,750 per year. The limitation on
the utilization of the NOLs could increase the federal income taxes payable by
the Company if Spintech operates profitably, as to which no assurance can be
given.
Restricted Securities; Possible Volatility of Market Price; Limited Public
Market Trading. The Common Stock is currently traded on The Nasdaq SmallCap
Market. From time to time the market prices of dental and medical product
companies have been affected by various factors, including adverse publicity.
There can be no assurance that the market price of the Common Stock will not be
volatile as a result of factors such as the Company's financial results,
possible adverse publicity resulting from any infractions of governmental
regulations and various other factors affecting dental and medical product
companies or the market generally. In recent years the stock market has
experienced wide price fluctuations not necessarily related to the operating
performance of such companies. Although the Common Stock has been listed on The
Nasdaq SmallCap Market since November 1995, there can be no assurance that a
regular trading market will be sustained. Further, in order to continue to trade
on The Nasdaq SmallCap Market, the Company must meet The Nasdaq SmallCap
Market's standards for continued listing. If, at any time, the Company's Common
Stock were delisted from The Nasdaq SmallCap Market, the Company's securities
would become subject to the "penny stock rules" applicable to non-Nasdaq
companies whose common stock trades at less than $5.00 per share or which have
tangible net worth of less than $5,000,000 ($2,000,000 if the Company has been
operating for three or more years). Such rules require, among other things, that
brokers who trade "penny stocks" to persons other than "established customers"
complete certain documentation, make suitability inquiries of investors and
provide investors with certain information concerning trading in the security,
including a risk disclosure document and quote information under certain
circumstances. Many brokers have decided not to trade "penny stock" because of
the requirements of
11
<PAGE>
the penny stock rules and, as a result, the number of broker-dealers willing to
act as market makers in such securities is limited.
Effect of Outstanding Warrants and Options. The Company currently has
outstanding the following options and warrants: (i) warrants to purchase an
aggregate of 80,000 shares of Common Stock at $6.00 per share issued to the
underwriter in the Company's November 1995 public offering and two bridge
lenders (the "1995 Warrants"); (ii) warrants to purchase 482,906 shares of
Common Stock issued to investors in a private placement consummated on March 13,
1997 (the "March Private Placement"); (iii) an option to purchase 85,226 units
(each unit containing one share of Common Stock and one warrant to purchase one
share of Common Stock) granted to GKN Securities Corp., as placement agent (the
"Placement Agent") in the March Private Placement and its designees; (iv)
Warrants to purchase 1,503,666 shares issued to investors in a private placement
consummated in October 1997 (the "October Private Placement"); (v) warrants
issued to Morse, Zelnick, Rose & Lander LLP, counsel to the Company, to purchase
at $6.00 per unit 83,333 units, each unit consisting of one share of Common
Stock and a Warrant to purchase a share of Common Stock at an exercise price of
$9.00; and (vi) incentive and non-qualified stock options issued to officers,
directors and consultants to purchase an aggregate of 699,000 shares of Common
Stock at prices ranging from $5.125 to $7.56 per share expiring on various
dates, the latest of which is July 2002. All of the foregoing securities
represent the right to acquire Common Stock of the Company during various
periods of time and at various prices. Holders of all the foregoing securities
are given the opportunity to profit from a rise in the market price of the
Common Stock and are likely to exercise their securities at a time when the
Company would be able to obtain additional equity capital on more favorable
terms. Thus, the terms upon which the Company will be able to obtain additional
equity capital may be adversely affected since the holders of outstanding
options and warrants can be expected to exercise them at a time when the Company
would, in all likelihood, be able to obtain any needed capital on terms more
favorable to the Company than the exercise terms provided by such outstanding
securities. The Company has not granted any registration rights with respect to
any shares of Common Stock or other securities that are "restricted securities"
or that underlie outstanding warrants or options, other than the registration
rights granted to investors in the October Private Placement, the March Private
Placement, to the Placement Agent and to the holders of the 1995 Warrants.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by
the Selling Stockholders, but may receive funds upon the exercise of stock
options pursuant to which the Selling Stockholders will acquire Shares covered
by this Prospectus, which funds, if any, will be used by the Company for working
capital.
12
<PAGE>
RECENT DEVELOPMENTS
Private Offering
On September 11, 1997, the Company completed a $10 million private equity
offering (the "Private Placement") to 36 accredited investors of 1,666,666 units
(the "Units"). The per-Unit offering price was $6.00, and each Unit consisted of
one share of Common Stock and one warrant to purchase one share of Common Stock
at an exercise price of $9.00 per share until September 10, 1999. In connection
with the Private Placement, the Company issued to its counsel warrants to
purchase 83,333 units, exercisable at $6.00 per unit, each unit consisting of
one share of Common Stock and a warrant to purchase one share of Common Stock at
an exercise price of $9.00.
13
<PAGE>
SELLING STOCKHOLDERS
The Shares covered by this Prospectus are being registered for reoffers
and resales by Selling Stockholders of the Company who may acquire such Shares
pursuant to the exercise of stock options granted under the Plans. The Selling
Stockholders named on the following table may resell all, a portion, or none of
the Shares that they acquire pursuant to the exercise of stock options under the
Plans.
Key employees deemed to be "affiliates" of the Company who acquire
registered Shares under the Plans may be added to the Selling Stockholders
listed below from time to time, either by means of a post-effective amendment
hereto or by use of a prospectus filed pursuant to Rule 424(c) under the
Securities Act. An "affiliate" is defined in Rule 144 under Securities Act as a
"person that directly, or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Company".
The following table sets forth information with respect to the number of
shares of Common Stock beneficially owned by each of the Selling Stockholders as
of October 31, 1997. The address of each Selling Stockholder is c/o Milestone
Scientific Inc., 220 South Orange Avenue, Livingston Corporate Park, Livingston,
New Jersey 07039.
<TABLE>
<CAPTION>
Name of Percentage of
Selling Stockholder Number of Common Stock to Common Stock
and Position with Shares Shares that be Owned Owned After
the Company Owned (1) May Be Sold After the Offering the Offering(2)
----------- --------- ----------- ------------------ ---------------
<S> <C> <C> <C> <C>
Leonard Osser
President, Chief Executive
Officer and Director 2,545,000 (3) 150,000 2,395,000 29.6%
Gregory Volok
Executive Vice President,
Chief Operating Officer
and Director 56,700 (4) 50,000 6,700 *
Michael J. McGeehan
Vice President and Director 46,574 (5) 45,000 1,574 *
Pat Mele
Chief Financial Officer 30,000 (6) 30,000 0 *
Giovanni Montoncello
Director 20,000 (7) 20,000 0 *
David Sultanik
Director 20,000 (7) 20,000 0 *
Stephen A. Zelnick
Director 513,666 (8) 70,000 443,666 5.3%
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Name of Percentage of
Selling Stockholder Number of Common Stock to Common Stock
and Position with Shares Shares that be Owned Owned After
the Company Owned (1) May Be Sold After the Offering the Offering(2)
----------- --------- ----------- ------------------ ---------------
<S> <C> <C> <C> <C>
Paul Gregory
Director 20,150 (9) 20,000 150 *
Louis I. Margolis
Director 84,000 (10) 20,000 64,000 *
Leonard M. Schiller
Director 70,594 (11) 45,000 25,594 *
Larry Haimovitch
Director 27,356 (7) 20,000 7,356 *
</TABLE>
- ----------
* Less than 1%
(1) Includes Common Shares subject to options which have not yet vested and
therefore are not exercisable within 60 days of the date hereof, although
such Shares are not "beneficially" owned within the meaning of Section
13(d) of the Exchange Act.
(2) Based upon 8,103,080 shares of Common Stock outstanding as of October 31,
1997 plus, in the case of each Selling Stockholder, assuming that all
Shares covered by this Prospectus are sold and that no additional shares
are purchased or sold by any Selling Stockholder.
(3) Includes 150,000 shares issuable upon exercise of options. Also includes
1,586,000 held in the name of Leonard Osser, 800,000 shares held in the
name of U.S. Asian Consulting Group, Inc., an affiliate of Mr. Osser, and
9,000 shares held by Guarantee and Trust Company for the benefit of U.S.
Asian Consulting Group, Inc.
(4) Includes 50,000 shares issuable upon exercise of options. Also includes
4,000 shares held jointly with his wife and 2,700 shares held personally
or in an IRA.
(5) Includes 45,000 shares issuable upon exercise of options.
(6) Consists of 30,000 shares issuable upon exercise of options.
(7) Consists of 20,000 shares issuable upon exercise of options.
(8) Includes 70,000 shares issuable upon exercise of options. Also includes
(i) 55,000 shares held in the name of Cowen & Co. as Custodian for the
Stephen A. Zelnick Profit Sharing Trust ("Cowen & Co."), (ii) 136,000
shares beneficially owned through Erewhon Holdings Company, a partnership
in which Mr. Zelnick is a general partner ("Erewon"), (iii) 50,000 shares
issuable upon exercise of warrants within 60 days of the date hereof held
in the name of Cowen & Co., (iv) 36,000 shares issuable upon exercise of
warrants within 60 days of the date hereof beneficially owned through
Erewhon, and (v) 166,666 shares issuable upon exercise of immediately
exercisable warrant to purchase units comprised of 83,333 shares and
warrants to purchase an additional 83,333 shares registered in the name of
Morse, Zelnick Rose & Lander, LLP, a limited liability partnership
("MZRL") in which Mr. Zelnick is a general partner. MZRL or partners in
MZRL share beneficial ownership in the stock options and the securities
listed in (ii), (iv) and (v), above.
15
<PAGE>
(9) Includes 20,000 shares issuable upon exercise of options. Also includes
150 shares held by his wife.
(10) Includes 20,000 shares issuable upon exercise of options. Also includes
32,000 shares issuable upon exercise of warrants within 60 days of the
date hereof.
(11) Includes 45,000 shares issuable upon exercise of options. Also includes
5,297 shares issuable upon exercise of warrants within 60 days of the date
hereof.
16
<PAGE>
MILESTONE SCIENTIFIC INC.
REGISTRATION STATEMENT ON FORM S-8
PART II
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant to the
Exchange Act are incorporated in this Prospectus by reference:
(1) Annual Report on Form 10-KSB, as amended, for the fiscal year ended
December 31, 1996;
(2) Current Report on Form 8-K, dated March 13, 1997;
(3) Quarterly Report on Form 10-QSB for the quarter ended March 31,
1997;
(4) Quarterly Report on Form 10-QSB for the quarter ended June 30, 1997;
(5) Quarterly Report on Form 10-QSB for the quarter ended September 30,
1997; and
(6) The description of the Company's Common Stock, contained in the
Company's Registration Statement on Form 8-A registering such shares
pursuant to Section 12 of the Exchange Act, including any amendment
or report updating such information.
Each document filed subsequent to the date of this Prospectus pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold shall be deemed
to be incorporated in this Registration Statement by reference and to be a part
hereof from the date of the filing of such documents. Any statement contained in
a document incorporated or deemed to be incorporated herein by reference shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any document incorporated
by reference in this Prospectus (other than exhibits unless such exhibits are
specifically incorporated by reference in such documents). Requests should be
directed to Milestone Scientific Inc., 220 South Orange Avenue, Livingston
Corporate Park, Livingston, New Jersey 07039, (201) 535-2717 Attention: Pat
Mele, Chief Financial Officer.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
17
<PAGE>
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the securities offered hereby will be passed upon for the
Company by Morse, Zelnick, Rose & Lander, LLP, 450 Park Avenue, New York, New
York 10022. Members of and counsel to the firm own in the aggregate 223,000
shares of Common Stock of the Company, options to purchase 170,000 shares of
Common Stock of the Company, 145,000 of which are currently exercisable and
warrants to purchase 83,333 units, each unit consisting of one share of Common
Stock and one warrant to purchase one share of Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 145 of the Delaware General Corporation Law grants to the Company
the power to indemnify the officers and directors of the Company, under certain
circumstances and subject to certain conditions and limitations as stated
therein, against all expenses and liabilities incurred by or imposed upon them
as a result of suits brought against them as such officers and directors if they
act in good faith and in a manner they reasonably believe to be in or not
opposed to the best interests of the Company and, with respect to any criminal
action or proceeding, have no reasonable cause to believe their conduct was
unlawful.
The Company's certificate of incorporation provides as follows:
"NINTH: A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit.
TENTH: (a) Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer,
of the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the General Corporation Law, as the same exists or may hereafter
be amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights than
said law permitted the Corporation to provide prior to such amendment), against
all expense, liability and loss (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that, except as provided in
paragraph (b) hereof, the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person only if such proceeding (or part thereof) was authorized by the
Board of Directors of the Corporation. The right to
18
<PAGE>
indemnification conferred in this Section shall be a contract right and shall
include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that, if the General Corporation Law requires, the payment of such
expenses incurred by a director or officer (in his or her capacity as a director
or officer and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of a
proceeding, shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such director or officer, to repay all amounts
so advanced if it shall ultimately be determined that such director or officer
is not entitled to be indemnified under this Section or otherwise. The
Corporation may, by action of its Board of Directors, provide indemnification to
employees and agents of the Corporation with the same scope and effect as the
foregoing indemnification of directors and officers.
(b) Right of Claimant to Bring Suit. If a claim under paragraph (a) of
this Section is not paid in full by the Corporation within thirty days after a
written claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expense of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the standards of conduct which make
it permissible under the General Corporation Law for the Corporation to
indemnify the claimant for the amount claimed, but the burden of proving such
defense shall be on the Corporation. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard or conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
(c) Non-Exclusivity of Rights. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Section shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, provision of
the Certificate of Incorporation, by-law, agreement, vote of stockholders or
disinterested directors or otherwise.
(d) Insurance. The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such expense, liability or
loss under the General Corporation Law."
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable
19
<PAGE>
ITEM 8. INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
4.1 Specimen Stock Certificate*
4.2 1997 Stock Option Plan of the Registrant
4.3 Form of Consultant Options
5.1 Opinion of Morse, Zelnick, Rose & Lander, LLP as to legality of
the securities being registered
23.1 Consent of Grant Thornton LLP
23.2 Consent of Morse, Zelnick, Rose & Lander, LLP (included in
Exhibit 5.1)
24 Power of Attorney (included in signature page)
- ----------
* Incorporated by reference to the Company's registration statement on Form
SB-2 No. 33-92324.
ITEM 9. UNDERTAKINGS
A. The undersigned Registrant will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any additional or changed material information on the plan of
distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of New York, State of New York on this 17th day of
November, 1997.
MILESTONE SCIENTIFIC INC.
By: /s/ Leonard Osser
-------------------------------------
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Leonard Osser, Stephen A. Zelnick, or either one
of them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all pre- or post-effective amendments to
this Registration Statement, and to file the same with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either of them, or
their or his substitutes, may lawfully do or cause to be done by virtue hereof.
21
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities indicated on November 17, 1997.
Signatures Title
- ---------- -----
/s/ Leonard Osser President, Chief Executive
- ------------------------- Officer and Director
Leonard Osser
/s/ Pat Mele III Chief Financial Officer
- -------------------------
Pat Mele III
/s/ Gregory Volok Director
- -------------------------
Gregory Volok
/s/ Michael J. McGeehan Director
- -------------------------
Michael J. McGeehan
- -------------------------- Director
Giovanni Montoncello
/s/ David Sultanik Director
- -------------------------
David Sultanik
/s/ Stephen A. Zelnick Director
- -------------------------
Stephen A. Zelnick
/s/ Paul Gregory Director
- -------------------------
Paul Gregory
/s/ Louis I. Margolis Director
- -------------------------
Louis I. Margolis
/s/ Leonard M. Schiller Director
- -------------------------
Leonard M. Schiller
/s/ Larry G. Haimovitch Director
- -------------------------
Larry M. Haimovitch
22
EXHIBIT 4.2
MILESTONE SCIENTIFIC INC.
1997 STOCK OPTION PLAN
1. PURPOSES. The purposes of this Stock Option Plan are to attract and retain
qualified personnel for positions of substantial responsibility, to provide
additional incentive to the Employees of the Company or its Subsidiaries, if any
(as defined in Section 2 below), as well as other individuals who perform
services for the Company or its Subsidiaries, and to promote the success of the
Company's business.
Options granted hereunder may be either "incentive stock options", as
defined in Section 422 of the Internal Revenue Code of 1986, as amended, or
"non-qualified stock options", at the discretion of the Board and as reflected
in the terms of the written instrument evidencing an Option.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Common Stock" shall mean the Common Stock of the Company (par value
$.001 per share.)
(c) "Company" shall mean Milestone Scientific Inc., a Delaware
corporation.
(d) "Committee" shall mean the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan, if one is
appointed.
(e) "Continuous Status as an Employee" shall mean the absence of any
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of sick leave, military
leave, or any other leave of absence approved by the Board.
(f) "Employee" shall mean any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(h) "Incentive Stock Option" shall mean a stock option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.
(i) "Non-qualified Stock Option" shall mean a stock option not intended to
qualify as an Incentive Stock Option.
(j) "Option" shall mean a stock option granted pursuant to the Plan.
(k) "Optioned Stock" shall mean the Common Stock subject to an Option.
(l) "Optionee" shall mean an Employee or other person who receives an
Option.
23
<PAGE>
(m) "Parent" shall mean a "parent corporation", whether now or hereafter
existing, as defined in Section 425(e) of the Internal Revenue Code of 1986, as
amended.
(n) "Securities Act" shall mean the Securities Act of 1933, as amended.
(o) "SEC" shall mean the Securities and Exchange Commission.
(p) "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(q) "Subsidiary" shall mean a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 425(f) of the Internal Revenue Code of
1986, as amended.
3. STOCK.
Subject to the provisions of Section 11 of the Plan, the maximum aggregate
number of shares which may be optioned and sold under the Plan is 500,000 shares
of Common Stock. If an Option should expire or become unexercisable for any
reason without having been exercised in full, the unpurchased Shares which were
subject thereto shall, unless the Plan shall have been terminated, become
available for further grant under the Plan.
4. ADMINISTRATION.
(a) Procedure. The Company's Board of Directors may appoint a Committee to
administer the Plan. The Committee shall consist of not less than three members
of the Board of Directors who shall administer the Plan on behalf of the Board
of Directors, subject to such terms and conditions as the Board of Directors may
prescribe. Once appointed, the Committee shall continue to serve until otherwise
directed by the Board of Directors. From time to time the Board of Directors may
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause), and appoint new members in substitution
therefor, fill vacancies however caused, or remove all members of the Committee
and thereafter directly administer the Plan.
If a majority of the Board of Directors is eligible to be granted Options
or has been eligible at any time within the preceding year, a Committee must be
appointed to administer the Plan. The Committee must consist of not less than
three members of the Board of Directors, all of whom are "disinterested persons"
as defined in Rule 16b-3 of the General Rules and Regulations promulgated under
the Exchange Act.
(b) Powers of the Board. Subject to the provisions of the Plan, the Board,
or the Committee shall have the authority, in its discretion: (i) to grant
Incentive Stock Options, in accordance with Section 422A of the Internal Revenue
Code of 1986, as amended, or to grant Non-qualified Stock Options; (ii) to
determine, upon review of relevant information and in accordance with Section
8(b) of the Plan, the fair market value of the Common Stock; (iii) to determine
the exercise price per share of Options to be granted which exercise price shall
be determined in accordance with Section 8(a) of the Plan; (iv) to determine the
persons to whom, and the time or times at which, Options shall be granted and
the number of shares to be represented by each Option; (v) to interpret the
Plan; (vi) to prescribe, amend and rescind rules and regulations relating to the
Plan; (vii) to determine the terms and provisions of each Option granted (which
need not be identical) and, with the consent of the holder thereof, modify or
amend each Option; (viii) to accelerate or defer (with the consent of the
Optionee) the exercise date of any Option; (ix) to authorize any person to
execute on behalf of the Company any
24
<PAGE>
instrument required to effectuate the grant of an Option previously granted by
the Board; and (x) to make all other determinations deemed necessary or
advisable for the administration of the Plan.
(c) Effect of the Board's Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.
5. ELIGIBILITY; NON-DISCRETIONARY GRANTS.
(a) General. Incentive Stock Options may be granted only to Employees.
Non-qualified Stock Options may be granted to employees as well as directors
(subject to the limitations set forth in Section 4), independent contractors and
agents, as determined by the Board. Any person who has been granted an Option
may, if he is otherwise eligible, be granted an additional Option or Options.
The Plan shall not confer upon any Optionee any right with respect to
continuation of employment by the Company, nor shall it interfere in any way
with his right or the Company's right to terminate his employment at any time.
(b) Limitation on Incentive Stock Options. No Incentive Stock Option may
be granted to an Employee if, as the result of such grant, the aggregate fair
market value (determined at the time each option was granted) of the Shares with
respect to which such Incentive Stock Options are exercisable for the first time
by such Employee during any calendar year (under all such plans of the Company
and any Parent and Subsidiary) shall exceed One Hundred Thousand Dollars
($100,000).
(c) Non-Discretionary Grants. Each director who is not an employee of the
Company or a Subsidiary should, immediately upon taking office, be granted an
option for 20,000 shares.
6. TERM OF THE PLAN. The Plan shall become effective upon the earlier to
occur of (i) its adoption by the Board of Directors, or (ii) its approval by
vote of the holders of a majority of the outstanding shares of the Company
entitled to vote on the adoption of the Plan. The Plan shall continue in effect
until May 28, 2007 unless sooner terminated under Section 13 of the Plan.
7. TERM OF OPTION. The term of each Option shall be ten (10) years from the
date of grant hereof or such shorter term as may be provided in the instrument
evidencing the Option. However, in the case of an Incentive Stock Option granted
to an Employee who, immediately before the Incentive Stock Option is granted,
owns stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the day of grant thereof or
such shorter time as may be provided in the instrument evidencing the Option.
8. EXERCISE PRICE AND CONSIDERATION.
(a) The per Share exercise price for the Shares to be issued pursuant to
the exercise of an Option shall be such price as is determined by the Board, but
shall be subject to the following:
(i) In the case of an Incentive Stock Option:
(A) granted to an Employee who, immediately before the grant
of such Incentive Stock Option, owns stock representing more
than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the per
Share exercise price shall be no less than 110% of the fair
market value per Share on the date of grant, as the case may
be;
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(B) granted to an Employee not subject to the provisions of
Section 8(a)(i)(A), the per Share exercise price shall be no
less than one hundred percent (100%) of the fair market value
per Share on the date of grant.
(ii) In the case of a Non-qualified Stock Option, the per Share
exercise price shall be no less than one hundred percent
(100%) of the fair market value per Share on the date of
grant.
(b) The fair market value shall be determined by the Board in its
discretion; provided, however, that where there is a public market for the
Common Stock, the fair market value per Share shall be the mean of the bid and
asked prices or, if applicable, the closing price of the Common Stock on the
date of grant, as reported by the National Association of Securities Dealers
Automated Quotation (NASDAQ) System or, in the event the Common Stock is listed
on a stock exchange, the fair market value per Share shall be the closing price
on such exchange on the date of grant of the Option, as reported in the Wall
Street Journal.
(c) The consideration to be paid for the Shares to be issued upon exercise
of an Option or in payment of any withholding taxes thereon, including the
method of payment, shall be determined by the Board and may consist entirely of
(i) cash, check or promissory note; (ii) other Shares of Common Stock owned by
the Employee having a fair market value on the date of surrender equal to the
aggregate exercise price of the Shares as to which said Option shall be
exercised; (iii) other Options owned by the Employee having an aggregate
in-the-money value equal to the aggregate exercise price of the Options being
exercised (Options are in-the-money if the fair market value of the underlying
Shares exceeds the exercise price of the Options),(iv) an assignment by the
Employee of the net proceeds to be received from a registered broker upon the
sale of the Shares or the proceeds of a loan from such broker in such amount; or
(v) any combination of such methods of payment, or such other consideration and
method of payment for the issuance of Shares to the extent permitted under
Delaware Law and meeting rules and regulations of the SEC to plans meeting the
requirements of Section 16(b)(3) of the Exchange Act.
9. PROCEDURES AND LIMITATIONS ON EXERCISE OF OPTIONS.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option granted
hereunder shall be exercisable at such times and subject to such conditions as
may be determined by the Board, including performance criteria with respect to
the Company and/or the Optionee, and as shall be permissable under the terms of
the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms
of the instrument evidencing the Option by the person entitled to exercise
the Option and full payment for the Shares with respect to which the
Option is exercised has been received by the Company. Full payment may, as
authorized by the Board, consist of any consideration and method of
payment allowable under Section 8(c) of the Plan; it being understood that
the Company shall take such action as may be reasonably required to permit
use of an approved payment method. Until the issuance, which in no event
will be delayed more than thirty (30) days from the date of the exercise
of the Option, (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the
stock certificate evidencing such Shares, no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to
the Optioned Stock, notwithstanding the exercise of the Option. No
adjustment will be made for a dividend or other right for which the record
date is prior to the date the stock certificate is issued, except as
provided in the Plan.
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Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes
of the Plan and for sale under the Option, by the number of Shares as to
which the Option is exercised.
(b) Termination of Status as an Employee. If any Employee ceases to serve
as an Employee, he may, but only within thirty (30) days (or such other period
of time not exceeding three (3) months as is determined by the Board) after the
date he ceases to be an Employee of the Company, exercise his Option to the
extent that he was entitled to exercise it as of the date of such termination.
To the extent that he was not entitled to exercise the Option at the date of
such termination, or if he does not exercise such Option (which he was entitled
to exercise) within the time specified herein, the Option shall terminate.
(c) Disability of an Employee. Notwithstanding the provisions of Section
9(b) above, in the event an Employee is unable to continue his employment with
the Company as a result of his total and permanent disability (as defined in
Section 105(d)(4) of the Internal Revenue Code of 1986, as amended), he may, but
only within three (3) months (or such other period of time not exceeding twelve
(12) months as is determined by the Board) from the date of disability, exercise
his Option to the extent he was entitled to exercise it at the date of such
disability. To the extent that he was not entitled to exercise the Option at the
date of disability, or if he does not exercise such Option (which he was
entitled to exercise) within the time specified herein, the Option shall
terminate.
(d) Death of Optionee. In the event of the death of an Optionee:
(i) during the term of the Option who is at the time of his death an
Employee of the Company and who shall have been in Continuous Status
as an Employee since the date of grant of the Option, the Option may
be exercised, at any time within twelve (12) months following the
date of death, by the Optionee's estate or by a person who acquired
the right to exercise the Option by bequest or inheritance, but only
to the extent of the right to exercise that would have accrued had
the Optionee continued living one (1) month after the date of death;
or
(ii) within thirty (30) days (or such other period of time not exceeding
three (3) months as is determined by the Board) after the
termination of Continuous Status as an Employee, the Option may be
exercised, at any time within three (3) months following the date of
death, by the Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to
the extent of the right to exercise that had accrued at the date of
termination.
10. NON-TRANSFERABILITY OF OPTIONS. An Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER. Subject to any
required action by the stockholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split or the payment of a stock dividend with
respect to the Common Stock or any other increase or decrease in the number of
issued shares of Common Stock effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible securities of the
Company shall not
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be deemed to have been "effected without receipt of consideration". Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the Company, or
in the event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, the
Board of Directors of the Company shall, as to outstanding Options, either (i)
make appropriate provision for the protection of any such outstanding Options by
the substitution on an equitable basis of appropriate stock of the Company or of
the merged, consolidated or otherwise reorganized corporation which will be
issuable in respect to one share of Common Stock of the Company; provided, only
that the excess of the aggregate fair market value of the shares subject to the
Options immediately after such substitution over the purchase price thereof is
not more than the excess of the aggregate fair market value of the shares
subject to such Options immediately before such substitution over the purchase
price thereof, or (ii) upon written notice to an Optionee, provide that all
unexercised Options must be exercised within a specified number of days of the
date of such notice or they will be terminated. In any such case, the Board of
Directors may, in its discretion, advance the lapse of any waiting or
installment periods and exercise dates.
12. TIME FOR GRANTING OPTIONS. The date of grant of an Option shall, for all
purposes, be the date on which the Board makes the determination granting such
Option. Notice of the determination shall be given to each person to whom an
Option is so granted within a reasonable time after the date of such grant.
13. AMENDMENT AND TERMINATION OF THE PLAN.
(a) General. The Board may amend or terminate the Plan from time to time
in such respects as the Board may deem advisable; provided, however, that the
following revisions or amendments shall require approval of the holders of a
majority of the outstanding shares of the Company entitled to vote:
(i) any increase in the number of Shares subject to the Plan, other than
in connection with an adjustment under Section 11 of the Plan;
(ii) any change in the designation of the class of persons eligible to be
granted options; or
(iii) any material increase in the benefits accruing to participants under
the Plan.
(b) Stockholder Approval. If any amendment requiring stockholder approval
under Section 13(a) of the Plan is made, such stockholder approval shall be
solicited as described in Section 17(a) of the Plan.
(c) Effect of Amendment or Termination. Any such amendment or termination
of the Plan shall not affect Options already granted and such Options shall
remain in full force and effect as if this Plan had not been amended or
terminated, unless mutually agreed otherwise between the Optionee and the Board,
which agreement must be in writing and signed by the Optionee and the Company.
14. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued pursuant to
the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated
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thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by, or appropriate
under, any of the aforementioned relevant provisions of law.
15. RESERVATION OF SHARES. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
Inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
16. OPTION AGREEMENT. Options shall be evidenced by written option agreements
in such form as the Board shall approve.
17. STOCKHOLDER APPROVAL. Continuation of the Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. If such stockholder approval is obtained at
a duly held stockholders' meeting, it may be obtained by the affirmative vote of
the holders of a majority of the outstanding shares of the Company present or
represented and entitled to vote thereon. The approval of such stockholders of
the Company shall be (1) solicited substantially in accordance with Section
14(a) of the Exchange Act and the rules and regulations promulgated thereunder,
or (2) solicited after the Company has furnished in writing to the holders
entitled to vote substantially the same information concerning the Plan as that
which would be required by the rules and regulations in effect under Section
14(a) of the Exchange Act at the time such information is furnished.
If such stockholder approval is obtained by written consent in the absence
of a Stockholders' Meeting, it must be obtained by the written consent of all
stockholders of the Company who would have been entitled to cast the minimum
number of votes which would be necessary to authorize such action at a meeting
at which all stockholders entitled to vote thereon were present and voting.
18. OTHER PROVISIONS. The Stock Option Agreement authorized under the Plan
shall contain such other provisions, including, without limitation, restrictions
upon the exercise of the Option, as the Board of Directors of the Company's
shall deem advisable. Any Incentive Stock Option Agreement shall contain such
limitations and restrictions upon the exercise of the Incentive Stock Option as
shall be necessary in order that such option will be an Incentive Stock Option
as defined in Section 422 of the Internal Revenue Code of 1986, as amended.
19. INDEMNIFICATION OF BOARD. In addition to such other rights of
indemnification as they may have as directors or as members of the Board, the
members of the Board shall be indemnified by the Company against the reasonable
expenses, including attorneys' fees actually and necessarily incurred in
connection with the defense of any action suit or proceeding, or in connection
with any appeal therein, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection with the Plan or
any Option granted thereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Company) or paid by them in satisfaction of a judgment
in any such action, suit or proceeding, except in relation to matters as to
which it shall be adjudged in such action, suit or
29
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proceeding that such Board member is liable for negligence or misconduct in the
performance of his duties, provided that within sixty (60) days after
institution of any such action, suit or proceeding a Board member shall, in
writing, offer the Company the opportunity, as its own expense, to handle and
defend the same.
20. OTHER COMPENSATION PLANS. The adoption of the Plan shall not affect any
other stock option or incentive or other compensation plans in effect for the
Company or any Subsidiary, nor shall the Plan preclude the Company from
establishing any other forms of incentive or other compensation for employees
and directors of the Company or any Subsidiary.
21. COMPLIANCE WITH EXCHANGE ACT RULE 16b-3. With respect to persons subject
to Section 16 of the Exchange Act, transactions under the Plan are intended to
comply with all applicable conditions of Rule 16b-3 or its successors under the
Exchange Act. To the extent any provision of the Plan or action by the Board
fails to so comply, it shall be deemed null and void, to the extent permitted by
law and deemed advisable by the Board.
22. SINGULAR, PLURAL; GENDER. Whenever used herein, nouns in the singular
shall include the plural, and the masculine pronoun shall include the feminine
gender.
23. HEADINGS, ETC., NO PART OF PLAN. Headings of Articles and Sections hereof
are inserted for convenience and reference; they constitute no part of the Plan.
30
EXHIBIT 4.3
MILESTONE SCIENTIFIC INC.
Stock Option Agreement
Dated: ______________
Milestone Scientific Inc. a Delaware corporation (the "Company"), grants
to __________ (the "Optionee"), a non-qualified stock option to purchase a total
of _______ shares of the Company's Common Stock, par value $.001 per share, at
the price of $______ per share on the terms and conditions set forth herein.
1. Duration.
This option shall expire five (5) years from the date hereof (the
"Termination Date").
2. Anti-Dilution Provisions.
(a) If there is any stock dividend, stock split, or combination of
shares of Common Stock of the Company, the number and amount of shares then
subject to this option shall be proportionately and appropriately adjusted; no
change shall be made in the aggregate purchase price to be paid for all shares
subject to this option, but the aggregate purchase price shall be allocated
among all shares subject to this option after giving effect to the adjustment.
(b) If there is any other change in the Common Stock of the
Company, including recapitalization, reorganization, sale or exchange of assets,
exchange of shares, offering of subscription rights, or a merger or
consolidation in which the Company is the surviving corporation, an adjustment,
if any, shall be made in the shares then subject to this option as the Board of
Directors may deem equitable. Failure of the Board of Directors to provide for
an adjustment pursuant to this subparagraph prior to the effective date of any
Company action referred to herein shall be conclusive evidence that no
adjustment is required in consequence of such action.
(c) If the Company is merged into or consolidated with any other
corporation, or if it sells all or substantially all of its assets to any other
corporation, then either (i) the Company shall cause provisions to be made for
the continuance of this option after such event, or for the substitution
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for this option of an option covering the number and class of securities which
the Optionee would have been entitled to receive in such merger or consolidation
by virtue of such sale if the Optionee had been the holder of record of a number
of shares of Common Stock of the Company equal to the number of shares covered
by the unexercised portion of this option, or (ii) the Company shall give to the
Optionee written notice of its election not to cause such provision to be made
and this option shall become exercisable in full (or, at the election of the
Optionee, in part) at any time during a period of 20 days, to be designated by
the Company, ending not more than 10 days prior to the effective date of the
merger, consolidation or sale, in which case this option shall not be
exercisable to any extent after the expiration of such 20-day period. In no
event, however, shall this option be exercisable after the Termination Date.
3. Investment Representation; Legend on Certificates; Special
Restriction on Resale.
The Optionee agrees that until such time as a registration statement
under the Securities Act of 1933 becomes effective with respect to the option
and/or the stock, the Optionee is taking this option and will take the stock
underlying this option, for his own account, for investment and not with a view
to the resale or distribution thereof. The Company shall have the right to place
upon the face of any stock certificate or certificates evidencing shares
issuable upon the exercise of this option such legend as the Board of Directors
may prescribe for the purpose of preventing disposition of such shares in
violation of the Securities Act of 1933, as now or hereafter provided.
4. Non-Transferability.
This option shall not be transferable by the Optionee other than by
will or by the laws of descent or distribution, and is exercisable during the
lifetime of the Optionee only.
5. Certain Rights Not Conferred by Option.
The Optionee shall not, by virtue of holding this option, be
entitled to any rights of a stockholder in the Company.
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6. Expenses.
The Company shall pay all original issue and transfer taxes with
respect to the issuance and transfer of shares of Common Stock of the Company
pursuant hereto and all other fees and expenses necessarily incurred by the
Company in connection therewith.
7. Exercise of Options.
(a) This option shall become exercisable in accordance with its
terms, as follows:
_____ shares commencing on the first anniversary of the date of
grant;
_____ additional shares commencing on each of the second and third
anniversaries of the date of grant; provided the Optionee
shall then be an employee or director of or consultant to the
Company (including serving as a consultant to the Company
through an affiliated entity), or shall have previously
fulfilled his duties under his Consultant Agreement with the
Company.
(b) An option shall be exercisable by written notice of such
exercise, in the form prescribed by the Board of Directors to the Secretary or
Treasurer of the Company, at its principal office. The notice shall specify the
number of shares for which the option is being exercised (which number, if less
than all of the shares then subject to exercise, shall be 50 or a multiple
thereof) and shall be accompanied by payment (i) in cash or by check in the
amount of the full exercise price of such options, (ii) made by the surrender to
the Company of that number of Options having an aggregate spread value (ie. the
difference between the exercise price of an Option and the closing price per
Share on the American Stock Exchange on the date of the written notice of
exercise) equal to the aggregate exercise price of the Options being exercised,
or (iii) in such other manner as the Board or the Committee shall deem
acceptable. No shares shall be delivered upon exercise of any option until all
laws, rules and regulations which the Board of Directors may deem applicable
have been complied with.
(c) The person exercising an option shall not be considered a record
holder of the stock so purchased for any purpose until the date on which he is
actually recorded as the holder of such stock in the records of the Company.
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(d) If the Optionee hold and exercisable option at the time of his
death or then this option shall be exercisable by his personal representative
for a period ending on the earlier of (i) one year from the date of death or
permanent disability or (ii) the date on which the option expires in accordance
with its terms.
8. Continued Employment.
Nothing herein shall be deemed to create any employment agreement or
guaranty of continued employment or limit in any way the Company's right to
terminate Optionee's employment or consulting arrangement at any time.
MILESTONE SCIENTIFIC INC.
By:__________________________________
Accepted as of the date
first set forth above.
_________________________________
Optionee
34
EXHIBIT 5.1
MORSE, ZELNICK, ROSE & LANDER
A LIMITED LIABILITY PARTNERSHIP
450 PARK AVENUE
NEW YORK, NEW YORK 10022-2605
212 838 1177
FAX 212 838 9190
November 17, 1997
Milestone Scientific Inc.
220 South Orange Avenue
Livingston Corporate Park
Livingston, New Jersey 07039
Re: Registration Statement on Form S-8
Dear Sirs:
We have acted as counsel to Milestone Scientific Inc., a Delaware
corporation (the "Company"), in connection with the preparation of a
registration statement on Form S-8 (the "Registration Statement") to be filed
with the Securities and Exchange Commission ("the SEC") under the Securities Act
of 1933, as amended (the "Act"), to register the offering by the Company of
shares of Common Stock par value $.001 per share (the "Shares") issuable upon
exercise of options granted and to be granted under the Company's 1997 Stock
Option Plan (the "Option Plan") and 199,000 Shares upon exercise of options
granted to consultants and agents of the Company ("Consultant Options").
In this regard, we have reviewed the Certificate of Incorporation of the
Company, as amended, resolutions adopted by the Company's Board of Directors,
the Option Plan, the form of Options granted thereunder, the form of Consultant
Options and such other records, documents, statutes and decisions as we have
deemed relevant in rendering this opinion.
Based upon the foregoing, we are of the opinion that the Shares issuable
upon exercise of the options granted and to be granted pursuant to the Option
Plan and the Shares issuable upon the exercise of the Consultant Options have
been duly and validly authorized for issuance and when issued and delivered as
contemplated by such options and the Consultant Options will be legally issued,
fully paid and non-assessable.
We hereby consent to the use of this opinion as Exhibit 5.1 to the
Registration Statement. In giving this opinion, we do not hereby admit that we
are acting within the category of persons whose
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consent is required under Section 7 of the Act or the rules and regulations of
the SEC thereunder. Members of the firm own the securities of the Company
described in Part II-Item 5 of the Registration Statement.
Very truly yours,
/s/ Morse, Zelnick, Rose & Lander, LLP
-----------------------------------------
Morse, Zelnick, Rose & Lander, LLP
36
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our reports dated February 5, 1997, except for Notes J and P, as
to which the dates are February 26, and February 20, 1997, accompanying the
consolidated financial statements of Milestone Scientific Inc. and subsidiaries
appearing in the Annual Report on Form 10-KSB for the year ended December 31,
1996 which are incorporated by reference in this Registration Statement. We
consent to the incorporation by reference in the Registration Statement of the
aforementioned reports.
/s/ Grant Thornton LLP
New York, New York
November 11, 1997
