Concentration of Credit Risk

9 Months Ended

Sep. 30, 2011

Concentration of Credit Risk [Abstract]

CONCENTRATION OF CREDIT RISK

NOTE — 6 CONCENTRATION OF CREDIT RISK

Milestone’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and trade accounts receivable, and advances to contract manufacturer. Milestone places its cash and cash equivalents with large financial institutions. At times, such investments may be in excess of the Federal Deposit Insurance Corporation insurance limit. Milestone has not experienced any losses in such accounts and believes it is not exposed to any significant credit risks. Financial instruments which potentially subject Milestone to credit risk consist principally of trade accounts receivable, as Milestone does not require collateral or other security to support customer receivables, and advances to contract manufacturer. Milestone entered into a purchase agreement with a vendor to supply Milestone with 5,000 instruments of CompuDent and 12,000 STA Instruments. As part of these agreements, Milestone has advanced approximately $3,335,020 and $2,444,285 to the vendor for purchase of materials at September 30, 2011 and December 31, 2010, respectively. The advance will be credited to Milestone as the goods are delivered. Milestone does not believe that significant credit risk exists with respect to this advance to the contract manufacturer.

Milestone closely monitors the extension of credit to its customers while maintaining allowances, if necessary, for potential credit losses. On a periodic basis, Milestone evaluates its accounts receivable and establishes an allowance for doubtful accounts, based on a history of past write-offs and collections and current credit conditions. Management has provided a reserve that it believes is sufficient record accounts receivable at net realizable value as of September 30, 2011 and December 31, 2010.

A five percent shareholder of the Company is also a major supplier of handpieces to the Company and additionally, is a member of the PRC entity which entered into a joint venture agreement with the Milestone as described in Note 4. The Company purchased $1,235,809 and $1,772,105 from the supplier for the period ended September 30, 2011 and 2010, respectively. The Company owes $944,541 and $1,118,757 to this supplier as of September 30, 2011 and December 31, 2010, respectively.