Commitments and Other

12 Months Ended

Dec. 31, 2011

Commitments and Other [Abstract]

COMMITMENTS AND OTHER

NOTE O — COMMITMENTS AND OTHER

(1) Lease Commitments

The headquarters for the Company is located at 220 South Orange Ave, Livingston, New Jersey. The Company leases approximately 6,300 square feet of office space at 220 South Orange Avenue in Livingston, New Jersey. The lease term expires June 30, 2014 at a monthly cost of $6,942 which Milestone believes to be competitive. The leased office space is in good condition. Additionally, Milestone leased a corporate apartment in Maplewood, NJ. This lease expired in November 2010 at a monthly cost of $4,000. The Company terminated the lease in December 2011. A third party distribution and logistics center in Pennsylvania handles shipping and order fulfillment on a month-to-month basis. Milestone also leases office and telecom equipment under operating leases with payments ranging from $130-$522 per month.

Aggregate minimum rental commitments under noncancelable operating leases are as follows:

		September 30,
2012	$	83,828
2013		83,306
2014		41,653
	$	208,786

For the years ended December 31, 2011 and 2010, respectively, rent expense amounted to approximately $130,806 and $144,954 respectively.

(2) Contract Manufacturing Arrangement

Milestone has informal arrangements for the manufacture of its products. STA, single tooth anesthesia, CompuDent and CompuMed instruments are manufactured for Milestone by Tricor Systems, Inc. pursuant to specific purchase orders. The Wand disposable handpiece is manufactured for Milestone in Mexico pursuant to scheduled production requirements. The STA and The Wand Handpiece with Needle is supplied to Milestone by a contractor in the United States, which arranges for its manufacturer in China. These contractors provide an informal long term financing basis for the Company.

The termination of the manufacturing relationship with any of the above manufacturers could have a material adverse effect on Milestone’s ability to produce and sell its products. Although alternate sources of supply exist and new manufacturing relationships could be established, Milestone 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 interruption of the supply, whether or not as a result of termination of such a relationship, would adversely affect Milestone.

(3) Other Commitments

The technology underlying the SafetyWand and CompuFlo, and an improvement to the controls for CompuDent were developed by the Director of Clinical Affairs and assigned to us. Milestone purchased this technology pursuant to an agreement dated January 1, 2005, for 43,424 shares of restricted common stock and $145,000 in cash, payable on April 1, 2005. In addition, the Director will receive additional payments of 2.5% of the total sales of products using certain of these technologies, and 5% of the total sales of products using certain other of the technologies. In addition, he is granted, pursuant to the agreement, an option to purchase, at fair market value on the date of the grant, 8,333 shares of the common stock upon the issuance of each additional patent relating to these technologies. If products produced by third parties use any of these technologies (under license from us) then he will receive the corresponding percentage of the consideration received by Milestone for such sale or license. Milestone expensed the Director’s royalty fees of $291,783 and $344,786 in 2011 and 2010, respectively. Additionally, Milestone expensed consulting fee to the Director $156,000 for year ended 2011 and 2010, and granted him 16,666 options, in 2010.

In January 2010, the Company issued a purchase order to Tricor Instruments for the purchase of 12,000 STA Instruments to be delivered over the next three years. The purchase order is for $5,261,640. The Company will be required to make periodic payments over the next eighteen months to purchase the parts necessary to complete this production. As of December 31, 2011, the Company’s production and sales of instruments to this commitment has been delayed. Consequently, advances to contractor has been classified as current and long term at December 31, 2011.

(4) Subsequent Events

On February 1, 2012, Milestone, announced that it closed on a $150,000 offshore offering of Common Stock at $1.40 per share. This offering resulted in the issuance of 107,142 shares of Common Stock. The Company has reviewed events for inclusion in their financial statements through the date of filing its financial statements with the SEC.