NOTE

– 9 SIGNIFICANT CUSTOMERS & GEOGRAPHICAL INFORMATION

Milestone Scientific has informal arrangements with the manufacturer of the STA, CompuDent® and CompuMed® instruments, pursuant to which they manufacture these products under specific purchase orders but without any long-term contract or minimum purchase commitment.

The Company has open purchase orders with a contract manufacturer to manufacture STA instruments. The contract manufacturer bills Wand Dental as the work progresses and it is Wand Dental’s policy to record these billings as advances on contracts. These advances are reclassified into inventory when the contract manufacturer ships the product and title passes to Wand Dental. The advances on contracts represent funding of future STA inventory purchases. The balance of the advances as of June 30, 2016 and December 31, 2015 is $1,170,863 and $1,171,604, respectively. The advance is classified as current, based on the estimated annual usage of the underlying inventory

Milestone Scientific has a manufacturing agreement with one of the principal manufacturers, which is a related party, of its handpieces pursuant to which they manufacture products under specific purchase orders but without minimum purchase commitments. A five percent shareholder of Milestone Scientific is also a shareholder of this vendor. Purchases from this supplier were $1,121,226 and $1,353,632 for the six months ended June 30, 2016 and 2015, respectively. Milestone Scientific owed $687,522 and $455,573 to this supplier as of June 30, 2016 and 2015, respectively

For the six months ended June 30, 2016, and 2015 Milestone Scientific had three customers (distributors) that had approximately 38%, 22% and 12%, and 26%, 11% and 11%, respectively, of its net product sales. Accounts receivable for two of the major customers amounted to approximately $972,000 and $1,156,000 of gross accounts receivable for the six month ended June 30, 2016. Milestone Scientific had gross accounts receivable for three major customers that amounted to $1,150,101, ($263,861, $346,839 and $539,400) as of June

30, 2015.

Milestone Scientific

’s sales by product category and by geographical region are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
DOMESTIC
Instruments	$	190,504	$	153,325	$	852,149	$	602,290
Handpieces		695,761		673,062		1,753,685		1,105,124
Other		20,652		15,229		34,126		1,762
Total Domestic	$	906,917	$	841,616	$	2,639,960	$	1,709,176

INTERNATIONAL
Instruments	$	535,335	$	136,430	$	1,559,050	$	814,044
Handpieces		882,135		757,079		1,537,124		1,971,531
Other		47,323		31,635		100,062		42,212
Total International	$	1,464,793	$	925,144	$	3,196,236	$	2,827,787

Total Product Sales	$	2,371,710	$	1,766,760	$	5,836,196	$	4,536,963