Note Q - Related Party Transzactions

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE Q

 -- RELATED PARTY TRANSACTIONS

 

        Milestone Scientific has a manufacturing agreement with United Systems (an entity controlled by a significant stockholder of Milestone), the principal manufacturers of its handpieces, pursuant to which it manufactures products under specific purchase orders, but without minimum purchase commitments. Purchases from this manufacturer were

$2,146,108

and

$3,025,249

for the

twelve

months ended

December 31, 2017

and

2016,

respectively. Milestone Scientific owed

$985,678

and

$1,235,052

to this manufacturer as of

December 31, 2017

and

2016,

respectively.

 

  Milestone Scientific had

$2,071,000

of related party sales of handpieces and instruments to Milestone China and Milestone China’s agent for

twelve

months ended

December 31, 2017.

Milestone Scientific had

$3,425,000

of related party sales of handpieces and instruments to Milestone China for

twelve

months ended

December 31, 2016.

As of

December 31, 2017,

and

2016,

Milestone Scientific recorded deferred revenues and deferred costs associated with sales to Milestone China of

$1,725,450

and

$1,109,671,

and

$1,001,800

and

$620,041,

respectively.  As of

December 31, 2017,

and

2016,

Milestone China and Milestone China’s agent owed

$1,725,450

and

$2,714,600,

respectively, to Milestone Scientific which is included in related party accounts receivable on the consolidated balance sheets. Milestone Scientific defers the total revenue and costs of goods sold when instruments and handpieces are shipped to Milestone China and Milestone China’s agent due to market conditions and Milestone China liquidity concerns.

 

In

August 2016,

a stockholder of Milestone Scientific entered a

three

-year agreement with Milestone Scientific to provide financial and business strategic services. Expenses recognized on this agreement were

$100,000

for the

twelve

months ended

December 31, 2017

and

2016,

respectively.

In

January 2017,

Milestone Scientific entered into a

12

-month agreement with Innovest S.p.A. to provide consulting service. This agreement is expected to continue into

2018.

 Expenses recognized on this agreement were

$80,000

for the

twelve

months ended

December 31, 2017.

See Note M for related party employment and consulting agreements.