Note 12 - Concentrations

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

NOTE

12

 -- CONCENTRATIONS

Milestone Scientific has informal arrangements with

third

-party manufacturers of the STA, epidural, and intra-articular devices, pursuant to which they manufacture these products under specific purchase orders but without any long-term contract or minimum purchase commitment. Consequently, advances on contracts have been classified as current on

June 30, 2020 

and

December 31, 2019. 

The termination of the manufacturing relationship with any of these manufacturers could have a material adverse effect on Milestone Scientific's ability to produce and sell its products. Although alternate sources of supply exist, and new manufacturing relationships could be established, Milestone Scientific 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, because of termination of such a relationship, would have a material adverse effect on Milestone Scientific's financial condition, business, and results of operations.              

For the

six

months ended

June 30, 2020,

and

2019

an aggregate of approximately

37%

and

50%

of the Company's net product sales were from

one

domestic distributor, respectively. For the

three

months ended

June 30, 2020

net product sales were

40%

from

one

domestic distributor and

23%

from

one

international distributor. For the

three

months ended

June 30, 2019

an aggregate of approximately

52%

of the Company's product sales were to

one

domestic customer/distributor. Accounts receivable for the domestic and international distributor amounted to approximately or

61%

and

0%,

of Milestone Scientific's gross accounts receivable as of

June 30, 2020,

respectively. Accounts receivable for the major domestic customer/distributor amounted to approximately or

77%,

of Milestone Scientific's gross accounts receivable as of

December 31, 2019.  

The COVID-

19

pandemic affected the Company's operations in the

second

quarter and

may

continue to do so indefinitely thereafter. The Company is continuously monitoring its own operations and intends to take appropriate actions to mitigate the risks arising from the COVID-

19

pandemic to the best of its abilities, but there can be

no

assurances that the Company will be successful in doing so. To the extent the Company is able to obtain information about and maintain communications with its customers, suppliers, vendors, and other business partners, the Company will seek to minimize disruptions to its supply chain and distribution channels, but many circumstances will be beyond the Company's control. Governmental action

may

further cause the Company to temporarily close its facilities and/or regional quarantines

may

result in labor shortages and work stoppages. All of these factors

may

have far reaching direct and indirect impacts on the Company's business, operations, and financial results and condition. The ultimate extent of the effects of the COVID-

19

pandemic on the Company is highly uncertain and will depend on future developments which cannot be predicted.