10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended September 30, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to

Commission file number 001-14053 

Milestone Scientific Inc.

(Exact name of registrant as specified in its charter)  

Delaware	13-3545623
State or other jurisdiction of Incorporation or organization	(I.R.S. Employer Identification No.)

425 Eagle Rock Avenue Suite 403, Roseland, NJ 07068

(Address of principal executive offices)

Registrant’s telephone number, including area code: 973-535-2717

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, par value $.001 per share	NYSE American

Securities registered pursuant to section 12(g) of the Act:                    NONE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  ☑ Yes    ☐   No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  ☑ Yes   ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☑
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ☐ Yes    ☑ No

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of Exchange on which registered
Common Stock	MLSS	NYSE American

As of  November 16, 2020, the registrant has a total of 63,693,469 shares of Common Stock, $0.001 par value outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None  

MILESTONE SCIENTIFIC INC.

Form 10-Q 

TABLE OF CONTENTS

	PART I—FINANCIAL INFORMATION
Item 1.	Unaudited Condensed Consolidated Financial Statements
	Balance Sheets as of September 30, 2020  and December 31, 2019	4
	Statements of Operations for the three and nine months ended September 30, 2020 and 2019	5
	Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2020 and 2019	6
	Statements of Cash Flows for the nine months ended September 30, 2020 and 2019	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
	PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36
Signatures		37

2

FORWARD-LOOKING STATEMENTS

When used in this Quarterly Report on Form 10-Q, the words “may”, “will”, “should”, “expect”, “believe”, “anticipate”, “continue”, “estimate”, “project”, “intend” and similar expressions are intended to identify forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) regarding events, conditions and financial trends that may affect Milestone Scientific’s future plans of operations, business strategy, results of operations and financial condition. Milestone Scientific wishes to ensure that such statements are accompanied by meaningful cautionary statements pursuant to the safe harbor established in the Private Securities Litigation Reform Act of 1995. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Milestone Scientific’s plans and objectives are based, in part, on assumptions involving the continued expansion of its business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of Milestone Scientific. Although Milestone Scientific believes that its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate. Considering the significant uncertainties inherent in the forward-looking statements included herein, our history of operating losses that are expected to continue during the ongoing COVID-19 pandemic, the early stage operations of and relative lack of acceptance of our medical products, relying exclusively on two third parties to manufacture our products, changes in our informal manufacturing arrangements made by the manufacturers of our products and disruptions at the manufacturing facilities of our manufacturers exposes us to risks that may harm our business, restrict our operations or require us to relinquish proprietary rights, if physicians do not accept or use our CompuFlo® Epidural Computer Controlled Anesthesia System our ability to generate revenue from sales will be materially impaired, exposure to the risks inherent in international sales and operations, including China, and developments by competitors may render our products or technologies obsolete or non-competitive, the inclusion of such information should not be regarded as a representation by Milestone Scientific or any other person that the objectives and plans of Milestone Scientific will be achieved. Prospective investors are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and the actual results may differ materially from those included within the forward-looking statements as a result of various factors. Such forward-looking statements should, therefore, be considered in light of various important factors, including those set forth herein and others set forth from time to time in Milestone Scientific’s reports, including without limitation, Milestone Scientific's Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission (the “SEC”). Milestone Scientific disclaims any intent or obligation to update such forward-looking statements. 
 
Milestone Scientific is the owner of the following registered U.S. trademarks: CompuDent®; CompuMed®; CompuFlo®; DPS Dynamic Pressure Sensing technology®; Milestone Scientific ®; the Milestone logo ®; SafetyWand®; STA Single Tooth Anesthesia Device®; and The Wand ®.

3

Part I- Financial Information

Item 1. Financial Statements

MILESTONE SCIENTIFIC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	September 30, 2020			December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	14,448,903		$	1,516,272
Accounts receivable, net		962,983			1,710,665
Prepaid expenses and other current assets		527,059			519,063
Inventories, net		2,229,760			1,620,509
Advances on contracts		723,084			710,662
Total current assets		18,891,789			6,077,171
Furniture, fixtures and equipment, net		31,311			44,976
Patents, net		342,501			382,260
Right of use assets		655,870			15,977
Other assets		24,150			35,905
Total assets	$	19,945,621		$	6,556,289
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	666,094			1,379,425
Accounts payable, related party		393,090			1,358,752
Accrued expenses and other payables		1,147,698			775,055
Accrued expenses, related party		593,625			1,057,958
Current portion of finance leases		7,903			3,904
Current operating lease right-of-use liabilities		68,934			12,072
Note payable		276,180			-
Deferred profit, related party		340,476			340,476
Total current liabilities		3,494,000			4,927,642
Finance lease liabilities, non-current		30,624			-
Operating lease right-of-use liabilities		576,407			-
Total liabilities	$	4,101,031		$	4,927,642
Commitments and contingencies
Stockholders’ equity
Common stock, par value $.001; authorized 75,000,000 shares; 63,605,119 shares issued and 63,571,786 shares outstanding as of September 30, 2020; 49,410,176 shares issued and 49,376,843 shares outstanding as of December 31, 2019;		63,605			49,410
Additional paid in capital		116,577,241			96,082,324
Accumulated deficit		(99,806,352	)		(93,524,297	)
Treasury stock, at cost, 33,333 shares		(911,516	)		(911,516	)
Total Milestone Scientific Inc. stockholders' equity		15,922,978			1,695,921
Noncontrolling interest		(78,388	)		(67,274	)
Total stockholders’ equity		15,844,590			1,628,647
Total liabilities and stockholders’ equity	$	19,945,621		$	6,556,289

  The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

4

MILESTONE SCIENTIFIC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the three months ended September 30, 2020			For the three months ended September 30, 2019			For the Nine months ended September 30, 2020			For the Nine months ended September 30, 2019
Product sales, net	$	1,246,110		$	1,899,821		$	3,225,170		$	6,073,580
Cost of products sold		409,621			523,672			1,024,947			1,894,550
Gross profit		836,489			1,376,149			2,200,223			4,179,030
Selling, general and administrative expenses		2,291,779			2,314,943			8,221,359			6,941,964
Research and development expenses		21,438			7,940			237,089			109,815
Total operating expenses		2,313,217			2,322,883			8,458,448			7,051,779
Loss from operations		(1,476,728	)		(946,734	)		(6,258,225	)		(2,872,749	)
Interest expense		(569	)		(2,449	)		(8,727	)		(6,067	)
Change in fair value of derivative liability		-			(1,899,484	)		-			(1,846,761	)
Loss before provision for income taxes and net of equity investments		(1,477,297	)		(2,848,667	)		(6,266,952	)		(4,725,577	)
Provision for income taxes		(24,717	)		(1,250	)		(26,217	)		(19,877	)
Loss before equity in net earnings (losses) of equity investments		(1,502,014	)		(2,849,917	)		(6,293,169	)		(4,745,454	)
Earnings from China Joint Venture		-			-			-			49,099
Net loss		(1,502,014	)		(2,849,917	)		(6,293,169	)		(4,696,355	)
Net loss attributable to noncontrolling interests		11,025			12,941			35,501			35,343
Net loss attributable to Milestone Scientific Inc.	$	(1,490,989	)	$	(2,836,976	)	$	(6,257,668	)	$	(4,661,012	)
Net loss per share applicable to common stockholders—
Basic		(0.02	)		(0.06	)		(0.11	)		(0.11	)
Diluted		(0.02	)		(0.06	)		(0.11	)		(0.11	)
Weighted average shares outstanding and to be issued—
Basic		65,817,132			47,721,732			56,478,151			43,311,984
Diluted		65,817,132			47,721,732			56,478,151			43,311,984

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

5

MILESTONE SCIENTIFIC INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

FOR NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019

(UNAUDITED)

	Preferred Stock Shares		Preferred Stock		Common Stock Share		Common Stock Amount		Additional Paid in Capital			Accumulated Deficit			Noncontrolling Interest			Treasury Stock			Total
Balance, January 1, 2020		-		-		49,410,176	$	49,410	$	96,082,324		$	(93,524,297	)	$	(67,274	)	$	(911,516	)	$	1,628,647
Stock based compensation		-		-		-		-		30,715			-			-			-			30,715
Common stock issued to employee for compensation		-		-		22,633		23		14,989			-			-			-			15,012
Common stock to be issued for payment of consulting services		-		-		-		-		25,000			-			-			-			25,000
Common stock to be issued to employees for bonuses		-		-		-		-		171,046			-			-			-			171,046
Common stock issued for warrants		-		-		460,725		460		229,902			-			-			-			230,362
Net loss		-		-		-		-					(1,600,215	)		(12,738	)		-			(1,612,953	)
Balance, March 31, 2020		-		-		49,893,534	$	49,893	$	96,553,976		$	(95,124,512	)	$	(80,012	)	$	(911,516	)	$	487,829
Stock based compensation		-		-		-		-		23,946			-			-			-			23,946
Common stock issued to employee for compensation		-		-		11,450		11		14,989			-			-			-			15,000
Common stock issued for payment of consulting services		-		-		278,581		279		381,520			-			-			-			381,799
Common stock issued to board of directors for services		-		-		39,233		39		53,967			-			-			-			54,006
Common stock issued to employees for bonuses		-		-		202,617		203		(203	)		-			-			-			-
Common stock to be issued to employees for bonuses		-		-						462,504			-			-			-			462,504
Common stock issued in public offering April 6,2020		-		-		5,420,000		5,420		4,621,022			-			-			-			4,626,442
Common stock issued in public offering-June 30, 2020		-		-		6,770,000		6,770		13,410,074			-			-			-			13,416,844
Acquired controlling interest in Milestone Advanced Cosmetic Systems		-		-									(24,387	)		24,387			-			-
Common stock issued for warrants		-		-		620,750		621		718,029			-			-			-			718,650
Net loss		-											(3,166,464	)		(11,738	)		-			(3,178,202	)
Balance, June 30, 2020		-		-		63,236,165	$	63,236	$	116,239,824		$	(98,315,363	)	$	(67,363	)	$	(911,516	)	$	17,008,818
Stock based compensation		-		-						18,392			-			-			-			18,392
Common stock issued to employee for compensation		-		-		7,692		8		14,992			-			-			-			15,000
Common stock issued for payment of consulting services		-		-		112,140		113		227,928			-			-			-			228,041
Common stock issued to board of directors for services		-		-		16,350		16		29,984			-			-			-			30,000
Common stock issued to employees for bonuses		-		-		180,272		180		9,422			-			-			-			9,602
Common stock issued for warrants		-		-		52,500		52		36,699			-			-			-			36,751
Net loss		-											(1,490,989	)		(11,025	)		-			(1,502,014	)
Balance, September 30, 2020		-		-		63,605,119	$	63,605	$	116,577,241		$	(99,806,352	)	$	(78,388	)	$	(911,516	)	$	15,844,590

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

6

	Preferred Stock Shares			Preferred Stock			Common Stock Share			Common Stock Amount			Additional Paid in Capital			Accumulated Deficit			Noncontrolling Interest			Treasury Stock			Total
Balance, January 1, 2019		7,000		$	7			36,329,600		$	36,330		$	88,414,718		$	(85,999,929	)	$	(11,402	)	$	(911,516	)	$	1,528,208
Stock based compensation		-			-			-			-			56,988			-			-			-			56,988
Common stock to be issued to employees for bonuses		-			-			175,715			175			61,325			-			-			-			61,500
Common stock to be issued for payment of consulting services		-			-			118,115			118			39,882			-			-			-			40,000
Common stock to be issued to employee for compensation		-			-			22,727			23			7,477			-			-			-			7,500
Common stock to be issued to board of directors for services rendered		-			-			20,588			21			6,979			-			-			-			7,000
Common stock issued in public offering		-			-			6,282,400			6,281			1,968,265			-			-			-			1,974,546
Common stock issued in private offering		-			-			714,286			714			249,286			-			-			-			250,000
Reclassification of warrants and Shares to be issued to derivative liability (Note 9)		-			-			-			-			(406,045	)		-			-			-			(406,045	)
Net loss		-			-			-			-			-			(782,752	)		(10,443	)		-			(793,195	)
Balance, March 31, 2019		7,000		$	7			43,663,431		$	43,662		$	90,398,875		$	(86,782,681	)	$	(21,845	)	$	(911,516	)	$	2,726,502
Stock based compensation		-			-			-			-			44,712			-			-			-			44,712
Common stock issued for payment of consulting services		-			-			265,140			265			139,735			-			-			-			140,000
Common stock to be issued to employee for compensation		-			-			41,667			42			14,958			-			-			-			15,000
Common stock to be issued to board of directors for services rendered		-			-			82,442			82			29,918			-			-			-			30,000
Conversion of Preferred Shares to Common Stock (Mandatory)		(7,000	)		(7	)		5,982,906			5,983			(5,976	)		-			-			-			-
Reclassification of warrants and Shares to be issued to derivative liability (Note 9)		-			-			(2,903,366	)		(2,902	)		(1,062,637	)		-			-			-			(1,065,539	)
Net loss		-			-			-			-			-			(1,041,284	)		(11,959	)		-			(1,053,243	)
Balance, June 30, 2019		-		$	-			47,132,220		$	47,132		$	89,559,585		$	(87,823,965	)	$	(33,804	)	$	(911,516	)	$	837,432
Stock based compensation		-			-			-			-			45,147			-			-			-			45,147
Common stock to issued for payment of consulting services		-			-			316,824			317			122,683			-			-			-			123,000
Common stock to issued for payment of consulting services		-			-			202,325			202			113,298			-			-			-			113,500
Common stock to be issued to employees for bonuses		-			-			170,454			170			149,830			-			-			-			150,000
Common stock to be issued to employee for compensation		-			-			18,072			18			14,982			-			-			-			15,000
Common stock to be issued to board of directors for services rendered		-			-			44,408			44			29,956			-			-			-			30,000
Common stock issued for warrants exercised		-			-			57,750			58			28,817			-			-			-			28,875
Shares issued previously classified as derivative liability (Note 9)		-			-			692,281			693			410,026			-			-			-			410,719
Reclassification of warrants and Shares to be issued to derivative liability (Note 9)		-			-			(435,260	)		(435	)		(308,065	)		-			-			-			(308,500	)
Net loss		-			-			-			-			-			(2,836,976	)		(12,941	)		-			(2,849,917	)
Balance, September 30, 2019		-			-			48,199,074		$	48,199		$	90,166,259		$	(90,660,941	)	$	(46,745	)	$	(911,516	)	$	(1,404,744	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

7

MILESTONE SCIENTIFIC INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED) 

	For the Nine months ended September 30, 2020			For the Nine months ended September 30, 2019
Cash flows from operating activities:
Net loss	$	(6,293,169	)	$	(4,696,355	)
Adjustments to reconcile net loss to net cash used in operating activities:		-
Depreciation expense		35,103			37,159
Amortization of patents		39,759			39,760
Stock compensation		76,611			146,847
Employees paid in stock		768,463			315,425
Expense paid in stock		644,865			292,915
Non-cash operating lease expense		30,175			-
Earnings on China joint venture		-			(49,100	)
Change in fair value of derivative liability		-			1,846,761
Changes in operating assets and liabilities:
Decrease in accounts receivable		747,682			739,195
Decrease in accounts receivable, related party		-			100,000
Decrease in other assets		11,755			(9,027	)
(Increase) decrease in inventories		(609,251	)		303,989
(Increase) decrease in advances on contracts		(12,422	)		20,289
Decrease (Increase) in prepaid expenses and other current assets		(7,996	)		(90,362	)
(Decrease) in accounts payable		(713,331	)		(465,670	)
(Decrease) in accounts payable, related party		(965,662	)		(109,989	)
Decrease in deferred cost, related party		-			50,000
Increase (decrease) in accrued expenses		431,917			(50,428	)
(Decrease) increase in accrued expenses, related party		(530,659	)		402,905
(Decrease) in deferred revenue, related party		-			(100,000	)
Net cash used in operating activities		(6,346,160	)		(1,275,686	)
Cash flows from investing activities:
Purchase of property and equipment		(21,438	)		(9,916	)
Net cash used in investing activities	$	(21,438	)	$	(9,916	)
Cash flows from financing activities:
Proceeds from exercise of warrants		985,763			28,875
Payments finance lease obligations		(4,998	)		-
Net proceeds from note payable		276,180			-
Net proceeds from Public Placement Offering		18,043,284			1,974,547
Net proceeds from Private Placement Offering		-			250,000
Net cash provided by financing activities	$	19,300,229		$	2,253,422
Net increase in cash and cash equivalents		12,932,631			967,820
Cash and cash equivalents at beginning of period		1,516,272			743,429
Cash and cash equivalents at end of period	$	14,448,903		$	1,711,249
Supplemental non-cash disclosure of cash flow information:
Shares issued to board of directors		-			67,000
Shares issued to employees for compensation		-			37,500
Shares issued to consultants in lieu of cash payments		-			416,500
Shares issued to employee for bonuses		-			211,500
Credit from United Systems for defective handpieces					(151,562	)
Initial recognition of operating lease-right of use assets		(706,071	)		(166,292	)
Initial recognition of operating lease right to used liabilities		706,071			166,292

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements 

8

MILESTONE SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)  

NOTE 1 — ORGANIZATION AND BUSINESS

All references in this report to “Milestone Scientific, Inc.,” “us,” “our,” “we,” the “Company “or “Milestone” refer to Milestone Scientific Inc., and its consolidated subsidiaries, Wand Dental, Inc., Milestone Advanced Cosmetic Inc. and Milestone Medical Inc. and affiliate, Milestone Education LLC, unless the context otherwise indicates. Milestone Scientific is the owner of the following registered U.S. trademarks: CompuDent®; CompuMed®; CompuFlo®; DPS Dynamic Pressure Sensing technology®; Milestone Scientific®; CathCheck™, the Milestone logo®; Safety Wand®; STA Single Tooth Anesthesia System®; and The Wand®. 

Milestone Scientific was incorporated in the State of Delaware in August 1989. Milestone Scientific is a medical technology research and development company that patents, designs, develops and commercializes innovative diagnostic and therapeutic injection technologies and devices for medical, dental, cosmetic, and veterinary applications. Since our inception, we have engaged in pioneering proprietary, innovative, computer-controlled injection technologies, and solutions for the medical and dental markets. Milestone Scientific has developed a proprietary, computer-controlled anesthetic delivery device, using The Wand®, a single use disposable handpiece. The device is marketed in the dental market under the trademark CompuDent®, and STA Single Tooth Anesthesia System® and in the medical market under the trademark CompuMed®. CompuDent® is suitable, for all dental procedures that require local anesthetic. CompuMed® is suitable upon regulatory approval, as required, for many medical procedures regularly performed in Plastic Surgery, Hair Restoration Surgery, Podiatry, Colorectal Surgery, Dermatology, Orthopedics, and many other disciplines. The dental devices are sold in the United States, Canada and in 60 other countries. 

During 2016, Milestone Scientific filed for 510(k) marketing clearance with the U.S. Food and Drug Administration (FDA) for both intra-articular and epidural injections with the CompuFlo® Computer Controlled Anesthesia System.  In June 2017, the FDA approved the CompuFlo® Epidural Computer Controlled Anesthesia System for epidural injections. Milestone Scientific is in the process of meeting with medical device distributors within the United States and foreign markets. Milestone Scientific’s immediate focus is on marketing its epidural device throughout the United States and Europe. To date there have been eleven medical devices sold in the United States and limited amounts sold internationally, although certain medical devices have obtained CE mark approval and can be marketed and sold in most European countries.

In December 2016, the Company received notification from the FDA that based upon the 510(k)-application submitted for intra-articular injections, we did not adequately document that the device met the equivalency standard required for 510(k) clearances. The Company provided an additional data submission to the FDA in April 2017, in support of a resubmission 510(k) application for the device. The 510(k) original application filed with FDA lapsed in January 2019. Following consultation with the FDA Office of Device Evaluation, we intended to file a new 510(k) application for the device during 2020. As of September  30, 2020, the Company has suspended the pursuit of an intra-articular 510(k) application due to the COVID-19 Pandemic. The company will revisit this project in 2021.

On April 21, 2020, Milestone Scientific announced that it had validated and integrated the new CathCheck™ feature into the CompuFlo® Epidural System. Using CathCheck™, physicians and nurses can monitor the placement of a catheter to determine the presence or absence of a pulsatile waveform (heartbeat) providing new information that can be used to determine if the catheter is in place or has become dislodged from the epidural space.

On October 13, 2020, Milestone Medical announced a Group Purchasing Agreement with Premier, a leading healthcare improvement company, utilizing an alliance of approximately 4,100 U.S. hospitals and 200,000 other providers to transform healthcare. The Agreement, which was effective November 1, 2020, allows Premier members, at their discretion, to utilize  pricing and terms pre-negotiated by Premier for the CompuFlo® Epidural System and CathCheck™. The Agreement expires on February 28, 2022.

NOTE 2-  LIQUIDITY  AND UNCERTAINTIES      

The Company has evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

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In the second quarter of 2020 the Company completed two capital raises. In April and June of 2020, the Company completed Common Stock Offerings generating net proceeds of approximately $4.6 million and $13.4 million, respectively (see Note 9). As of September 30, 2020, cash on hand was approximately $14.4 million, an increase of $13 million from December 31, 2019. With the combination of these two Common Stock Offerings, the Company has sufficient liquidity to support operations beyond a year after the condensed consolidated financial statements issue date.

The coronavirus (COVID-19) that was reported to have surfaced in Wuhan, China in December 2019 and that has now spread to other countries throughout the world has  adversely impact our operations and those of our third-party partners.  As a result of the reduced hours and closings of dental offices throughout the country and the rest of the world due to the continuing spread of COVID-19, revenues for the three and the nine months ended September 30, 2020 was adversely affected.

Although there has been  a slow pick up in dental instrument and disposable sell  through to dentists beginning in the third quarter, it is  too early to determine  what  the continuing effect COVID-19 may have on our fourth quarter revenue. In addition, it is uncertain as to  what the effect will be on the anticipated commercialization of our CompuFlo Epidural and CathCheck system as a medical device . The extent to which the coronavirus impacts our operations,  our third-party partners, the dental offices and hospital operations and demand  depends on future developments which are still highly uncertain. Such future developments could have a material adverse effect on our financial results and our ability to conduct business as expected.

NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.  Principles of Consolidation

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and include the accounts of Milestone Scientific and its wholly owned and majority owned subsidiaries, including, Wand Dental (wholly owned), Milestone Advanced Cosmetic (majority owned), Milestone Education (wholly owned) and Milestone Medical (majority owned). All significant, intra-entity transactions and balances have been eliminated in consolidation.

2. Basis of Presentation

The unaudited condensed consolidated financial statements of Milestone Scientific have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information with the instructions for Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting of normal recurring entries) necessary to fairly present such interim results. Interim results are not necessarily indicative of the results of operations which may be expected for a full year or any subsequent period. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2019, included in Milestone Scientific's Annual Report on Form 10-K.  

3.  Reclassifications

Certain reclassification has been made to the 2019 financial statements to conform to the unaudited condensed consolidated 2020 financial statement presentation. These reclassifications had no effect on net loss or cash flows as previously reported.

4.  Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to the allowance for doubtful accounts, inventory valuation, and cash flow assumptions regarding evaluations for impairment of long-lived assets and going concern considerations, and valuation allowances on deferred tax assets. Actual results could differ from those estimates.

5.  Revenue Recognition

The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To perform revenue recognition for customer arrangements the Company performs the following five steps: 

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i.	identification of the promised goods or services in the contract;
ii.	determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract;
iii.	measurement of the transaction price, including the constraint on variable consideration;
iv.	allocation of the transaction price to the performance obligations based on estimated selling prices; and
v.	recognition of revenue when (or as) the Company satisfies each performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606.

The Company derives its revenues from the sale of its products, primarily dental instruments, handpieces, and other related products. The Company sells its products through a global distribution network and that includes both exclusive and non-exclusive distribution agreements with related and third parties.

Revenue from product sales is recognized upon transfer of control of a product to a customer, generally upon date of shipment. For certain arrangements where the shipping terms are FOB destination, revenue is recognized upon delivery. The Company has no obligation on product sales for any installation, set-up, or maintenance, these being the responsibility of the buyer. Milestone Scientific's only obligation after transfer of control, except for specific contracts and arrangements  that provide for  customer right to return provisions, is the normal commercial warranty against manufacturing defects if the alleged defective unit is returned within the warranty period. 

Sales Returns

The Company records allowances for product returns as a reduction of revenue at the time product sales are recorded. Several factors are considered in determining whether an allowance for product returns is required, including the customers’ return rights and the Company’s historical experience with returns and the amount of product in the distribution channel not consumed by end users and subject to return. The Company relies on historical return rates to estimate returns. In the future, if any of these factors and/or the history of product returns change, adjustments to the allowance for product returns may be required.

 Financing and Payment

Our payment terms differ by geography and customer, but payment is generally required within 90 days from the date of shipment or delivery.

Disaggregation of Revenue

We operate in two operating segments: dental and medical. Therefore, results of our operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting. See Note 11 for revenues by geographical market, and product category for the  three and nine months ended September 30, 2020 and 2019.

6.  Variable Interest Entities

A variable interest entity ("VIE") is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the entity's economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. 

Because Milestone Scientific has a variable interest in Milestone China it considered the guidance in ASC 810, “Consolidation” as it relates to determining whether Milestone China is a VIE and, if so, identifying the primary beneficiary. Milestone Scientific would be considered the primary beneficiary of the VIE if it has both of the following characteristics:

● Power Criterion: The power to direct the activities that most significantly impact the entity’s economic performance; and

● Losses/Benefits Criterion: The obligation to absorb losses that could potentially be significant or the right to receive benefits that could potentially be significant to the VIE.

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Milestone Scientific does not have the ability to control the activities that most significantly impact Milestone China's economics and, therefore, the power criterion has not been met. Management placed the most weight on the relationship and significance of activities of Milestone China to the CEO and a group of significant shareholders, including the Milestone China CEO, which have the power to direct the activities that most significantly impact the economic performance of Milestone China. Management has concluded that Milestone Scientific is not the primary beneficiary under ASC 810. See Note 6.

7.  Cash and Cash Equivalents

Milestone Scientific considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company maintains its cash and cash equivalents in bank deposit and other interest-bearing accounts, the balances of which, at times, may exceed federally insured limits.

8.  Accounts Receivable

Milestone Scientific sells a significant amount of its product on credit terms to its major distributors. Milestone Scientific estimates losses from the inability of its customers to make payments on amounts billed. Most credit sales are due within 90 days from invoicing. There have not been any significant credit losses incurred to date. As of September 30, 2020, and December 31, 2019, accounts receivable was recorded, net of allowance for doubtful accounts of $10,000.

9.  Inventories

Inventories principally consist of finished goods and component parts stated at the lower of cost (first-in, first-out method) or net realizable value. Inventory quantities on hand are reviewed on a quarterly basis and a provision for excess, slow moving, defective, and obsolete inventory is recorded if required based on past and expected future sales, potential technological obsolescence, and product expiration requirements. The valuation allowance creates a new cost basis for the inventory, and it is not subsequently marked up through a reduction in the valuation allowance based on any changes in the underlying facts and circumstances. When the valuation allowance is initially recorded, the increase to the allowance is recognized as an increase in cost of sales. The valuation allowance is only reduced if or when the underlying inventory is sold or destroyed, at which time cost of sales recognized would include the previous adjusted cost basis. 

10.  Equity Method Investments

Investments in which Milestone Scientific can exercise significant influence, but do not control, are accounted for under the equity method of accounting and are included in the long-term assets on the Condensed Consolidated Balance Sheets. Under this method of accounting, Milestone Scientific's share of the net earnings or losses of the investee is presented below the income tax line on the  unaudited Condensed Consolidated Statements of Operations. Milestone Scientific evaluates its equity method investments whenever events or changes in circumstance indicate that the carrying amounts of such investments may be impaired. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period.

11.  Furniture, Fixture and Equipment  

Equipment is recorded at cost, less accumulated depreciation. Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets, which range from two to seven years. The costs of maintenance and repairs are charged to operations as incurred. 

12.  Intangible Assets – Patents and Developed Technology

Patents are recorded at cost to prepare and file the applicable documents with the US Patent Office, or internationally with the applicable governmental office in the respective country. The costs related to these patents are being amortized using the straight-line method over the estimated useful life of the patent. Patents and other developed technology acquired from another business entity will be amortized based on the estimated useful life of the patent. These patents and developed technology are recorded at the acquisition cost.         

13.  Impairment of Long-Lived Assets

Long-lived assets with finite lives are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company’s impairment review process is based upon an estimate of future undiscounted cash flow. Factors the Company considers that could trigger an impairment review include the following: 

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● significant under performance relative to expected historical or projected future operating results,

● significant changes in the manner of our use of the acquired assets or the strategy for our overall business

● significant negative industry or economic trends; and

● significant technological changes, which would render the technology obsolete

Recoverability of assets that will continue to be used in the Company's operations is measured by comparing the carrying value to the future net undiscounted cash flows expected to be generated by the asset or asset group. Future undiscounted cash flows include estimates of future revenues, driven by market growth rates, and estimated future costs.

14. Note Payable

On April 27, 2020, the Company, was granted a loan (the “Loan”) from Savoy Bank. in the aggregate amount of approximately $276,000, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020.

The Loan, which was in the form of a Note dated April 27, 2020, matures on April 27, 2022, and bears interest at a rate of 1.00% per annum, payable monthly commencing on November 26, 2020. The Note may be prepaid by the Borrower at any time prior to maturity with no prepayment penalties. Funds from the Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred before February 15, 2020. The Company intends to use the entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act.

15.  Research and Development

Research and development costs, which consist principally of new product development costs payable to third parties, are expense as incurred. Advance payments for the research are amortized to expense either as services are performed or over the relevant service period using the straight-line method.

16.  Income Taxes

Milestone Scientific accounts for income taxes pursuant to the asset and liability method which requires deferred income tax assets and liabilities to be computed for temporary differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.       

On September 30, 2020 and December 31, 2019, we had no uncertain tax positions that required recognition in the condensed consolidated financial statements. Milestone Scientific's policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the condensed consolidated statements of operations. No interest and penalties are present for periods open. Tax returns for the 2016, 2017, and 2018 years are subject to audit by federal and state jurisdictions. 

17.  Basic and diluted net loss per common share

Milestone Scientific presents “basic” earnings (loss) per common share applicable to common stockholders and, if applicable, “diluted” earnings (loss) per common share applicable to common stockholders pursuant to the provisions of ASC 260, “Earnings per Share”. Basic earnings (loss) per common share is calculated by dividing net income or loss applicable to common stockholders by the weighted average number of common shares outstanding and to be issued during each period. The calculation of diluted earnings per common share is like that of basic earnings per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, such as those issuable upon the exercise of stock options and warrants were issued during the period.

Since Milestone Scientific had net losses in the three and nine months ended September 30, 2020 and 2019, the assumed effects of the exercise of potentially dilutive outstanding stock options, and warrants, were not included in the calculation as their effect would have been anti-dilutive. Such outstanding options, and warrants totaled 7,477,171 and 5,004,415 on September 30, 2020 and 2019, respectively. 

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18.  Fair Value of Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market at the measurement date (exit price). We are required to classify fair value measurements in one of the following categories:

● Level 1 inputs which are defined as quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

● Level 2 inputs which are defined as inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly.

● Level 3 inputs are defined as unobservable inputs for the assets or liabilities.

Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of an input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. As of September 30, 2020 the Company does not have any assets or liabilities that were measured at fair value on a recurring basis. The carrying amounts reported in the accompanying unaudited condensed consolidated financial statements for current assets and current liabilities approximate the fair value because of the immediate or short-term maturities of the financial instruments. 

19. Derivative Liability

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks; however, the Company had certain financial instruments that qualified as derivatives and were classified as liabilities on the balance sheet during the year ended December 31, 2019. The Company evaluates all its financial instruments to determine if those instruments or any potential embedded components of those instruments qualify as derivatives that need to be separately accounted for in accordance with FASB ASC 815, “Derivatives and Hedging”. Derivatives satisfying certain criteria are recorded at fair value at issuance and marked-to-market at each balance sheet date with the change in the fair value recorded as income or expense. In addition, upon the occurrence of an event that requires a derivative liability to be reclassified to equity, the derivative liability is revalued to fair value at that date. See Note 9, Outstanding Equity Instruments in Excess of Authorized Shares.   

20.  Stock-Based Compensation

Milestone Scientific accounts for stock-based compensation under ASC Topic 718, "Compensation - Stock Compensation". ASC Topic 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the Statements of Operations over the service period, as an operating expense, based on the grant-date fair values.

21. Leases

At the inception of an arrangement, we determine whether an arrangement is, or contains, a lease. An arrangement is, or contains, a lease if the arrangement conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Leases with a term greater than one year are generally recognized on the balance sheet as right-of-use assets and current and non-current lease liabilities, as applicable. We have elected not to recognize on the balance sheet leases with terms of 12 months or less. We typically only include the initial lease term in our assessment of a lease arrangement. Options to extend a lease are not included in our assessment unless there is reasonable certainty that we will renew.

Finance and operating lease right-of-use assets represent the Company’s right to use an underlying asset over the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. These assets and obligations are recognized at the lease commencement date based on the present value of lease payments, net of incentives, over the lease term. The interest rate implicit in our leases is typically not readily determinable. As a result, we utilize our incremental borrowing rate, which reflects the fixed rate at which we could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.

We evaluate the classification of our leases as either finance leases or operating leases. Leases that are economically similar to the purchase of assets are generally classified as finance leases; otherwise, the leases are classified as operating leases. Lease cost for our operating leases is recognized on a straight-line basis over the lease term. Included in lease cost are any variable lease payments incurred in the period that are not included in the initial lease liability and lease payments incurred in the period for any leases with an initial term of 12 months or less.  

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22.  Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued a new standard ASU No. 2016-13, “Financial Instruments – Credit Losses” (Topic 326), and subsequently amended. The new standard is intended to replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. It will be effective for all smaller reporting entities for fiscal years and interim periods, beginning after December 15, 2022.  The adoption of this standard is not expected to have a material effect on financial statement presentation. 

In August 2018, FASB issued ASU 2018-13, “Fair Value Measurement: Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820), which changes the fair value measurement disclosure requirements of ASC 820. This ASU removes certain disclosure requirements regarding the amounts and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of transfers between the levels. This ASU also adds disclosure requirements regarding unrealized gains and losses included in Other Comprehensive Income for recurring Level 3 fair value measurements and the range and weighted average of unobservable inputs used in Level 3 fair value measurements. ASU 2018-13 is effective for all entities with fiscal years beginning after December 15, 2019, including interim periods therein. The adoption of this standard did not have a material effect on financial statement presentation. 

In August 2018, FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract , which provides guidance for the accounting treatment for the software arrangements used by companies. ASU 2018-15 is effective for all entities with fiscal years beginning after December 15, 2019, including interim periods therein. The adoption of this standard did not have a material effect on financial statement presentation. 

In December 2019, FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which clarifies for the accounting treatment for the accounting tax aspects relating, in part, to the intraperiod allocations and foreign subsidiaries. ASU 2019-12 is effective for all entities with fiscal years beginning after December 15, 2020. The adoption of this standard is not expected to have a material effect on financial statement presentation.

In January 2020, FASB issued ASU 2020-01, “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815), which, generally, provides guidance for investments in entities accounted for under the equity method of accounting . ASU 2020-01 is effective for all entities with fiscal years beginning after December 15, 2021, including interim periods therein.  We are currently evaluating the impact of adopting this guidance on our consolidated balance sheets, results of operations, and financial condition.

In August 2020, FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity; which, generally, provides guidance for accounting regarding derivatives relating to entities common stock and earnings per share. ASU 2020-06 is effective for all entities with fiscal years beginning after December 15, 2021, including interim periods therein. The adoption of this standard is not expected to have a material effect on financial statement presentation

NOTE 4 — INVENTORIES

Inventories consist of the following:

	September 30, 2020		December 31, 2019
Dental finished goods, net	$	1,705,519	$	1,306,763
Medical finished goods, net		169,549		213,861
Component parts and other materials		354,692		99,885
Total inventories	$	2,229,760	$	1,620,509

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On September 30, 2020, there is a reserve for slow moving medical finished goods of approximately $450,000 and damaged or slow moving dental finished goods of approximately $7,000. The reserve for the medical finished goods was primarily related to the delay in regulatory approval and commercialization of the intra-articular medical instrument. As of December 31, 2019, there is a reserve for slow moving medical finished goods of approximately $450,000 and damaged or slow moving dental finished goods of approximately $318,000. Approximately $311,000 of the dental finished inventory reserved at December 31, 2019 was destroyed during the nine months ended September 30, 2020.

NOTE 5 — ADVANCES ON CONTRACTS

The advances on contracts represent funding of future STA inventory purchases, epidural instruments, and epidural replacements parts. The balance of the advances as of September 30, 2020 and December 31, 2019 is approximately $723,000 and $710,000, respectively. The advance is classified as current based on the estimated annual usage of the underlying inventory.  

NOTE 6 – INVESTMENT IN AND TRANSACTIONS WITH EQUITY INVESTEES

Milestone China Ltd.

Ownership

In June 2014, Milestone Scientific invested $1 million in Milestone China Ltd. (“Milestone China”), by contributing dental instruments to Milestone China for a forty (40%) ownership interest. Milestone China owns approximately 75% of Milestone Beijing Medical Equipment Company, Ltd (“Milestone Beijing”). Milestone Beijing has primary responsibility for the sales, marketing, and distribution of the Company’s dental products in China. Milestone Scientific recorded their investment in Milestone China under the equity method of accounting. 

In first quarter 2020, Milestone China and certain marketing affiliates entered into a plan to merge (the Transaction) into an affiliated manufacturing company, Anhui Maishida Medical Technology, Co. Ltd. (Anhui). Anhui will be the surviving entity after the merger and will have complete responsibility for sales, marketing, and distribution for the Company’s dental products in China. However, as of the filing date of this Quarterly Report,  due to the COVID-19 Pandemic, the regulatory documentation for the planned merger has been placed in suspense since applicable government offices are still closed in China and Hong Kong. After completion of the Transaction, Milestone Scientific is expected to have an approximate 28.4% direct ownership in Anhui. Milestone China and certain marketing affiliates are expected to be dissolved upon completion of the merger and upon the required regulatory filings in China and Hong Kong.

Related Party Transactions 

Milestone China is Milestone Scientific’s exclusive distributor in China.  During 2017 and prior to the payment default during 2018, Milestone Scientific agreed to sell inventory to Milestone China and its agent. During 2018, Milestone Scientific entered into a payment arrangement with Milestone China to satisfy past due receivables from Milestone China and its agents which amounted to $2.8 million at the time of the payment arrangement. Milestone Scientific collected $950,000 under this arrangement, until Milestone China defaulted on the payment arrangements. Milestone Scientific halted shipments to Milestone China and the Company has adjusted the accounts receivable related party and the deferred revenue related party based on the expected payment realization and recorded a charge for  deferred cost associated with these transactions of $1.25 million during the fourth quarter of 2018.

For the three and nine months ended September 30, 2020 Milestone Scientific did not ship nor recognize any deferred revenue or net revenue for Milestone China and its agents. For the three and nine months ended September 30, 2019 Milestone Scientific did not ship nor recognize any deferred revenues, but did recognize revenue of zero, and $100,000 for Milestone China and its agents, respectively, that was previously deferred as a result of additional cash collected.

United System Agreement

In April of 2020, the Company entered into an agreement with United Systems, Inc., related party (see Note 13) regarding certain handpieces supplied to Milestone China in 2018, that were billed and shipped to Milestone China by United Systems, as well as STA instruments billed to United Systems and delivered to Milestone China, and not paid by Milestone China. United Systems sold their entire accounts receivable due from Milestone China for the above described handpieces and STA instruments for $370,260 to Milestone Scientific. Milestone Scientific paid United Systems the sale price as follows; $100,000 in cash paid in April 2020, $170,260 in shares of the Company’s  Common Stock (priced as of the close of business on April 23, 2020, $1.59 ) issued in June 2020, and $100,000 in cash paid in July 2020. The Company is entitled to the cash collections, if and when received, on the accounts receivable due to United Systems prior to this agreement up to approximately $1.4 million. 

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 The Company has recorded a charge to the unaudited condensed consolidated statement of operations for $370,260 during the nine months ended September 30, 2020.

Milestone Advanced Cosmetic Systems Inc. Transaction

In May 2020,  Milestone Scientific finalized an agreement for the purchase of Milestone China’s 50% interest in Advanced Cosmetic Systems Inc., for the forgiveness of $900,000 in accounts receivable owed by Milestone China to Milestone Scientific (and previously fully reserved for), resulting in a noncash transaction. Milestone China will have the option to repurchase the 50% interest in Advanced Cosmetic Systems within one year from the sale date for $900,000 in cash. As a result of the purchase Milestone Scientific will own 100% of Advanced Cosmetic Systems Inc. at the expiration of the option period.

Gross Profit Deferral

Due to timing differences of when the inventory sold to Milestone China is recognized and when Milestone China sells the acquired inventory to third parties, an elimination of the profit is required as of the balance sheet date. In accordance with ASC 323 Equity Method and Joint Ventures, Milestone Scientific has deferred 40% of the gross profit associated with recognized revenue from sales to Milestone China until that product is sold to third parties.

At September 30, 2020 and December 31, 2019, the deferred profit was $340,476, which is included in deferred profit, related party in the condensed consolidated balance sheets. For the three and nine months ended September 30, 2020 and 2019 Milestone Scientific recorded earnings on equity investment of $0 and $0 and $0 and $49,099 respectively, for product sold by Milestone China to third parties.

Equity Method Disclosures 

As a result of the COVID-19 Pandemic, as previously noted, Milestone China, Milestone Beijing and Anhui have not legally finalized the Transaction. Further, Milestone China and Milestone Beijing have not completed the financial accounting and reporting as of and for the three and nine months ended September 30, 2020. Consequently, the summarized financial information (unaudited) for Milestone China, Milestone Beijing are not available and therefore not included herein.

Milestone Scientific, in previous years, reduced its investment in Milestone China to zero and had accumulated losses over the investment balance of approximately $4.3 million as of December 31, 2019, which have been suspended. Milestone Scientific believes that its equity method portion of Milestone China’s expected losses for the three- and nine-months ending September 30, 2020 do not have a significant impact on and are not material to the consolidated financial statements of the Company.  

NOTE 7 — PATENTS    

September 30, 2020	Cost		Accumulated Amortization			Net
Patents-foundation intellectual property	$	1,377,863	$	(1,035,362	)	$	342,501
Total	$	1,377,863	$	(1,035,362	)	$	342,501

December 31, 2019	Cost		Accumulated Amortization			Net
Patents-foundation intellectual property	$	1,377,863	$	(995,603	)	$	382,260
Total	$	1,377,863	$	(995,603	)	$	382,260

Patents are amortized utilizing the straight-line method over estimated useful lives ranging from 3 to 20 years. Amortization expense was approximately $13,000 and $40,000 for the three and nine months ended September 30, 2020, respectively. Amortization expense was approximately $13,000 and $40,000 for the three and nine months ended September 30, 2019, respectively.

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NOTE 8 — NOTE PAYABLE   

On April 27, 2020, the Company, was granted a loan (the “Loan”) from Savoy Bank in the aggregate amount of approximately $276,000, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after seven weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period.
 
The Loan matures on April 27, 2022 and bears interest at a rate of 1.00% per annum, payable monthly commencing on November 26, 2020. The Note payable principal is due April 27, 2022 in a balloon payment if the loan is not forgiven. The Note may be prepaid by the Borrower at any time prior to maturity with no prepayment penalties. Funds from the Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations originating before February 15, 2020. The Company intends to use the entire Loan amount for qualifying expenses. While the Company currently believes that its use of the loan proceeds will meet the conditions for forgiveness of the loan, we cannot be assured that certain actions taken that could cause the Company to be ineligible for forgiveness of the loan, in whole or in part.

NOTE 9— STOCKHOLDERS’ EQUITY

PUBLIC OFFERING AND PRIVATE PLACEMENT

In February 2019, Milestone Scientific consummated a public offering and a private placement of Common Stock. The public offering generated gross proceeds of approximately $2.0 million for the issuance of 5,715,000 shares of common stock and warrants to purchase 1,428,750 shares of common stock. The warrants have a term of 5 years and are exercisable at $0.50 per share. Subsequent, to the public offering the underwriter exercised its over-allotment option and paid approximately $198,000 for 567,400 additional shares of common stock and 141,850 warrants.  

Also, in February 2019, the Company generated gross proceeds from a private placement of approximately $250,000 for 714,286 shares of common stock and warrants to purchase 178,571 shares of common stock from Bp4 S.p.A., a principal stockholder of Milestone Scientific that exercised its right to participate on a pro-rata basis on the recent public offering. Bp4’s CEO is a director of Milestone Scientific and at the time also Chief Executive Officer and Director of Wand Dental, a wholly owned subsidiary of Milestone Scientific. The warrants have a term of 5 years and are exercisable at $0.50 per share.

In the second quarter of 2020, the Company completed two public offerings. In April 2020, a Common Stock offering generating gross proceeds of approximately $5.1 million (5,420,000 common shares and 2,710,000 warrants). The combined price of the shares and warrants was $0.95 per share. The warrants are exercisable at a price of $1.20 per share and have an expiration of three (3) years from the issue date. In June 2020, the Company completed a second Common Stock offering generating gross proceeds of approximately $14.6 million (6,770,000 common shares and 3,749,000 warrants). The combined price of the shares and warrants was $2.15 per share. The warrants are exercisable at $2.60 and expire three (3) years from the issue date.

WARRANTS

The following table summarizes information about shares issuable under warrants outstanding as of September 30, 2020 :

	Warrant shares outstanding			Weighted Average exercise price		Weighted Average remaining life		Intrinsic value
Outstanding at January 1, 2020		1,074,171		$	0.50	$	4.10		956,012
Issued		6,459,000			2.01		3.00		-
Exercised		(1,133,975	)		0.87		-		-
Expired or cancelled		-			-		-		-
Outstanding and exercisable at September 30, 2020		6,399,196		$	1.95	$	2.73		880,449

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The following table summarizes information about shares issuable under warrants outstanding as of September 30, 2019

	Warrant shares outstanding			Weighted Average exercise price		Weighted Average remaining life		Intrinsic value
Outstanding at January 1, 2019		1,592,775		$	2.55	$	0.21		-
Issued		1,749,171			0.50		4.35		560,199
Exercised		(57,750	)		0.50		-		-
Expired or cancelled		-			-		-		-
Outstanding and exercisable at September 30, 2019		3,284,196		$	1.49	$	2.30		560,199

PREFERRED STOCK 

In May 2014, Milestone completed a private placement, which raised gross proceeds of $10 million, from the sale of $3 million of Milestone Scientific common stock (two million shares at $1.50 per share) and $7 million of our Series A Convertible Preferred Stock ("Preferred Stock") (7,000 shares at $1,000 per share).  These shares were convertible, at the option of the holder, into the number of shares of common stock equal to the stated value divided by $2.545, subject to anti-dilution adjustments, at any time before May 14, 2019.

These shares were mandatory convertible on May 14, 2019, into the number of shares of common stock equal to the stated value divided by $2.54 per share or $1.50 per share if the common stock does not trade at $3.15 for period of time, as defined by the agreements, both subject to anti-dilution adjustment.

On May 14, 2019, the mandatory conversion date, the Preferred Stock was converted at a rate of $1.17 per common share resulting in the issuance of 5,982,906 shares of common stock.

SHARES TO BE ISSUED

As of September 30, 2020 and 2019, there were 2,202,229 and 2,294,734 shares to be issued whose issuance has been deferred to the Chief Executive Officer, Chief Financial Officer, and other employees of Milestone Scientific, respectively.  

As of September 30, 2020, and 2019, there were 149,498 and 351,612 shares, respectively, to be issued to non-employees,  that will be issued for services rendered. The number of shares was fixed at the date of grant and were fully vested upon grant date.

The following table summarizes information about shares to be issued on September 30, 2020 and 2019, respectively.

	September 30, 2020			September 30, 2019
Shares-to-be-issued, outstanding January 1, 2020 and 2019, respectively		2,375,762			2,470,566
Granted in current period		363,956			1,392,460
Issued in current period		(387,991	)		(1,216,680	)
Shares-to be issued outstanding September 30, 2020 and 2019, respectively		2,351,727			2,646,346

OUTSTANDING EQUITY INSTRUMENTS IN EXCESS OF AUTHORIZED SHARES

As a result of the shares and warrants issued in the public and private offerings as well as other issuance of common stock during 2019, the Company did not have a sufficient number of authorized shares of common stock to cover the exercise and issue of all outstanding equity instruments. Therefore, as of September 30, 2019, the warrants issued in the public and private placement were classified as liabilities. As long as the warrants remained liability-classified, they were continued to be re-measured each reporting period, with any increase or decrease in value recorded as a loss or gain in the condensed consolidated statement of operations. 

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The initial fair value of the warrants was determined using a Black-Scholes option pricing model. The following assumptions were used to value the warrants at the reclassification date in 2019:

	2016 Warrants			2019 Warrants
Fair Value of Common Stock		$.36- $.83		$	0.33
Expected Term (years)	.25-.5 years			4.9 years
Volatility		86%-100%			83	%
Dividend yield		0	%		0	%
Exercise Price	$	2.55		$	0.50
Risk-free interest rate		1.88%-2.09%			2.30	%
Weighted average fair value of warrants granted	$	-		$	0.19
Number of shares underlying warrants granted		1,512,067			1,749,171

On the date of issuance and reclassification the fair value of the warrants was approximately $376,000.

As these warrants are liability-classified, they were revalued on September 30, 2019  using the following assumptions:

	2016 Warrants			2019 Warrants
Fair Value of Common Stock	$	0.83		$	0.08
Expected Term (years)	.02 years			4.4 years
Volatility		86	%		86	%
Dividend yield		0	%		0	%
Exercise Price	$	2.55		$	0.50
Risk-free interest rate		1.88	%		1.55	%
Weighted average fair value of warrants granted	$	-			61.00	%
Number of shares underlying warrants granted	$	1,512,067		$	1,691,421

For the three and nine months ended September 30, 2019 the loss on the liability classified warrants was approximately $680,542 and $674,792, respectively.

Additionally, approximately 2.6 million of shares to be issued  are classified as liabilities until there are sufficient number of authorized shares of common stock to cover the issuance of such shares. These shares were valued at the trading price of a share of the Company’s common stock ($0.83 as of September 30, 2019 ) and they will continue to be re-measured each reporting period, with any increase or decrease in value recorded as a loss or gain in the condensed consolidated statement of operations. For the three and nine months ended September 30, 2019 the loss on the liability classified shares to be issued was approximately $1.2 million, respectively.  

On December 17, 2019, the Company’s shareholders approved an increase to the authorized share limit to 75,000,000. On December 17, 2019, the Company reclassified all derivative liabilities related to the insufficient number of authorized shares to stockholders’ equity. As such, there were no derivative liabilities during the nine months ended September 30, 2020.  

NOTE 10 — INCOME TAXES

The utilization of Milestone Scientific's net operating losses may be subject to a substantial limitation due to the "change of ownership provisions" under Section 382 of the Internal Revenue Code and similar state provisions. Such limitation may result in the expiration of the net operating loss carry forwards before their utilization. Milestone Scientific has established a 100% valuation allowance for all its deferred tax assets due to uncertainty as to their future realization. 

NOTE 11 — SEGMENT AND GEOGRAPHIC DATA

We conduct our business through two reportable segments: Dental and Medical. These segments offer different products and services to different customer base. The Company provides general corporate services to its segments; however, these services are not considered when making operating decisions and assessing segment performance. These services are reported under “Corporate Services” below and these include costs associated with executive management, investor relations, patents, trademarks, licensing agreements, new instruments developments, financing activities and public company compliance.

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The following tables present information about our reportable and operating segments:

Net Sales:	Three months ended September 30,2020		Three months ended September 30, 2019		Nine months ended September 30,2020		Nine months ended September 30, 2019
Dental	$	1,240,110	$	1,884,321	$	3,209,370	$	6,042,580
Medical		6,000		15,500		15,800		31,000
Total net sales	$	1,246,110	$	1,899,821	$	3,225,170	$	6,073,580

Operating Income (Loss):	Three months ended September 30,2020			Three months ended September 30, 2019			Nine months ended September 30,2020			Nine months ended September 30, 2019
Dental	$	191,235		$	644,650		$	(32,624	)	$	1,766,087
Medical		(812,840	)		(554,843	)		(2,297,080	)		(1,711,184	)
Corporate		(855,123	)		(1,036,541	)		(3,928,521	)		(2,927,652	)
Total operating loss	$	(1,476,728	)	$	(946,734	)	$	(6,258,225	)	$	(2,872,749	)

Depreciation and Amortization	Three months ended September 30, 2020		Three months ended September 30, 2019		Nine months ended September 30, 2020		Nine months ended September 30, 2019
Dental	$	402	$	3,950	$	9,202	$	11,875
Medical		674		2,424		5,006		7,424
Corporate		15,429		19,044		60,653		57,620
Total depreciation and amortization	$	16,505	$	25,418	$	74,861	$	76,919

Income (loss) before taxes and equity in earnings of affiliates:	Three months ended September 30, 2020			Three months ended September 30, 2019			Nine months ended September 30, 2020			Nine months ended September 30, 2019
Dental	$	190,472		$	645,442		$	(35,376	)	$	1,765,475
Medical		(813,935	)		(556,969	)		(2,300,243	)		(1,713,362	)
Corporate		(853,834	)		(2,937,140	)		(3,931,333	)		(4,777,690	)
Total loss before taxes and equity in earnings of affiliate	$	(1,477,297	)	$	(2,848,667	)	$	(6,266,952	)	$	(4,725,577	)

Total Assets:	September 30, 2020		December 31, 2019
Dental	$	5,391,842	$	5,008,324
Medical		977,160		590,727
Corporate		13,576,619		957,238
Total assets	$	19,945,621	$	6,556,289

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The following table presents information about our operations by geographic area for three months ended September 30, 2020 and  2019.  Net sales by geographic area are based on the respective locations of our subsidiaries:

	Three months ended September 30, 2020						Three months ended September 30, 2019
	Dental		Medical		Total		Dental		Medical		Total
Domestic-US
Devices	$	34,657	$	-	$	34,657	$	199,926	$	-	$	199,926
Handpieces		356,566		-		356,566		679,621		-		679,621
Other		16,906		-		16,906		17,343		-		17,343
Total Domestic US	$	408,129	$	-	$	408,129	$	896,890	$	-	$	896,890
international
Devices	$	220,694	$	-	$	220,694	$	412,819	$	-	$	412,819
Handpieces		602,000		6,000		608,000		564,265		15,500		579,765
Other		9,287				9,287		10,347		-		10,347
Total International	$	831,981	$	6,000	$	837,981	$	987,431	$	15,500	$	1,002,931
International-China
Devices	$	-	$	-	$	-	$	-	$	-	$	-
Handpieces		-		-		-		-		-		-
Other		-		-		-		-				-
Total International	$	-	$	-	$	-	$	-	$	-	$	-
Total Product Sales	$	1,240,110	$	6,000	$	1,246,110	$	1,884,321	$	15,500	$	1,899,821

The following table presents information about our operations by geographic area for the nine months ended September 30, 2020 and 2019.  Net sales by geographic area are based on the respective locations of our subsidiaries:

	Nine months ended September 30, 2020						Nine months ended September 30, 2019
	Dental		Medical		Total		Dental		Medical		Total
Domestic-US & Canada
Devices	$	35,181	$	-	$	35,181	$	398,729	$	10,800	$	409,529
Handpieces		992,057		2,000		994,057		2,250,542		300		2,250,842
Other		37,895		-		37,895		61,408		-		61,408
Total Domestic US & Canada	$	1,065,133	$	2,000	$	1,067,133	$	2,710,679	$	11,100	$	2,721,779
International ROW
Devices	$	494,998	$	7,600	$	502,598	$	1,100,488	$	8,000	$	1,108,488
Handpieces		1,618,524		6,200		1,624,724		2,028,750		11,500		2,040,250
Other		30,715		-		30,715		102,663		400		103,063
Total International-ROW	$	2,144,237	$	13,800	$	2,158,037	$	3,231,901	$	19,900	$	3,251,801
International-China
Devices	$	-	$	-	$	-	$	-	$	-	$	-
Handpieces		-		-		-		100,000		-		100,000
Other		-		-		-				-		-
Total International	$	-	$	-	$	-	$	100,000	$	-	$	100,000
Total Product Sales	$	3,209,370	$	15,800	$	3,225,170	$	6,042,580	$	31,000	$	6,073,580

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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 September 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 three and nine months ended September 30, 2020, approximately 40% and 45% of the Company’s net product sales were from the Company’s exclusive domestic dental distributor, respectively. For the three and nine months ended September 30, 2019 net product sales were 54% and 51%, respectively, to the Company’s exclusive domestic dental distributor. Accounts receivable for two customers/distributors amounted to approximately $720,000 or 74%, or 60% and 14% of Milestone Scientific's gross accounts receivable as of September 30, 2020, one of which was the Company’s exclusive domestic dental distributor.     Accounts receivable for the Company’s exclusive domestic dental distributor amounted to approximately or 77%, of Milestone Scientific's gross accounts receivable as of December 31, 2019. The Company’s exclusive domestic dental distributor exclusivity for the domestic dental market is subject to annual purchase requirements and other requirements, as defined in the agreement.

The COVID-19 pandemic affected the Company’s operations in the second quarter and third 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.

NOTE 13 -- RELATED PARTY TRANSACTIONS

United Systems

Milestone Scientific has a manufacturing agreement with United Systems (whose controlling shareholder, Tom Cheng, is a significant stockholder of Milestone Scientific), 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 approximately $373,000 and $549,000 for the three months ended September 30, 2020 and 2019, respectively. Purchases from this manufacturer were approximately $1,200,000 and $1,100,000 for the nine months ended September 30, 2020 and 2019, respectively.  As September 30, 2020 and December 31, 2019, Milestone Scientific owed this manufacturer approximately $365,000 and $943,000, respectively, which is included in accounts payable, related party on the condensed consolidated balance sheets. In February 2019, Milestone Scientific Board of Directors granted United Systems 285,714 shares of stock at $0.35 or $100,000 for consulting services. These shares were issued July 2019.

On April 29, 2020, the Board of Directors approved the purchase of United Systems accounts receivable ($370,260) See Note 6. 

Milestone China

As of September 30, 2020, Milestone Scientific owned a 40% interest in Milestone China. See Note 6. 
 
Other

As of September 30, 2020, and December 31, 2019, Milestone Scientific had deferred compensation for the previous Chief Executive Officer of Wand Dental of approximately of and $308,000 and $380,000, respectively which is included accrued expenses related party.

In August 2016, K. Tucker Andersen, a significant stockholder of Milestone Scientific, entered into an agreement with Milestone Scientific to provide financial and business strategic services. Expenses recognized on this agreement were $25,000, and $75,000 for the three and nine months ended September 30, 2020, and 2019, respectively.

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 In January 2017, Milestone Scientific entered into a twelve-month agreement with Innovest S.p.A., a significant stockholder of Milestone Scientific, to provide consulting services. This agreement will renew for successive twelve-month terms unless terminated by Innovest S.p.A or Milestone Scientific. Expenses recognized on this agreement were $20,000 and $60,000 for both the three and nine months ended September 30, 2020, and 2019, respectively. This agreement was terminated September 30, 2020. 

The Director of Clinical Affairs’ royalty fee was approximately $61,000 and $92,000 for the three months ended September 30, 2020 and 2019, respectively. The Director of Clinical Affairs’ royalty fee was approximately $158,000 and $292,000 for the nine months ended September 30, 2020 and 2019, respectively. Additionally, Milestone Scientific expensed consulting fees to the Director of Clinical Affairs of $39,000 and $117,000 for the three and nine months ended September 30, 2020 and 2019, respectively. As of September 30, 2020 and December 31, 2019, Milestone Scientific owed the Director Clinical Affairs for royalties of approximately $80,000 and $390,000, respectively, which is included in accounts payable, related party and accrued expense, related party.

NOTE 14 — COMMITMENTS

(1)  Contract Manufacturing Agreement 

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. As of September 30, 2020, the purchase order commitment for dental instruments was $515,284 and advances of $350,311 are reported in inventory advances.
 

In August 2019, the company entered a new purchase commitment for the delivery of 100 Epidural instruments beginning in 2020. As of September 30, 2020, we have an open purchase order of $299,000 for 100 Epidural instruments and have advanced $161,000 against this purchase commitment. In July 2020, the company entered a new purchase commitment for the delivery of 110 cases of Epidural and Cathcheck disposable kits beginning in November 2020. As of September 30, 2020, we have an open purchase order of $30,395 for 110 cases of Epidural and Cathcheck disposable kits and have advanced $21,195 against this purchase commitment.

(2)  Leases

Operating Leases

In June 2015, the Company amended its original office lease for its headquarters in Livingston, New Jersey. Under the amendment, the Company leased an additional 774 square feet of rentable area of the building and extended the term of the lease through January 31, 2020 at a monthly cost of $12,522. The Company had an option to further extend the term of the lease, however, this option was not included in the determination of the lease’s right-of-use asset or lease liability. Per the terms of the lease agreement, the Company does not have a residual value guarantee. The Company will also be required to pay its proportionate share of certain operating costs and property taxes applicable to the leased premises in excess of new base year amounts. These costs are considered to be variable lease payments and are not included in the determination of the lease’s right-of-use asset or lease liability. 

In August 2019, the Company made the decision to not renew the its existing office lease for its corporate headquarters located in Livingston, New Jersey and instead signed a new seven (7) year lease in a new facility located in Roseland, New Jersey (the “Roseland Facility”), which commenced of January 8, 2020. Under the Roseland Facility lease, rent payments commence on April 1, 2020 and the monthly lease payments escalate annually on January 1 of each year, and range from $9,275 to $10,898 per month over the lease term. The Company is also required to pay a fixed electric charge equal to $2.00 per square foot which is  paid in equal monthly installments over the lease term or $11,130 annually. These fixed monthly payments have been included in the measurement of the operating lease liability and related operating lease right-of-use asset as the Company has elected the practical expedient to not separate lease and non-lease components for all leases. The Company is also required to pay its proportionate share of certain operating costs and property taxes applicable to the leased premises in excess of new base year amounts, which are accounted for as variable lease expenses. 

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As of September 30, 2020, total operating lease right-of-use assets were $655,870 and total operating lease liabilities were $645,341, of which $68,934 and $576,407 were classified as current and non-current, respectively. As of December 31, 2019, total operating right-of-use assets were $15,977 and total operating lease liabilities (current) were $15,977. During the nine months ended September 30, 2020, the Company also entered into a five-year lease for copiers which resulted in the recognition of property and equipment and total finance lease liabilities of $43,242. As of September 30, 2020, total finance lease liabilities were $38,527, of which $7,903 and $30,624 were classified as current and non-current, respectively.

Cash flow information related to the Company's right-of-use assets and related lease liabilities were as follows:

	Three months ended September 30,				Nine months ended September 30,
Lease cost	2020		2019		2020		2019
Cash paid for operating lease liabilities		30,820		39,555		78,904		118,664
Cash paid for finance lease liabilities		2,658		-		7,622		-
Right-of-use assets obtained in exchange for new operating lease liabilities (1)		-		-		663,009		-
Property and equipment obtained in exchange for new finance lease liabilities		-				43,242		-
(1) For the nine months ended September 30, 2019, the balance includes operating leases existing as of the adoption of ASC 842 on January 1, 2019.
Weighted-average remaining lease term - operating leases (years)		-		-		6.5		0.4
Weighted-average remaining lease term- finance leases (years)		-		-		4.3		-

(3)  Other Commitments

The technology underlying the Safety Wand® and CompuFlo®, and an improvement to the controls for CompuDent® were developed by the Director of Clinical Affairs and assigned to Milestone Scientific. Milestone Scientific purchased this technology pursuant to an agreement dated January 1, 2005. The Director of Clinical Affairs 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 until the expiration of the last patent covering these technologies. If products produced by third parties use any of these technologies (under license from us) then the Director of Clinical Affairs will receive the corresponding percentage of the consideration received by Milestone Scientific for such sale or license. See note  13 Other.

NOTE 15— SUBSEQUENT EVENTS

Since the quarter ended September 30, 2020, the Company issued 8,000 shares of common stock for warrants exercised at $1.20 for proceeds of $9,600.

The Company engaged Gian Domenico Trombetta, former CEO of Wand Dental Inc. as a consultant to Leonard Osser, Interim – Chief Executive Officer of Milestone Scientific for a period of twelve months (beginning October 1, 2020 and ending September 30, 2021). Gian Domenico Trombetta will provide historical International Business, Dental Segment information and business contacts to Mr. Osser and provide consulting services  for new International Business and Dental Segment concepts during this twelve month consulting period. Under this agreement, Mr. Trombetta is to receive $60,000 payable in Milestone Scientific shares.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussions of the financial condition and results of operations should be read in conjunction with the financial statements and the notes to those statements contained in this report and in connection with management's discussion and analysis and the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the Securities and Exchange Commission, or SEC on March 30, 2020. Certain statements in this discussion and elsewhere in this report constitute forward-looking statements, within the meaning of section 21E of the Exchange Act, that involve risks and uncertainties. The actual results may differ materially from those anticipated in these forward-looking statements. 

OVERVIEW

Our common stock was listed on the NYSE American on June 1, 2015 and trades under the symbol “MLSS”. We have developed a proprietary, computer-controlled anesthetic delivery instrument, using The Wand, a single use disposable handpiece. The instrument is marketed in dental sector under the trademark CompuDent®, and STA Single Tooth Anesthesia System and in medical sector under the trademark CompuMed. CompuDent is suitable for all dental procedures that require local anesthetic. CompuMed is suitable for many medical procedures regularly performed in plastic surgery, hair restoration surgery, podiatry, colorectal surgery, dermatology, orthopedics, and several other disciplines. The dental instruments are sold in the United States, U.S. territories, Canada, and in over 58 other countries abroad. In June 2017, the FDA approved our 510(k) applications for marketing clearance in the United States of our CompuFlo Epidural Computer Controlled Anesthesia System. We are in the process of meeting with medical facilities and device distributors within the United States and Europe. There have been five medical instruments sold in the United States in 2018 and limited amounts sold internationally as of the reporting date. Certain of our medical instruments have obtained European CE mark approval and can be marketed and sold in most European countries.

Milestone Scientific remains focused on advancing efforts to achieve the following four primary objectives:

● Establishing Milestone’s DPS Dynamic Pressure Sensing technology platform as the standard-of-care in painless and precise drug delivery, providing for the first time, objective visual and audible in-tissue pressure feedback, and continuing to expand platform applications;

● Following obtaining successful FDA clearance of our first medical devices, Milestone Scientific is transitioning from a research and development organization to a commercially focused medical device company; 

● Expanding our global footprint of our CompuFlo Epidural and CathCheck System by utilizing a Direct Field Sales Force and partnering with distribution companies worldwide; and

● Continuing the development of our proprietary cosmetic injection device for delivery of botulinum toxin (such as Botox® and Dysport®)

Wand/STA Dental Market

Since its market introduction in early 2007, the Wand/STA Instrument and prior C-CLAD devices have been used to deliver over 80 million safe, effective, and comfortable injections. The instrument has also been favorably evaluated in numerous peer-reviewed, published clinical studies and associated articles. Moreover, there appears to be a growing consensus among users that the STA Instrument is proving to be a valuable and beneficial instrument that is positively impacting the practice of dentistry worldwide.

Beginning January 1, 2016, Milestone Scientific entered into a non-exclusive distribution agreement with Henry Schein, Inc. (“Henry Schein”). In June 2016, that agreement was replaced with an exclusive distribution arrangement for our dental products for the United States and Canada with Henry Schein. Under this arrangement we have a semi-dedicated independent sales force visiting dentists.  The Company’s exclusive agreement is subject to annual purchase requirements and other requirements, as defined in the agreement.`                                                                                               

To date, Henry Schein has endeavored to accomplish the goals set forth in the exclusive distribution agreement for The Wand STA instrument and handpieces, including training of its exclusive products sale’s specialists. Specifically, up to 25 exclusive product sales specialists have now been fully trained as experts in the features, advantages and benefits of The Wand/STA instrument and handpieces and all are currently in the field selling the instrument.

Henry Schein increased the number of exclusive product specialist in 2019 and trained an additional customer service representative to support dentists across North America through its exclusive product sales customer call center. During the Covid-19 Pandemic, Henry Schein has lost one of its exclusive product specialist. Henry Schein is in the process of recruiting additional specialist in the fourth quarter of 2020.

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On the global front, we have granted exclusive marketing and distribution rights for the Wand/STA Instrument to select dental suppliers in various international regions in Asia, Africa, South America, and Europe. They include FM Produkty Dla Stomatologii in Poland and Unident AB in the Scandinavian countries of Denmark, Sweden, Norway, and Iceland.

In October 2012, the State Food and Drug Administration (CFDA) of the People’s Republic of China approved our Wand/STA Single Tooth Anesthesia System (STA System). In May 2014, the CFDA also approved the Wand STA handpieces for sale in China.

Medical Market

During 2016, Milestone Scientific filed for 510(k) marketing clearance with the U.S. Food and Drug Administration (FDA) for both intra-articular and epidural injections with the CompuFlo Epidural System.  In June 2017, the FDA approved the CompuFlo Epidural System for epidural injections. Milestone Scientific is in the process of meeting with medical device distributors within the United States and foreign markets. Milestone Scientific’s immediate focus is on marketing its epidural device throughout the United States and Europe.

In December 2016, we received notification from the FDA that based upon the 510(k)-application submitted for intra- articular injections, we did not adequately document that the device met the equivalency standard required for 510(k) clearances. Following consultation with the FDA Office of Device Evaluation, we filed a new 510(k) application for the device in June 2018. In August 2018, the FDA provided Milestone Scientific with a list of questions on the intra-articular 510(k) application filed in June 2018. Due to the delay in responding to the FDA questions Milestone Scientific will be required file a new 510(K) application.

In January 2019, the Company announced the results of a four hundred patient clinical trial by researchers from the University of Miami, University of Texas, and Northwestern University, and two prominent California-based pain clinics. Published-Ahead-of-Print in Anesthesia & Analgesia (the official Journal of the International Anesthesia Research Society), the randomized, controlled study compared the effectiveness of the CompuFlo Epidural System in labor and delivery and chronic pain management, where loss of resistance and fluoroscopy are the current standards of care. The CompuFlo Epidural System was found to be ninety-nine percent successful in objectively identifying the epidural space even in challenging patients with a higher body mass index.
 
In February 2019, the Company announced a new 120-patient clinical study published in Anesthesiology Research & Practice that verifies the CompuFlo Epidural System consistently differentiates false loss of resistance from true loss of resistance during epidural placement. In all cases where the CompuFlo Epidural System’s pressure measurements were used to objectively identify the epidural space, the block was performed successfully with no complications.
 
In February 2019, the Company announced Ospedale “Pugliese Ciaccio” di Catanzaro is the first hospital in Italy to use the CompuFlo Epidural System for all epidurals in labor and delivery. For a local hospital performing a limited number of epidurals, the CompuFlo Epidural System offers a real-time, objective tool for accurate epidural space identification to help reduce failure rates and accidental dural punctures that can require further treatment and interventions.
 
In April, 2019 the Company entered the medical education market with the introduction of the CompuFlo® Epidural Trainer (CompuFlo Trainer), an instructional instrument that uses pressure sensing technology to improve epidural placement success. The Company has signed an agreement to distribute the CompuFlo Trainer with American 3B Scientific, a leading supplier of didactic material for medical education.
 
In June 2019 the Company announced the results of two research abstracts featuring the CompuFlo Epidural device at Euroanesthesia 2019, Europe's largest annual event showcasing the latest knowledge in the field of anesthesia. The abstracts were presented during scientific poster sessions highlighting how CompuFlo's objective detection of tissue pressure makes challenging procedures with difficult patients more efficient and accelerates clinical competency for trainee. 

In October 2019, the Company announced the first international multicenter study to compare the incidence of accidental dural puncture using the CompuFlo Epidural System versus the continuous loss of resistance (LOR) technique. The study collected records between 2015 and 2019 of epidural administration on labor and delivery patients using the CompuFlo Epidural System from four institutions, one in the U.S., one in Chile, and two from Italy. Among the four sites, there were 812 patients who received epidural analgesia with CompuFlo, and none had accidental dural puncture regardless of the composition of the epidural performer types.

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The Company also announced that Professor Rovnat Babazade, MD, University of Texas Medical Branch at Galveston, Department of Anesthesiology, presented a poster at the ANESTHESIOLOGY® 2019 Annual Meeting in Orlando, Florida, entitled, "International Multicenter Study of Accidental Dural Puncture Rate; Comparison of the CompuFlo with Traditional Method''. ANESTHESIOLOGY 2019, hosted by the American Society of Anesthesiologists (ASA), unites more than 14,000 clinicians, thought leaders and professionals from around the world.
 
In November 2019, the Company and 3B Scientific, the world's leading supplier of didactic material for medical education, signed a global agreement expanding distribution of the CompuFlo Trainer. The expanded agreement allows 3B Scientific to capitalize on momentum from strong interest in the CompuFlo Trainer at its unveiling at Euroanesthesia 2019 and the Association of Women's Health, Obstetric and Neonatal Nurses meeting, and gives more anesthesia instructors the ultimate solution to accelerate the epidural procedure's learning curve and trainee success.

On April 21, 2020, Milestone Scientific, announced that it has validated and integrated the new CathCheck™ feature into the CompuFlo® Epidural System. Using CathCheck™, physicians and nurses can monitor the placement of a catheter to determine the presence or absence of a pulsatile waveform (heartbeat) providing new information that can be used to determine if the catheter is in place or has become dislodged from the epidural space. This can be performed within seconds by measuring the pulsatile waveform within the epidural space.
 

On October 13, 2020, Milestone Scientific announced a Group Purchasing Agreement with Premier a leading healthcare improvement company, utilizing an alliance of approximately 4,100 U.S. hospitals and 200,000 other providers to transform healthcare. The Agreement, which became effective November 1, 2020, allows Premier members, at their discretion, to take advantage of special pricing and terms pre-negotiated by Premier for the CompuFlo® Epidural System and CathCheck™. This agreement expires on February 28, 2022.

Covid-19 Pandemic

While the COVID-19 pandemic did not materially adversely affect the Company’s financial results and business operations in the Company’s first fiscal quarter ended March 31, 2020, economic and health conditions in the United States and across most of the globe have changed rapidly since the end of the first quarter. In the short-term, demand for the Company’s products decreased, notably in our dental and medical divisions. Such decrease demand may or may not continue and/or demand may or may not increase from historical levels depending on the duration and severity of the COVID-19 pandemic, the length of time it takes for normal economic and operating conditions to resume, additional governmental actions that may be taken and/or extensions of time for restrictions that have been imposed to date, and numerous other uncertainties. Such events may result in business and manufacturing disruption, inventory shortages, delivery delays, and reduced sales and operations, any of which could materially affect our business, financial condition, and results of operations.

The Company’s employees are being affected by the COVID-19 pandemic. The majority of our office and management personnel are working remotely. The health of the Company’s workforce is of primary concern and the Company may need to enact further precautionary measures to help minimize the risk of our employees being exposed to the coronavirus. Further, our management team is focused on mitigating the adverse effects of the COVID-19 pandemic, which has required and will continue to require a large investment of time and resources across the entire Company, thereby diverting their attention from other priorities that existed prior to the outbreak of the pandemic. If these conditions worsen, or last for an extended period of time, the Company’s ability to manage its business may be impaired, and operational risks, cybersecurity risks and other risks facing the Company prior to the pandemic may be elevated.

The COVID-19 pandemic is affecting the Company’s customers, suppliers, vendors, and other business partners, but the Company is not able to  predict the ultimate consequences that will result therefrom.

The COVID-19 pandemic did affect the Company’s operations in the second and third quarters and may continue to do so indefinitely thereafter. All of these factors may have far reaching impacts on the Company’s business, operations, and financial results and conditions, directly and indirectly, including without limitation impacts on the health of the Company’s management and employees, manufacturing, distribution, marketing and sales operations, customer and consumer behaviors, and on the overall economy. The scope and nature of these impacts, most of which are beyond the Company’s control, continue to evolve and the outcomes are uncertain.  

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Due to the above circumstances and as described generally in this Form 10-Q, the Company’s results of operations for the three- and nine month period ended September 30, 2020 are not necessarily indicative of the results to be expected for the full fiscal year.

The following table shows a breakdown of Milestone Scientific’s product sales (net), domestically and internationally, by business segment product category: 

	Three months ended September 30,				Nine months ended September 30
	2020		2019		2020		2019
Domestic-US
Devices	$	34,657	$	199,926	$	35,181	$	409,529
Handpieces		356,566		679,621		994,057		2,250,842
Other		16,906		17,343		37,895		61,408
Total Domestic US	$	408,129	$	896,890	$	1,067,133	$	2,721,779
International ROW
Devices	$	220,694	$	412,819	$	502,598	$	1,108,488
Handpieces		608,000		579,765		1,624,724		2,040,250
Other		9,287		10,347		30,715		103,063
Total International-ROW	$	837,981	$	1,002,931	$	2,158,037	$	3,251,801
International-China
Devices	$	-	$	-	$	-	$	-
Handpieces		-		-		-		100,000
Other		-		-		-		-
Total International	$	-	$	-	$	-	$	100,000
Total Product Sales	$	1,246,110	$	1,899,821	$	3,225,170	$	6,073,580

 Current Product Platform

See Note 1 Organization and Business.

Results of Operations

The following table sets forth the consolidated results of operations for the three months ended September 30, 2020 and 2019, respectively. The trends suggested by this table may not be indicative of future operating results:   

	Three months ended September 30,
	2020			2019
Operating results:
Product sales, net	$	1,246,110		$	1,899,821
Cost of products sold		409,621			523,672
Gross profit		836,489			1,376,149
Operating expenses:
Selling, general and administrative expenses		2,291,779			2,314,943
Research and development expenses		21,438			7,940
Loss from operations		(1,476,728	)		(946,734	)
Other income, and loss on earning net		(25,286	)		(1,903,183	)
Net loss		(1,502,014	)		(2,849,917	)
Net loss attributable to noncontrolling interests		11,025			12,941
Net loss attributable to Milestone Scientific Inc.	$	(1,490,989	)	$	(2,836,976	)

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The following table sets forth the consolidated results of operations for the nine months ended September 30, 2020 and 2019, respectively. The trends suggested by this table may not be indicative of future operating results:

	Nine months ended September 30,
	2020			2019
Operating results:
Product sales, net	$	3,225,170		$	6,073,580
Cost of products sold		1,024,947			1,894,550
Gross profit		2,200,223			4,179,030
Operating expenses:
Selling, general and administrative expenses		8,221,359			6,941,964
Research and development expenses		237,089			109,815
Loss from operations		(6,258,225	)		(2,872,749	)
Other income, and loss on earning net		(34,944	)		(1,823,606	)
Net loss		(6,293,169	)		(4,696,355	)
Net loss attributable to noncontrolling interests		35,501			35,343
Net loss attributable to Milestone Scientific Inc.	$	(6,257,668	)	$	(4,661,012	)

Cash flow:	September 30, 2020			September 30, 2019
Net cash used in operating activities	$	(6,346,160	)	$	(1,275,686	)
Net cash used in investing activities	$	(21,438	)	$	(9,916	)
Net cash provided by financing activities	$	19,300,229		$	2,253,422

Three months ended September 30, 2020 compared three months ended September 30, 2020  

Net sales for 2020 and 2019 were as follows:

	2020		2019		Increase Decrease			%
Dental	$	1,240,110	$	1,884,321	$	(644,211	)		-34.19	%
Medical		6,000		15,500		(9,500	)		-61.29	%
Total sales, net	$	1,246,110	$	1,899,821	$	(653,711	)		-34.41	%

Consolidated revenue for the three months ended, September 30, 2020 and 2019 were approximately $1.2 million  and $1.9 million, respectively. Dental revenue for the three months ended September 30, 2020 and 2019 were approximately $1.2 and $1.9 million, respectively. Dental revenues decreased by approximately $644,000 which is related to COVID-19 pandemic affecting the Company’s customers, suppliers, vendors, and other business partners. In the short-term, demand for the Company’s products decreased, notably in our dental divisions. Such decreased demand may or may not continue and/or demand may or may not increase from historical levels depending on the duration and severity of the COVID-19 pandemic, the length of time it takes for normal economic and operating conditions to resume, additional governmental actions that may be taken and/or extensions of time for restrictions that have been imposed to date, and numerous other uncertainties. 

As a result of the reduced hours and closings of dental offices throughout the country and the rest of the world due to the continuing spread of COVID-19, our revenue for the third quarter was materially and adversely affected. At this point in time, it is too early to determine an estimate of what the fourth quarter impact will be, or the effect COVID-19 may have on our fourth quarter revenue. In addition, it is too early to determine what the effect will be on the anticipated commercialization of our CompuFlo Epidural system as a medical device for the remainder of 2020, and the first quarter  of 2021.

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Gross Profit for 2020 and 2019 were as follows: 

	2020		2019		Increase Decrease			%
Dental	$	833,254	$	1,372,758	$	(539,504	)		-39.30	%
Medical		3,235		3,391		(156	)		-4.60	%
Total gross profit	$	836,489	$	1,376,149	$	(539,660	)		-39.22	%

Consolidated gross profit for the three months ended September 30, 2020 and 2019 approximately 67% and 72%, respectively. 

Selling, general and administrative expenses for 2020 and 2019 were as follows:

	2020		2019		Increase Decrease			%
Dental	$	643,794	$	728,108	$	(84,314	)		-11.58	%
Medical		792,866		550,294		242,572			44.08	%
Corporate		855,119		1,036,541		(181,422	)		-17.50	%
Total selling, general and administrative expenses	$	2,291,779	$	2,314,943	$	(23,164	)		-1.00	%

Consolidated selling, general and administrative expenses for the  three months ended September 30, 2020 and 2019, were approximately $2.2 million and $2.3 million, respectively. The decrease of approximately $16,000 is categorized in several areas. Employee salaries, and benefits expenses increased approximately $154,000 during the three months ended September 30, 2020, as the Company hired additional employees to work on the commercialization of the CompuFlo® Epidural System. During the three months ended September 30, 2020 D&O insurance increased approximately $54,000 due to the increase of premiums. Due to Covid-19 Pandemic, the Company's travel expenses, trade shows, professional fees, quality control, and general expenses decreased approximately $275,000 while marketing and consulting expense increased approximately $43,000 for three months ended September 30 ,2020.

Research and Development for 2020 and 2019 were as follows: 

	2020		2019		Increase Decrease		%
Dental	$	-	$	-	$	-		0.00	%
Medical		21,438		7,940		13,498		170.00	%
Corporate		-		-		-		0.00	%
Total research and development	$	21,438	$	7,940	$	13,498		170.00	%

Consolidated research and development expenses for the three months ended, 2020 and 2019, were approximately $21,000 and $7,900, respectively. The increase is associated with the Company developing software upgrades and enhancement for the CompuFlo® Epidural System and handpieces. 

Profit (Loss) from Operations for 2020 and 2019 were as follows: 

	2020				2019		Increase Decrease			%
Dental
Medical	$	191,235		$	644,650		$	(453,415	)		-70.34	%
Corporate		(812,840	)		(554,843	)		(257,997	)		46.50	%
Total loss from operations		(855,123	)		(1,036,541	)		181,418			-17.50	%
	$	(1,476,728	)	$	(946,734	)	$	(529,994	)		55.98	%

The loss from operations was approximately $1.5 million and $1 million  for the three months ending September 30, 2020 and 2019, respectively. The increase is the result of decreased dental revenue, due to reduced hours and closings of dental and medical offices throughout the country and the rest of the world due to the continuing spread of COVID-19. We anticipate that our revenue for the fourth quarter, and possibly the first quarter of  2021, will be materially and adversely affected.

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Nine months ended September 30, 2020 compared to nine months ended September 30, 2019

Net sales for 2020 and 2019 were as follows:

	2020		2019		Increase Decrease			%
Dental	$	3,209,370	$	6,042,580	$	(2,833,210	)		-46.89	%
Medical		15,800		31,000		(15,200	)		-49.03	%
Total sales, net	$	3,225,170	$	6,073,580	$	(2,848,410	)		-46.90	%

Consolidated revenue for the nine months ended September 30, 2020 and 2019 were approximately $3.2 million and $6.1 million, respectively. Dental revenue for the nine months ended September 30, 2020 and 2019 were approximately $3.2 million and $6.0 million, respectively. Dental revenues decreased by approximately $2.8 million, which is mostly related to COVID-19 pandemic affecting the Company’s customers and other business partners. In the short-term, demand for the Company’s products has decreased, notably in our dental and medical divisions. Such decreased demand may or may not continue and/or demand may increase from historical levels depending on the duration and severity of the COVID-19 pandemic, the length of time it takes for normal economic and operating conditions to resume, additional governmental actions that may be taken and/or extensions of time for restrictions that have been imposed to date, and numerous other uncertainties. Such events may result in business and manufacturing disruption, inventory shortages, delivery delays, and reduced sales and operations, any of which could materially affect our business, financial condition, and results of operations.  

As a result of the reduced hours and closings of dental offices throughout the country and the rest of the world due to the continuing spread of COVID-19, our revenue for the third quarter was materially and adversely affected. At this point in time, it is too early to determine an estimate of what the fourth quarter impact will be, or the effect COVID-19 may have on our first quarter  of  2021. In addition, it is too early to determine what the effect will be on the anticipated commercialization of our CompuFlo Epidural system as a medical device in the fourth quarter of 2020 and the first quarter 2021. 

Gross Profit for 2020 and 2019 were as follows:

	2020		2019		Increase Decrease			%
Dental	$	2,191,934	$	4,168,927	$	(1,976,993	)		-47.42	%
Medical		8,289		10,103		(1,814	)		-17.96	%
Total gross profit	$	2,200,223	$	4,179,030	$	(1,978,807	)		-47.35	%

 Consolidated gross profit for the nine months ended September 30, 2020 and 2019 approximately 68% and 69%, respectively. 

Selling, general and administrative expenses for 2020 and 2019 were as follows:

	2020		2019		Increase Decrease			%
Dental	$	2,226,303	$	2,402,840	$	(176,537	)		-7.35	%
Medical		2,066,535		1,611,472		455,063			28.24	%
Corporate		3,928,521		2,927,652		1,000,869			34.19	%
Total selling, general and administrative expenses	$	8,221,359	$	6,941,964	$	1,279,395			18.43	%

Consolidated selling, general and administrative expenses for the nine months ended September 30, 2020 and 2019, were approximately $8.2 million and 6.9 million, respectively. The increase of approximately $1.3 million is categorized in several areas. Employee salaries, and benefits expenses increased approximately $1 million during the nine months ended September 30, 2020, the Company hired additional employees to work on the commercialization of the CompuFlo® Epidural System and recorded additional bonuses in 2020. During the nine months ended September 30, 2020 D&O insurance increase approximately $117,000 due to the increase of premiums.  The company  expenses approximately $370,000 of bad debt related to a settlement with United Systems, See Note  6. Due to Covid-19 Pandemic, the Company's travel expenses, trade shows and general expenses decreased approximately $424,000. Office expense increased approximately $143,000 associated with the relocation of the Company 's office and other related costs. 

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Research and Development for 2020 and 2019 were as follows:

	2020		2019		Increase Decrease		%
Dental	$	-	$	-	$	-		0.00	%
Medical		237,089		109,815		127,274		115.90	%
Corporate		-		-		-		0.00	%
Total research and development	$	237,089	$	109,815	$	127,274		115.90	%

Consolidated research and development expenses for the nine months ended, September 30, 2020 and 2019, were approximately $237,000 and $109,000, respectively. The increase is associated with the Company developing software upgrades and enhancement for the CompuFlo® Epidural System and disposables.   

Profit (Loss) from Operations for 2020 and 2019 were as follows: 

	2020			2019			Increase Decrease			%
Dental
Medical	$	(32,624	)	$	1,766,087		$	(1,798,711	)		-101.85	%
Corporate		(2,297,080	)		(1,711,184	)		(585,896	)		34.24	%
Total loss from operations		(3,928,521	)		(2,927,652	)		(1,000,869	)		34.19	%
	$	(6,258,225	)	$	(2,872,749	)	$	(3,385,476	)		117.85	%

The loss from operations was approximately $6.3 million and $2.9 million for the nine months ending September 30, 2020 and 2019, respectively an increase of approximately $3.4 million. This increase is the result of a decrease in revenues due to the reduced hours and closings of dental and medical  offices throughout the country and the rest of the world due to the continuing spread of COVID-19. We anticipate that our revenue for the fourth quarter, and possibly the first quarter of 2021, will be materially and adversely affected. 

Liquidity and Capital Resources

On September 30, 2020, Milestone Scientific had cash and cash equivalents of approximately $14.4 million and working capital of approximately $15.4 million versus working capital of $1.2 million on December 31, 2019. For the nine months ended September 30, 2020, we had negative cash flows from operating activities of approximately $6.3 million compared to $1.3 million for the nine months ended September 30, 2019.

In the second quarter of 2020 the Company completed two capital raises. In April 2020, the Company completed a Common Stock Offering generating gross proceeds of approximately $5.1 million (5,420,000 common shares and 2,710,000 warrants). The combined price of the shares and warrants was $0.95 per share. The warrants are exercisable at a price of $1.20 per share and have an expiration of three years from the issue date. In June 2020, the Company completed a second Common Stock Offering generating gross proceeds of approximately $14.6 million (6,770,000 common shares and 3,749,000 warrants). The combined price of shares and warrants of was $2.15 per share. The warrants are exercisable at a of $2.60 and expire three  years from the issue date. See Note 9. With the combination of these two Common Stock Offerings, the Company has sufficient liquidity to support operations for at least a year after the condensed consolidated financial statements issue date.

Milestone Scientific is actively pursuing the generation of positive cash flows from operating activities through an increase in revenue from its dental business worldwide, the generation of revenue from its medical devices and disposables business in the United States and worldwide, as well as considering other strategic plans or transactions. However, the COVID-19 pandemic is expected to have a continued adverse effect on the Company’s operations and cash flows for at least in the next two quarters and possibly longer depending on the length and severity in of the pandemic in important dental markets.

Now that the CompuFlo Epidural System has obtained FDA clearance in the United States (June 2017), the development costs were reduced in 2020, but the selling costs are expected to continue to increase. The FDA clearance has provided the Company with the opportunity to establish distribution in the U.S. The Company intends to restart the 510K application process for the intra-articular device , subject to available allocated internal resources.  

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Milestone Scientific is a “smaller reporting company” as defined by Regulation S-K and, as such, is not required to provide the information required by this item.

Item 4. Controls and Procedures

  
Milestone Scientific’s Interim Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the design and operation of Milestone Scientific’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based upon that evaluation, Milestone Scientific’s Interim Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures as of September 30, 2020 are effective to ensure that information required to be disclosed in the reports Milestone Scientific files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to Milestone Scientific's management, including the Interim Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There have been no changes in Milestone Scientific’s internal control over financial reporting that occurred during Milestone Scientific’s last fiscal quarter that have materially affected, or that are reasonably likely to materially affect, Milestone Scientific’s internal controls over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Milestone Scientific is not involved in any material litigation.

Item 1A. Risk Factors

The COVID-19 pandemic is adversely affecting the Company’s business currently. Additional factors could exacerbate such negative consequences and/or cause other materially adverse effects.

The COVID-19 pandemic did materially adversely affect the Company’s financial results and business operations in the Company’s third fiscal quarter ended September 30, 2020, while economic and health conditions in the United States and across most of the globe have continued to change rapidly since the end of the third quarter. In the short-term, demand for the Company’s dental products is showing an increase in sell through activity to dental offices. However the change in demand may or may not continue and/or demand may or may not increase from historical levels depending on the duration and severity of the COVID-19 pandemic, the length of time it takes for normal economic and operating conditions to resume, additional governmental actions that may be taken and/or extensions of time for restrictions that have been imposed to date, and numerous other uncertainties. Such events may result in business and manufacturing disruption, inventory shortages, delivery delays, and reduced sales and operations, any of which could materially affect our business, financial condition, and results of operations.

The ability of the Company’s employees to work may be significantly impacted by the coronavirus.

The Company’s employees are being affected by the COVID-19 pandemic. The majority of our office and management personnel are working remotely. The health of the Company’s workforce is of primary concern and the Company may need to enact further precautionary measures to help minimize the risk of our employees being exposed to the coronavirus. Further, our management team is focused on mitigating the adverse effects of the COVID-19 pandemic, which has required and will continue to require a large investment of time and resources across the entire Company, thereby diverting their attention from other priorities that existed prior to the outbreak of the pandemic. If these conditions worsen, or last for an extended period of time, the Company’s ability to manage its business may be impaired, and operational risks, cybersecurity risks and other risks facing the Company even prior to the pandemic may be elevated.

The COVID-19 pandemic is affecting the Company’s customers, suppliers, vendors, and other business partners, but the Company is not able to assess the full extent of the current impact nor predict the ultimate consequences that will result therefrom.  

34

The full effects of the COVID-19 pandemic are highly uncertain and cannot be predicted. 

The COVID-19 pandemic affected the Company’s operations in the third quarter and year to date 2020, and may continue to do so indefinitely thereafter. All of these factors may have far reaching impacts on the Company’s business, operations, and financial results and conditions, directly and indirectly, including without limitation impacts on the health of the Company’s management and employees, manufacturing, distribution, marketing and sales operations, customer and consumer behaviors, and on the overall economy. The scope and nature of these impacts, most of which are beyond the Company’s control, continue to evolve and the outcomes are uncertain.

Due to the above circumstances and as described generally in this Form 10-Q, the Company’s results of operations for the three month and nine-month period ended September 30, 2020 are not necessarily indicative of the results to be expected for the full fiscal year. Management cannot predict the full impact of the COVID-19 pandemic on the Company’s sales channels, supply chain, manufacturing, and distribution nor to economic conditions generally, including the effects on consumer spending. The ultimate extent of the effects of the COVID-19 pandemic on the Company is highly uncertain and will depend on future developments, and such effects could exist for an extended period of time even after the pandemic might end.

Item 2. Unregistered Sales of Equity Securities and use of proceeds

During the quarter ended September 30, 2020, the Company issued 112,140 shares of common stock in payment of $227,928 of consulting expenses incurred by the Company.   

 
These securities were issued in reliance upon the exemption from registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Act”). These securities may not be offered or sold in the United States absent registration under or exemption from the Act and any applicable state securities laws.

Item 3. Default upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosure

Not applicable.

Item 5. Other Information 

None

35

Item 6. Exhibits and Financial Statement Schedules

Exhibit No	Description
31.1	Rule 13a-14(a) Certification-Chief Executive Officer*
31.2	Rule 13a-14(a) Certification-Chief Financial Officer*
32.1	Section 1350 Certifications-Chief Executive Officer**
32.2	Section 1350 Certifications-Chief Financial Officer**
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*

* Filed herewith.

** Furnished herewith and not filed, in accordance with item 601(32) (ii) of Regulation S-K.

36

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MILESTONE SCIENTIFIC INC.
	/s/ Leonard Osser
	Leonard Osser
	Interim Chief Executive Officer
	(Principal Executive Officer)
	/s/ Joseph D’Agostino
	Joseph D’Agostino
	Chief Operating Officer
	Chief Financial Officer
	(Principal Financial and Accounting Officer)
Date: November 16, 2020

37

EX-31.1

Exhibit 31.1

Rule 13a-14(a)/15d-14(a) Certification

I, Leonard Osser, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Milestone Scientific Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, considering the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under the supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under the supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report the conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on the most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 16, 2020

/s/ Leonard Osser

Leonard Osser

Interim Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Rule 13a-14(a)/15d-14(a) Certification

I, Joseph D'Agostino, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Milestone Scientific Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, considering the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under the supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under the supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report the conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on the most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 16, 2020

/s/ Joseph D'Agostino

Joseph D'Agostino

Chief Financial Officer and Chief Operating Officer

(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Milestone Scientific Inc. (“Milestone”) on Form 10-Q for the period ending September 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Leonard Osser, Interim Chief Executive Officer of Milestone, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of Milestone.

Date November 16, 2020

/s/ Leonard Osser

Leonard Osser

Interim Chief Executive Officer

(Principal Executive Officer)

A signed original of this certification has been provided to Milestone and will be retained by Milestone and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Milestone Scientific Inc. (“Milestone”) on Form 10-Q for the period ending September 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph D’Agostino Chief Operating Officer and Chief Financial Officer of Milestone, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of Milestone.

Date November 16, 2020

/s/ Joseph D’Agostino

Joseph D’Agostino

Chief Operating Officer

Chief Financial Officer

(Principal Financial and Accounting Officer)

A signed original of this certification has been provided to Milestone and will be retained by Milestone and furnished to the Securities and Exchange Commission or its staff upon request. 

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2020	Nov. 16, 2020
Document Information [Line Items]
Entity Registrant Name	MILESTONE SCIENTIFIC INC.
Entity Central Index Key	0000855683
Trading Symbol	mlss
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding (in shares)		63,693,469
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Sep. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Amendment Flag	false
Title of 12(b) Security	Common Stock, par value $.001 per share

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 14,448,903	$ 1,516,272
Accounts receivable, net	962,983	1,710,665
Prepaid expenses and other current assets	527,059	519,063
Inventories, net	2,229,760	1,620,509
Advances on contracts	723,084	710,662
Total current assets	18,891,789	6,077,171
Furniture, fixtures and equipment, net	31,311	44,976
Patents, net	342,501	382,260
Right of use assets	655,870	15,977
Other assets	24,150	35,905
Total assets	19,945,621	6,556,289
Current liabilities:
Accounts payable	666,094	1,379,425
Accounts payable, related party	393,090	1,358,752
Accrued expenses and other payables	1,147,698	775,055
Accrued expenses, related party	593,625	1,057,958
Current portion of finance leases	7,903	3,904
Current operating lease right-of-use liabilities	68,934	12,072
Note payable	276,180
Deferred profit, related party	340,476	340,476
Total current liabilities	3,494,000	4,927,642
Finance lease liabilities, non-current	30,624
Operating lease right-of-use liabilities	576,407
Total liabilities	4,101,031	4,927,642
Commitments and contingencies
Stockholders’ equity
Common stock, par value $.001; authorized 75,000,000 shares; 63,605,119 shares issued and 63,571,786 shares outstanding as of September 30, 2020; 49,410,176 shares issued and 49,376,843 shares outstanding as of December 31, 2019;	63,605	49,410
Additional paid in capital	116,577,241	96,082,324
Accumulated deficit	(99,806,352)	(93,524,297)
Treasury stock, at cost, 33,333 shares	(911,516)	(911,516)
Total Milestone Scientific Inc. stockholders' equity	15,922,978	1,695,921
Noncontrolling interest	(78,388)	(67,274)
Total stockholders’ equity	15,844,590	1,628,647
Total liabilities and stockholders’ equity	$ 19,945,621	$ 6,556,289

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	75,000,000	75,000,000
Common stock, shares issued (in shares)	63,605,119	49,410,176
Common stock, shares outstanding (in shares)	63,571,786	49,376,843
Treasury stock, at cost, shares (in shares)	33,333	33,333

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Product sales, net	$ 1,246,110	$ 1,899,821	$ 3,225,170	$ 6,073,580
Cost of products sold	409,621	523,672	1,024,947	1,894,550
Gross profit	836,489	1,376,149	2,200,223	4,179,030
Selling, general and administrative expenses	2,291,779	2,314,943	8,221,359	6,941,964
Research and development expenses	21,438	7,940	237,089	109,815
Total operating expenses	2,313,217	2,322,883	8,458,448	7,051,779
Loss from operations	(1,476,728)	(946,734)	(6,258,225)	(2,872,749)
Interest expense	(569)	(2,449)	(8,727)	(6,067)
Change in fair value of derivative liability		(1,899,484)		(1,846,761)
Loss before provision for income taxes and net of equity investments	(1,477,297)	(2,848,667)	(6,266,952)	(4,725,577)
Provision for income taxes	(24,717)	(1,250)	(26,217)	(19,877)
Loss before equity in net earnings (losses) of equity investments	(1,502,014)	(2,849,917)	(6,293,169)	(4,745,454)
Earnings from China Joint Venture				49,099
Net loss	(1,502,014)	(2,849,917)	(6,293,169)	(4,696,355)
Net loss attributable to noncontrolling interests	11,025	12,941	35,501	35,343
Net loss attributable to Milestone Scientific Inc.	$ (1,490,989)	$ (2,836,976)	$ (6,257,668)	$ (4,661,012)
Net loss per share applicable to common stockholders—
Basic (in dollars per share)	$ (0.02)	$ (0.06)	$ (0.11)	$ (0.11)
Diluted (in dollars per share)	$ (0.02)	$ (0.06)	$ (0.11)	$ (0.11)
Weighted average shares outstanding and to be issued—
Basic (in shares)	65,817,132	47,721,732	56,478,151	43,311,984
Diluted (in shares)	65,817,132	47,721,732	56,478,151	43,311,984

XML

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Consultant [Member] Preferred Stock [Member]	Consultant [Member] Common Stock [Member]	Consultant [Member] Additional Paid-in Capital [Member]	Consultant [Member] Retained Earnings [Member]	Consultant [Member] Noncontrolling Interest [Member]	Consultant [Member] Treasury Stock [Member]	Consultant [Member]	Board of Directors [Member] Preferred Stock [Member]	Board of Directors [Member] Common Stock [Member]	Board of Directors [Member] Additional Paid-in Capital [Member]	Board of Directors [Member] Retained Earnings [Member]	Board of Directors [Member] Noncontrolling Interest [Member]	Board of Directors [Member] Treasury Stock [Member]	Board of Directors [Member]	Public Offering [Member] Preferred Stock [Member]	Public Offering [Member] Common Stock [Member]	Public Offering [Member] Additional Paid-in Capital [Member]	Public Offering [Member] Retained Earnings [Member]	Public Offering [Member] Noncontrolling Interest [Member]	Public Offering [Member] Treasury Stock [Member]	Public Offering [Member]	Private Placement [Member] Preferred Stock [Member]	Private Placement [Member] Common Stock [Member]	Private Placement [Member] Additional Paid-in Capital [Member]	Private Placement [Member] Retained Earnings [Member]	Private Placement [Member] Noncontrolling Interest [Member]	Private Placement [Member] Treasury Stock [Member]	Private Placement [Member]	April 6, 2020 Public Offering [Member] Preferred Stock [Member]	April 6, 2020 Public Offering [Member] Common Stock [Member]	April 6, 2020 Public Offering [Member] Additional Paid-in Capital [Member]	April 6, 2020 Public Offering [Member] Retained Earnings [Member]	April 6, 2020 Public Offering [Member] Noncontrolling Interest [Member]	April 6, 2020 Public Offering [Member] Treasury Stock [Member]	April 6, 2020 Public Offering [Member]	June 30, 2020 Public Offering [Member] Preferred Stock [Member]	June 30, 2020 Public Offering [Member] Common Stock [Member]	June 30, 2020 Public Offering [Member] Additional Paid-in Capital [Member]	June 30, 2020 Public Offering [Member] Retained Earnings [Member]	June 30, 2020 Public Offering [Member] Noncontrolling Interest [Member]	June 30, 2020 Public Offering [Member] Treasury Stock [Member]	June 30, 2020 Public Offering [Member]	The 2019 Warrants [Member] Preferred Stock [Member]	The 2019 Warrants [Member] Common Stock [Member]	The 2019 Warrants [Member] Additional Paid-in Capital [Member]	The 2019 Warrants [Member] Retained Earnings [Member]	The 2019 Warrants [Member] Noncontrolling Interest [Member]	The 2019 Warrants [Member] Treasury Stock [Member]	The 2019 Warrants [Member]	The 2016 Warrants [Member] Preferred Stock [Member]	The 2016 Warrants [Member] Common Stock [Member]	The 2016 Warrants [Member] Additional Paid-in Capital [Member]	The 2016 Warrants [Member] Retained Earnings [Member]	The 2016 Warrants [Member] Noncontrolling Interest [Member]	The 2016 Warrants [Member] Treasury Stock [Member]	The 2016 Warrants [Member]	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Noncontrolling Interest [Member]	Treasury Stock [Member]	Total
Balance (in shares) at Dec. 31, 2018																																																									7,000	36,329,600
Balance at Dec. 31, 2018																																																									$ 7	$ 36,330	$ 88,414,718	$ (85,999,929)	$ (11,402)	$ (911,516)	$ 1,528,208
Stock based compensation																																																											56,988				56,988
Common stock issued to employee for compensation (in shares)																																																										22,727
Common stock issued to employee for compensation																																																										$ 23	7,477				7,500
Common stock to be issued for payment of consulting services (in shares)		118,115
Common stock to be issued for payment of consulting services		$ 118	$ 39,882				$ 40,000
Common stock to be issued to employees for bonuses (in shares)																																																										175,715
Common stock to be issued to employees for bonuses																																																										$ 175	61,325				61,500
Net loss																																																												(782,752)	(10,443)		(793,195)
Common stock issued for payment of consulting services (in shares)									20,588
Common stock issued for payment of consulting services									$ 21	$ 6,979				$ 7,000
Common stock issued in offering (in shares)																6,282,400							714,286
Common stock issued in offering																$ 6,281	$ 1,968,265				$ 1,974,546		$ 714	$ 249,286				$ 250,000
Reclassification of warrants and Shares to be issued to derivative liability (Note 9)																																													$ (406,045)				$ (406,045)
Balance (in shares) at Mar. 31, 2019																																																									7,000	43,663,431
Balance at Mar. 31, 2019																																																									$ 7	$ 43,662	90,398,875	(86,782,681)	(21,845)	(911,516)	2,726,502
Balance (in shares) at Dec. 31, 2018																																																									7,000	36,329,600
Balance at Dec. 31, 2018																																																									$ 7	$ 36,330	88,414,718	(85,999,929)	(11,402)	(911,516)	1,528,208
Net loss																																																															(4,696,355)
Balance (in shares) at Sep. 30, 2019																																																										48,199,074
Balance at Sep. 30, 2019																																																										$ 48,199	90,166,259	(90,660,941)	(46,745)	(911,516)	(1,404,744)
Balance (in shares) at Mar. 31, 2019																																																									7,000	43,663,431
Balance at Mar. 31, 2019																																																									$ 7	$ 43,662	90,398,875	(86,782,681)	(21,845)	(911,516)	2,726,502
Stock based compensation																																																											44,712				44,712
Common stock issued to employee for compensation (in shares)																																																										41,667
Common stock issued to employee for compensation																																																										$ 42	14,958				15,000
Common stock to be issued for payment of consulting services		$ 265	139,735				140,000
Net loss																																																												(1,041,284)	(11,959)		(1,053,243)
Common stock issued for payment of consulting services (in shares)		265,140							82,442
Common stock issued for payment of consulting services									$ 82	29,918				30,000
Reclassification of warrants and Shares to be issued to derivative liability (Note 9)																																												$ (2,902)	(1,062,637)				(1,065,539)
Conversion of Preferred Shares to Common Stock (Mandatory) (in shares)																																																									(7,000)	5,982,906
Conversion of Preferred Shares to Common Stock (Mandatory)																																																									$ (7)	$ 5,983	(5,976)
Reclassification of warrants and Shares to be issued to derivative liability (Note 9) (in shares)																																												(2,903,366)
Balance (in shares) at Jun. 30, 2019																																																										47,132,220
Balance at Jun. 30, 2019																																																										$ 47,132	89,559,585	(87,823,965)	(33,804)	(911,516)	837,432
Stock based compensation																																																											45,147				45,147
Common stock issued to employee for compensation (in shares)																																																										18,072
Common stock issued to employee for compensation																																																										$ 18	14,982				15,000
Common stock to be issued for payment of consulting services (in shares)		202,325
Common stock to be issued for payment of consulting services		$ 202	113,298				113,500
Common stock to be issued to employees for bonuses (in shares)																																																										170,454
Common stock to be issued to employees for bonuses																																																										$ 170	149,830				150,000
Common stock issued for warrants (in shares)																																																										57,750
Common stock issued for warrants																																																										$ 58	28,817				28,875
Net loss																																																												(2,836,976)	(12,941)		(2,849,917)
Common stock issued for payment of consulting services (in shares)		316,824							44,408
Common stock issued for payment of consulting services		$ 317	122,683				123,000		$ 44	29,956				30,000
Reclassification of warrants and Shares to be issued to derivative liability (Note 9)																																												$ (435)	$ (308,065)				$ (308,500)		$ 693	$ 410,026				$ 410,719
Reclassification of warrants and Shares to be issued to derivative liability (Note 9) (in shares)																																												(435,260)							692,281
Balance (in shares) at Sep. 30, 2019																																																										48,199,074
Balance at Sep. 30, 2019																																																										$ 48,199	90,166,259	(90,660,941)	(46,745)	(911,516)	(1,404,744)
Balance (in shares) at Dec. 31, 2019																																																										49,410,176
Balance at Dec. 31, 2019																																																										$ 49,410	96,082,324	(93,524,297)	(67,274)	(911,516)	1,628,647
Stock based compensation																																																											30,715				30,715
Common stock issued to employee for compensation (in shares)																																																										22,633
Common stock issued to employee for compensation																																																										$ 23	14,989				15,012
Common stock to be issued for payment of consulting services (in shares)
Common stock to be issued for payment of consulting services			25,000				25,000
Common stock to be issued to employees for bonuses (in shares)
Common stock to be issued to employees for bonuses																																																											171,046				171,046
Common stock issued for warrants (in shares)																																																										460,725
Common stock issued for warrants																																																										$ 460	229,902				230,362
Net loss																																																												(1,600,215)	(12,738)		(1,612,953)
Balance (in shares) at Mar. 31, 2020																																																										49,893,534
Balance at Mar. 31, 2020																																																										$ 49,893	96,553,976	(95,124,512)	(80,012)	(911,516)	487,829
Balance (in shares) at Dec. 31, 2019																																																										49,410,176
Balance at Dec. 31, 2019																																																										$ 49,410	96,082,324	(93,524,297)	(67,274)	(911,516)	1,628,647
Net loss																																																															(6,293,169)
Balance (in shares) at Sep. 30, 2020																																																										63,605,119
Balance at Sep. 30, 2020																																																										$ 63,605	116,577,241	(99,806,352)	(78,388)	(911,516)	15,844,590
Balance (in shares) at Mar. 31, 2020																																																										49,893,534
Balance at Mar. 31, 2020																																																										$ 49,893	96,553,976	(95,124,512)	(80,012)	(911,516)	487,829
Stock based compensation																																																											23,946				23,946
Common stock issued to employee for compensation (in shares)																																																										11,450
Common stock issued to employee for compensation																																																										$ 11	14,989				15,000
Common stock to be issued to employees for bonuses (in shares)
Common stock to be issued to employees for bonuses																																																											462,504				462,504
Common stock issued for warrants (in shares)																																																										620,750
Common stock issued for warrants																																																										$ 621	718,029				718,650
Net loss																																																												(3,166,464)	(11,738)		(3,178,202)
Common stock issued for payment of consulting services (in shares)		278,581							39,233
Common stock issued for payment of consulting services		$ 279	381,520				381,799		$ 39	53,967				54,006
Common stock issued to employees for bonuses (in shares)																																																										202,617
Common stock issued to employees for bonuses																																																										$ 203	(203)
Common stock issued in offering (in shares)																														5,420,000							6,770,000
Common stock issued in offering																														$ 5,420	$ 4,621,022				$ 4,626,442		$ 6,770	$ 13,410,074				$ 13,416,844
Acquired controlling interest in Milestone Advanced Cosmetic Systems																																																												(24,387)	24,387
Balance (in shares) at Jun. 30, 2020																																																										63,236,165
Balance at Jun. 30, 2020																																																										$ 63,236	116,239,824	(98,315,363)	(67,363)	(911,516)	17,008,818
Stock based compensation																																																											18,392				18,392
Common stock issued to employee for compensation (in shares)																																																										7,692
Common stock issued to employee for compensation																																																										$ 8	14,992				15,000
Common stock to be issued to employees for bonuses (in shares)																																																										180,272
Common stock to be issued to employees for bonuses																																																										$ 180	9,422				9,602
Common stock issued for warrants (in shares)																																																										52,500
Common stock issued for warrants																																																										$ 52	36,699				36,751
Net loss																																																												(1,490,989)	(11,025)		(1,502,014)
Common stock issued for payment of consulting services (in shares)		112,140							16,350
Common stock issued for payment of consulting services		$ 113	$ 227,928				$ 228,041		$ 16	$ 29,984				$ 30,000
Balance (in shares) at Sep. 30, 2020																																																										63,605,119
Balance at Sep. 30, 2020																																																										$ 63,605	$ 116,577,241	$ (99,806,352)	$ (78,388)	$ (911,516)	$ 15,844,590

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net loss	$ (6,293,169)	$ (4,696,355)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense	35,103	37,159
Amortization of patents	39,759	39,760
Stock compensation	76,611	146,847
Employees paid in stock	768,463	315,425
Expense paid in stock	644,865	292,915
Non-cash operating lease expense	30,175
Earnings on China joint venture		(49,099)
Change in fair value of derivative liability		1,846,761
Changes in operating assets and liabilities:
Decrease in accounts receivable	747,682	739,195
Decrease in accounts receivable, related party		100,000
Decrease in other assets	11,755	(9,027)
(Increase) decrease in inventories	(609,251)	303,989
(Increase) decrease in advances on contracts	(12,422)	20,289
Decrease (Increase) in prepaid expenses and other current assets	(7,996)	(90,362)
(Decrease) in accounts payable	(713,331)	(465,670)
(Decrease) in accounts payable, related party	(965,662)	(109,989)
Decrease in deferred cost, related party		50,000
Increase (decrease) in accrued expenses	431,917	(50,428)
(Decrease) increase in accrued expenses, related party	(530,659)	402,905
(Decrease) in deferred revenue, related party		(100,000)
Net cash used in operating activities	(6,346,160)	(1,275,686)
Cash flows from investing activities:
Purchase of property and equipment	(21,438)	(9,916)
Net cash used in investing activities	(21,438)	(9,916)
Cash flows from financing activities:
Proceeds from exercise of warrants	985,763	28,875
Payments finance lease obligations	(4,998)
Net proceeds from note payable	276,180
Net proceeds from Public Placement Offering	18,043,284	1,974,547
Net proceeds from Private Placement Offering		250,000
Net cash provided by financing activities	19,300,229	2,253,422
Net increase in cash and cash equivalents	12,932,631	967,820
Cash and cash equivalents at beginning of period	1,516,272	743,429
Cash and cash equivalents at end of period	14,448,903	1,711,249
Supplemental non-cash disclosure of cash flow information:
Shares issued to board of directors		67,000
Shares issued to employees for compensation		37,500
Shares issued to consultants in lieu of cash payments		416,500
Shares issued to employee for bonuses		211,500
Credit from United Systems for defective handpieces		(151,562)
Initial recognition of operating lease-right of use assets	(706,071)	(166,292)
Initial recognition of operating lease right to used liabilities	$ 706,071	$ 166,292

XML

Note 1 - Organization and Business

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE

1

— ORGANIZATION AND BUSINESS

All references in this report to “Milestone Scientific, Inc.,” “us,” “our,” “we,” the “Company “or “Milestone” refer to Milestone Scientific Inc., and its consolidated subsidiaries, Wand Dental, Inc., Milestone Advanced Cosmetic Inc. and Milestone Medical Inc. and affiliate, Milestone Education LLC, unless the context otherwise indicates. Milestone Scientific is the owner of the following registered U.S. trademarks:

CompuDent

®;

CompuMed

®;

CompuFlo

®;

DPS Dynamic Pressure Sensing technology

®;

Milestone Scientific

®;

CathCheck

™,

the Milestone logo

®;

Safety Wand

®;

STA Single Tooth Anesthesia System

®; and

The Wand

®. 

Milestone Scientific was incorporated in the State of Delaware in

August 1989.

Milestone Scientific is a medical technology research and development company that patents, designs, develops and commercializes innovative diagnostic and therapeutic injection technologies and devices for medical, dental, cosmetic, and veterinary applications. Since our inception, we have engaged in pioneering proprietary, innovative, computer-controlled injection technologies, and solutions for the medical and dental markets. Milestone Scientific has developed a proprietary, computer-controlled anesthetic delivery device, using

The Wand®

, a single use disposable handpiece. The device is marketed in the dental market under the trademark

CompuDent®,

and

STA Single Tooth Anesthesia System®

and in the medical market under the trademark

CompuMed®. CompuDent®

is suitable, for all dental procedures that require local anesthetic.

CompuMed®

is suitable upon regulatory approval, as required, for many medical procedures regularly performed in Plastic Surgery, Hair Restoration Surgery, Podiatry, Colorectal Surgery, Dermatology, Orthopedics, and many other disciplines. The dental devices are sold in the United States, Canada and in

60

other countries. 

During

2016,

Milestone Scientific filed for

510

(k) marketing clearance with the U.S. Food and Drug Administration (FDA) for both intra-articular and epidural injections with the

CompuFlo

® Computer Controlled Anesthesia System.  In

June 2017,

the FDA approved the

CompuFlo

® Epidural Computer Controlled Anesthesia System for epidural injections. Milestone Scientific is in the process of meeting with medical device distributors within the United States and foreign markets. Milestone Scientific's immediate focus is on marketing its epidural device throughout the United States and Europe. To date there have been

eleven

 medical devices sold in the United States and limited amounts sold internationally, although certain medical devices have obtained CE mark approval and can be marketed and sold in most European countries.

In

December 2016,

the Company received notification from the FDA that based upon the

510

(k)-application submitted for intra-articular injections, we did

not

adequately document that the device met the equivalency standard required for

510

(k) clearances. The Company provided an additional data submission to the FDA in

April 2017,

in support of a resubmission

510

(k) application for the device. The

510

(k) original application filed with FDA lapsed in

January 2019.

Following consultation with the FDA Office of Device Evaluation, we intended to file a new

510

(k) application for the device during 

2020.

As of

September 

30,

2020,

the Company has suspended the pursuit of an intra-articular

510

(k) application due to the COVID-

19

Pandemic. The company will revisit this project in

2021.

On

April 21, 2020,

Milestone Scientific announced that it had validated and integrated the new CathCheck™ feature into the CompuFlo® Epidural System. Using CathCheck™, physicians and nurses can monitor the placement of a catheter to determine the presence or absence of a pulsatile waveform (heartbeat) providing new information that can be used to determine if the catheter is in place or has become dislodged from the epidural space.

On

October 13, 2020,

Milestone Medical announced a Group Purchasing Agreement with Premier, a leading healthcare improvement company, utilizing an alliance of approximately

4,100

U.S. hospitals and

200,000

other providers to transform healthcare. The Agreement, which was effective

November 1, 2020,

allows Premier members, at their discretion, to utilize  pricing and terms pre-negotiated by Premier for the CompuFlo® Epidural System and CathCheck™. The Agreement expires on

February 28, 2022.

XML

Note 2 - Liquidity and Uncertainties

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Substantial Doubt about Going Concern [Text Block]

NOTE

2

-  LIQUIDITY 

AND UNCERTAINTIES

     

The Company has evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within

one

year after the date that the consolidated financial statements are issued.

In the

second

quarter of

2020

the Company completed

two

capital raises. In

April

and

June

of

2020,

the Company completed Common Stock Offerings generating net proceeds of approximately

$4.6

 million and

$13.4

million, respectively (see Note

9

). As of

September 30, 2020,

cash on hand was approximately

$14.4

 million, an increase of

$13

million from

December 31, 2019.

With the combination of these

two

Common Stock Offerings, the Company has sufficient liquidity to support operations beyond a year after the condensed consolidated financial statements issue date.

The coronavirus (COVID-

19

) that was reported to have surfaced in Wuhan, China in

December 2019

and that has now spread to other countries throughout the world has  adversely impact our operations and those of our

third

-party partners.  As a result of the reduced hours and closings of dental offices throughout the country and the rest of the world due to the continuing spread of COVID-

19,

revenues for the

three

and the

nine

months ended

September 30, 2020

was adversely affected.

Although there has been  a slow pick up in dental instrument and disposable sell  through to dentists beginning in the

third

quarter, it is  too early to determine  what  the continuing effect COVID-

19

may

have on our

fourth

quarter revenue. In addition, it is uncertain as to  what the effect will be on the anticipated commercialization of our CompuFlo Epidural and CathCheck system as a medical device . The extent to which the coronavirus impacts our operations,  our

third

-party partners, the dental offices and hospital operations and demand  depends on future developments which are still highly uncertain. Such future developments could have a material adverse effect on our financial results and our ability to conduct business as expected.

XML

Note 3 - Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Significant Accounting Policies [Text Block]

NOTE

3

 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.

  Principles of Consolidation

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and include the accounts of Milestone Scientific and its wholly owned and majority owned subsidiaries, including, Wand Dental (wholly owned), Milestone Advanced Cosmetic (majority owned), Milestone Education (wholly owned) and Milestone Medical (majority owned). All significant, intra-entity transactions and balances have been eliminated in consolidation.

2.

Basis of Presentation

The unaudited condensed consolidated financial statements of Milestone Scientific have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information with the instructions for Form

10

-Q and Article

8

of Regulation S-

X.

Accordingly, they do

not

include all the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting of normal recurring entries) necessary to fairly present such interim results. Interim results are

not

necessarily indicative of the results of operations which

may

be expected for a full year or any subsequent period. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto for the year ended

December 31, 2019,

included in Milestone Scientific's Annual Report on Form

10

-K.  

3.

  Reclassifications

Certain reclassification has been made to the

2019

 financial statements to conform to the unaudited condensed consolidated

2020

 financial statement presentation. These reclassifications had

no

effect on net loss or cash flows as previously reported.

4.

  Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to the allowance for doubtful accounts, inventory valuation, and cash flow assumptions regarding evaluations for impairment of long-lived assets and going concern considerations, and valuation allowances on deferred tax assets. Actual results could differ from those estimates.

5.

  Revenue Recognition

The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To perform revenue recognition for customer arrangements the Company performs the following

five

steps: 

i.	identification of the promised goods or services in the contract;
ii.	determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract;
iii.	measurement of the transaction price, including the constraint on variable consideration;
iv.	allocation of the transaction price to the performance obligations based on estimated selling prices; and
v.	recognition of revenue when (or as) the Company satisfies each performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606.

The Company derives its revenues from the sale of its products, primarily dental instruments, handpieces, and other related products. The Company sells its products through a global distribution network and that includes both exclusive and non-exclusive distribution agreements with related and

third

parties.

Revenue from product sales is recognized upon transfer of control of a product to a customer, generally upon date of shipment. For certain arrangements where the shipping terms are FOB destination, revenue is recognized upon delivery. The Company has

no

obligation on product sales for any installation, set-up, or maintenance, these being the responsibility of the buyer. Milestone Scientific's only obligation after transfer of control, except for specific contracts and arrangements  that provide for  customer right to return provisions, is the normal commercial warranty against manufacturing defects if the alleged defective unit is returned within the warranty period. 

Sales Returns

The Company records allowances for product returns as a reduction of revenue at the time product sales are recorded. Several factors are considered in determining whether an allowance for product returns is required, including the customers' return rights and the Company's historical experience with returns and the amount of product in the distribution channel

not

consumed by end users and subject to return. The Company relies on historical return rates to estimate returns. In the future, if any of these factors and/or the history of product returns change, adjustments to the allowance for product returns

may

be required.

 Financing and Payment

Our payment terms differ by geography and customer, but payment is generally required within

90

days from the date of shipment or delivery.

Disaggregation of Revenue

We operate in

two

operating segments: dental and medical. Therefore, results of our operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting. See Note

11

 for revenues by geographical market, and product category for the 

three

and

nine

months ended

September 30, 2020

and

2019.

6.

  Variable Interest Entities

A variable interest entity ("VIE") is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the entity's economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. 

Because Milestone Scientific has a variable interest in Milestone China it considered the guidance in ASC

810,

“Consolidation” as it relates to determining whether Milestone China is a VIE and, if so, identifying the primary beneficiary. Milestone Scientific would be considered the primary beneficiary of the VIE if it has both of the following characteristics:

● Power Criterion: The power to direct the activities that most significantly impact the entity's economic performance; and

● Losses/Benefits Criterion: The obligation to absorb losses that could potentially be significant or the right to receive benefits that could potentially be significant to the VIE.

Milestone Scientific does

not

have the ability to control the activities that most significantly impact Milestone China's economics and, therefore, the power criterion has

not

been met. Management placed the most weight on the relationship and significance of activities of Milestone China to the CEO and a group of significant shareholders, including the Milestone China CEO, which have the power to direct the activities that most significantly impact the economic performance of Milestone China. Management has concluded that Milestone Scientific is

not

the primary beneficiary under ASC

810.

See Note

6.

7.

  Cash and Cash Equivalents

Milestone Scientific considers all highly liquid investments purchased with an original maturity of

three

months or less to be cash equivalents. The Company maintains its cash and cash equivalents in bank deposit and other interest-bearing accounts, the balances of which, at times,

may

exceed federally insured limits.

8.

  Accounts Receivable

Milestone Scientific sells a significant amount of its product on credit terms to its major distributors. Milestone Scientific estimates losses from the inability of its customers to make payments on amounts billed. Most credit sales are due within

90

days from invoicing. There have

not

been any significant credit losses incurred to date. As of

September 30, 2020,

and

December 31, 2019,

accounts receivable was recorded, net of allowance for doubtful accounts of

$10,000.

9.

  Inventories

Inventories principally consist of finished goods and component parts stated at the lower of cost (

first

-in,

first

-out method) or net realizable value. Inventory quantities on hand are reviewed on a quarterly basis and a provision for excess, slow moving, defective, and obsolete inventory is recorded if required based on past and expected future sales, potential technological obsolescence, and product expiration requirements. The valuation allowance creates a new cost basis for the inventory, and it is

not

subsequently marked up through a reduction in the valuation allowance based on any changes in the underlying facts and circumstances. When the valuation allowance is initially recorded, the increase to the allowance is recognized as an increase in cost of sales. The valuation allowance is only reduced if or when the underlying inventory is sold or destroyed, at which time cost of sales recognized would include the previous adjusted cost basis. 

10.

  Equity Method Investments

Investments in which Milestone Scientific can exercise significant influence, but do

not

control, are accounted for under the equity method of accounting and are included in the long-term assets on the Condensed Consolidated Balance Sheets. Under this method of accounting, Milestone Scientific's share of the net earnings or losses of the investee is presented below the income tax line on the  unaudited Condensed Consolidated Statements of Operations. Milestone Scientific evaluates its equity method investments whenever events or changes in circumstance indicate that the carrying amounts of such investments

may

be impaired. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period.

11.

  Furniture, Fixture and Equipment  

Equipment is recorded at cost, less accumulated depreciation. Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets, which range from

two

to

seven

years. The costs of maintenance and repairs are charged to operations as incurred. 

12.

  Intangible Assets – Patents and Developed Technology

Patents are recorded at cost to prepare and file the applicable documents with the US Patent Office, or internationally with the applicable governmental office in the respective country. The costs related to these patents are being amortized using the straight-line method over the estimated useful life of the patent. Patents and other developed technology acquired from another business entity will be amortized based on the estimated useful life of the patent. These patents and developed technology are recorded at the acquisition cost.         

13.

  Impairment of Long-Lived Assets

Long-lived assets with finite lives are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset

may

not

be recoverable. The Company's impairment review process is based upon an estimate of future undiscounted cash flow. Factors the Company considers that could trigger an impairment review include the following: 

● significant under performance relative to expected historical or projected future operating results,

● significant changes in the manner of our use of the acquired assets or the strategy for our overall business

● significant negative industry or economic trends; and

● significant technological changes, which would render the technology obsolete

Recoverability of assets that will continue to be used in the Company's operations is measured by comparing the carrying value to the future net undiscounted cash flows expected to be generated by the asset or asset group. Future undiscounted cash flows include estimates of future revenues, driven by market growth rates, and estimated future costs.

14.

Note Payable

On

April 27, 2020,

the Company, was granted a loan (the “Loan”) from Savoy Bank. in the aggregate amount of approximately 

$276,000,

pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted

March 27, 2020.

The Loan, which was in the form of a Note dated

April 27, 2020, 

matures on

April 27, 2022,

and bears interest at a rate of

1.00%

per annum, payable monthly commencing on

November 26, 2020.

The Note

may

be prepaid by the Borrower at any time prior to maturity with

no

prepayment penalties. Funds from the Loan

may

only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred before

February 15, 2020.

The Company intends to use the entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan

may

be forgiven if they are used for qualifying expenses as described in the CARES Act.

15.

  Research and Development

Research and development costs, which consist principally of new product development costs payable to

third

parties, are expense as incurred. Advance payments for the research are amortized to expense either as services are performed or over the relevant service period using the straight-line method.

16.

  Income Taxes

Milestone Scientific accounts for income taxes pursuant to the asset and liability method which requires deferred income tax assets and liabilities to be computed for temporary differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.       

On

September 30, 2020 

and

December 31, 2019,

we had

no

uncertain tax positions that required recognition in the condensed consolidated financial statements. Milestone Scientific's policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the condensed consolidated statements of operations.

No

interest and penalties are present for periods open. Tax returns for the

2016,

2017,

and

2018

 years are subject to audit by federal and state jurisdictions. 

17.

  Basic and diluted net loss per common share

Milestone Scientific presents “basic” earnings (loss) per common share applicable to common stockholders and, if applicable, “diluted” earnings (loss) per common share applicable to common stockholders pursuant to the provisions of ASC

260,

“Earnings per Share”. Basic earnings (loss) per common share is calculated by dividing net income or loss applicable to common stockholders by the weighted average number of common shares outstanding and to be issued during each period. The calculation of diluted earnings per common share is like that of basic earnings per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, such as those issuable upon the exercise of stock options and warrants were issued during the period.

Since Milestone Scientific had net losses in the

three

and 

nine

months ended

September 30, 2020

and

2019,

the assumed effects of the exercise of potentially dilutive outstanding stock options, and warrants, were

not

included in the calculation as their effect would have been anti-dilutive. Such outstanding options, and warrants totaled

7,477,171

and

5,004,415

on

September 30, 2020

and

2019,

respectively. 

18.

  Fair Value of Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market at the measurement date (exit price). We are required to classify fair value measurements in

one

of the following categories:

● Level 1 inputs which are defined as quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

● Level 2 inputs which are defined as inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly.

● Level 3 inputs are defined as unobservable inputs for the assets or liabilities.

Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of an input to the fair value measurement requires judgment and

may

affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. As of

September 30, 2020

the Company does

not

have any assets or liabilities that were measured at fair value on a recurring basis. The carrying amounts reported in the accompanying unaudited condensed consolidated financial statements for current assets and current liabilities approximate the fair value because of the immediate or short-term maturities of the financial instruments. 

19.

Derivative Liability

The Company does

not

use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks; however, the Company had certain financial instruments that qualified as derivatives and were classified as liabilities on the balance sheet during the year ended

December 31, 2019.

The Company evaluates all its financial instruments to determine if those instruments or any potential embedded components of those instruments qualify as derivatives that need to be separately accounted for in accordance with FASB ASC

815,

“Derivatives and Hedging”. Derivatives satisfying certain criteria are recorded at fair value at issuance and marked-to-market at each balance sheet date with the change in the fair value recorded as income or expense. In addition, upon the occurrence of an event that requires a derivative liability to be reclassified to equity, the derivative liability is revalued to fair value at that date. See Note

9,

Outstanding Equity Instruments in Excess of Authorized Shares.   

20.

  Stock-Based Compensation

Milestone Scientific accounts for stock-based compensation under ASC Topic

718,

"Compensation - Stock Compensation". ASC Topic

718

requires all share-based payments to employees, including grants of employee stock options, to be recognized in the Statements of Operations over the service period, as an operating expense, based on the grant-date fair values.

21.

Leases

At the inception of an arrangement, we determine whether an arrangement is, or contains, a lease. An arrangement is, or contains, a lease if the arrangement conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Leases with a term greater than

one

year are generally recognized on the balance sheet as right-of-use assets and current and non-current lease liabilities, as applicable. We have elected

not

to recognize on the balance sheet leases with terms of

12

months or less. We typically only include the initial lease term in our assessment of a lease arrangement. Options to extend a lease are

not

included in our assessment unless there is reasonable certainty that we will renew.

Finance and operating lease right-of-use assets represent the Company's right to use an underlying asset over the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease. These assets and obligations are recognized at the lease commencement date based on the present value of lease payments, net of incentives, over the lease term. The interest rate implicit in our leases is typically

not

readily determinable. As a result, we utilize our incremental borrowing rate, which reflects the fixed rate at which we could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.

We evaluate the classification of our leases as either finance leases or operating leases. Leases that are economically similar to the purchase of assets are generally classified as finance leases; otherwise, the leases are classified as operating leases. Lease cost for our operating leases is recognized on a straight-line basis over the lease term. Included in lease cost are any variable lease payments incurred in the period that are

not

included in the initial lease liability and lease payments incurred in the period for any leases with an initial term of

12

months or less.  

22.

  Recent Accounting Pronouncements

In

June 2016,

the Financial Accounting Standards Board (“FASB”) issued a new standard ASU

No.

2016

-

13,

“Financial Instruments – Credit Losses” (Topic

326

), and subsequently amended. The new standard is intended to replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. It will be effective for all smaller reporting entities for fiscal years and interim periods, beginning after

December 15, 2022. 

The adoption of this standard is

not

expected to have a material effect on financial statement presentation. 

In

August 2018,

FASB issued ASU

2018

-

13,

 “Fair Value Measurement: Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (Topic

820

), which changes the fair value measurement disclosure requirements of ASC

820.

This ASU removes certain disclosure requirements regarding the amounts and reasons for transfers between Level

1

and Level

2

of the fair value hierarchy and the policy for timing of transfers between the levels. This ASU also adds disclosure requirements regarding unrealized gains and losses included in Other Comprehensive Income for recurring Level

3

fair value measurements and the range and weighted average of unobservable inputs used in Level

3

fair value measurements. ASU

2018

-

13

 is effective for all entities with fiscal years beginning after

December 15, 2019,

including interim periods therein. The adoption of this standard did

not

have a material effect on financial statement presentation. 

In

August 2018,

FASB issued ASU

2018

-

15,

 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic

350

-

40

):Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract , which provides guidance for the accounting treatment for the software arrangements used by companies. ASU

2018

-

15

 is effective for all entities with fiscal years beginning after

December 15, 2019,

including interim periods therein. The adoption of this standard did

not

have a material effect on financial statement presentation. 

In

December 2019,

FASB issued ASU

2019

-

12,

 “Income Taxes (Topic

740

): Simplifying the Accounting for Income Taxes, which clarifies for the accounting treatment for the accounting tax aspects relating, in part, to the intraperiod allocations and foreign subsidiaries. ASU

2019

-

12

 is effective for all entities with fiscal years beginning after

December 15, 2020.

The adoption of this standard is

not

expected to have a material effect on financial statement presentation.

In

January 2020,

FASB issued ASU

2020

-

01,

 “Investments—Equity Securities (Topic

321

), Investments—Equity Method and Joint Ventures (Topic

323

), and Derivatives and Hedging (Topic

815

), which, generally, provides guidance for investments in entities accounted for under the equity method of accounting . ASU

2020

-

01

 is effective for all entities with fiscal years beginning after

December 15, 2021,

including interim periods therein.  We are currently evaluating the impact of adopting this guidance on our consolidated balance sheets, results of operations, and financial condition.

In

August 2020,

FASB issued ASU

2020

-

06,

 “Debt—Debt with Conversion and Other Options (Subtopic

470

-

20

) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic

815

-

40

): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity; which, generally, provides guidance for accounting regarding derivatives relating to entities common stock and earnings per share. ASU

2020

-

06

 is effective for all entities with fiscal years beginning after

December 15, 2021,

including interim periods therein. The adoption of this standard is

not

expected to have a material effect on financial statement presentation

XML

Note 4 - Inventories

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Inventory Disclosure [Text Block]

NOTE

4

 — INVENTORIES

Inventories consist of the following:

	September 30, 2020		December 31, 2019
Dental finished goods, net	$	1,705,519	$	1,306,763
Medical finished goods, net		169,549		213,861
Component parts and other materials		354,692		99,885
Total inventories	$	2,229,760	$	1,620,509

On

September 30, 2020, 

there is a reserve for slow moving medical finished goods of approximately

$450,000

and damaged or slow moving dental finished goods of approximately

$7,000.

The reserve for the medical finished goods was primarily related to the delay in regulatory approval and commercialization of the intra-articular medical instrument. As of

December 31, 2019,

there is a reserve for slow moving medical finished goods of approximately

$450,000

and damaged or slow moving dental finished goods of approximately

$318,000.

Approximately

$311,000

 of the dental finished inventory reserved at

December 31, 2019

was destroyed during the

nine

months ended

September 30, 2020.

XML

Note 5 - Advances on Contracts

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Advances to Contract Manufacturer [Text Block]

NOTE

5

 — ADVANCES ON CONTRACTS

The advances on contracts represent funding of future STA inventory purchases, epidural instruments, and epidural replacements parts. The balance of the advances as of

September 30, 2020

and

December 31, 2019

is approximately 

$723,000

and

$710,000,

respectively. The advance is classified as current based on the estimated annual usage of the underlying inventory.  

XML

Note 6 - Investment in and Transactions with Equity Investees

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

NOTE

6

 – INVESTMENT IN AND TRANSACTIONS WITH EQUITY INVESTEES

Milestone China Ltd.

Ownership

In

June 2014,

Milestone Scientific invested

$1

million in Milestone China Ltd. (“Milestone China”), by contributing dental instruments to Milestone China for a

forty

(

40%

) ownership interest. Milestone China owns approximately

75%

of Milestone Beijing Medical Equipment Company, Ltd (“Milestone Beijing”). Milestone Beijing has primary responsibility for the sales, marketing, and distribution of the Company's dental products in China. Milestone Scientific recorded their investment in Milestone China under the equity method of accounting. 

In

first

quarter

2020,

Milestone China and certain marketing affiliates entered into a plan to merge (the Transaction) into an affiliated manufacturing company, Anhui Maishida Medical Technology, Co. Ltd. (Anhui). Anhui will be the surviving entity after the merger and will have complete responsibility for sales, marketing, and distribution for the Company's dental products in China. However, as of the filing date of this Quarterly Report,  due to the COVID-

19

Pandemic, the regulatory documentation for the planned merger has been placed in suspense since applicable government offices are still closed in China and Hong Kong. After completion of the Transaction, Milestone Scientific is expected to have an approximate

28.4%

direct ownership in Anhui. Milestone China and certain marketing affiliates are expected to be dissolved upon completion of the merger and upon the required regulatory filings in China and Hong Kong.

Related Party Transactions 

Milestone China is Milestone Scientific's exclusive distributor in China.  During

2017

and prior to the payment default during 

2018,

Milestone Scientific agreed to sell inventory to Milestone China and its agent. During

2018,

Milestone Scientific entered into a payment arrangement with Milestone China to satisfy past due receivables from Milestone China and its agents which amounted to

$2.8

million at the time of the payment arrangement. Milestone Scientific collected

$950,000

under this arrangement, until Milestone China defaulted on the payment arrangements. Milestone Scientific halted shipments to Milestone China and the Company has adjusted the accounts receivable related party and the deferred revenue related party based on the expected payment realization and recorded a charge for  deferred cost associated with these transactions of

$1.25

million during the

fourth

quarter of

2018.

For the

three

and

nine

months ended

September 30, 2020

Milestone Scientific did

not

ship nor recognize any deferred revenue or net revenue for Milestone China and its agents. For the

three

and

nine

months ended

September 30, 2019 

Milestone Scientific did

not

ship nor recognize any deferred revenues, but did recognize revenue of

zero

, and

$100,000

for Milestone China and its agents, respectively, that was previously deferred as a result of additional cash collected.

United System Agreement

In

April

of

2020,

the Company entered into an agreement with United Systems, Inc., related party (see Note

13

) regarding certain handpieces supplied to Milestone China in

2018,

that were billed and shipped to Milestone China by United Systems, as well as STA instruments billed to United Systems and delivered to Milestone China, and

not

paid by Milestone China. United Systems sold their entire accounts receivable due from Milestone China for the above described handpieces and STA instruments for

$370,260

to Milestone Scientific. Milestone Scientific paid United Systems the sale price as follows;

$100,000

in cash paid in

April 2020,

$170,260

in shares of the Company's  Common Stock (priced as of the close of business on

April 23, 2020,

$1.59

) issued in

June 2020,

and

$100,000

in cash paid in

July 2020.

The Company is entitled to the cash collections, if and when received, on the accounts receivable due to United Systems prior to this agreement up to approximately

$1.4

million. 

 The Company has recorded a charge to the unaudited condensed consolidated statement of operations for

$370,260

during the

nine

months ended

September 30, 2020.

Milestone Advanced Cosmetic Systems Inc. Transaction

In

May 2020,  

Milestone Scientific finalized an agreement for the purchase of Milestone China's

50%

interest in Advanced Cosmetic Systems Inc., for the forgiveness of

$900,000

in accounts receivable owed by Milestone China to Milestone Scientific (and previously fully reserved for), resulting in a noncash transaction. Milestone China will have the option to repurchase the

50%

interest in Advanced Cosmetic Systems within

one

year from the sale date for

$900,000

in cash. As a result of the purchase Milestone Scientific will own

100%

of Advanced Cosmetic Systems Inc. at the expiration of the option period.

Gross Profit Deferral

Due to timing differences of when the inventory sold to Milestone China is recognized and when Milestone China sells the acquired inventory to

third

parties, an elimination of the profit is required as of the balance sheet date. In accordance with ASC

323

Equity Method and Joint Ventures, Milestone Scientific has deferred

40%

of the gross profit associated with recognized revenue from sales to Milestone China until that product is sold to

third

parties.

At

September 30, 2020

and

December 31, 2019,

the deferred profit was

$340,476

,

which is included in deferred profit, related party in the condensed consolidated balance sheets. For the

three

and

nine

months ended

September 30, 2020

and

2019

Milestone Scientific recorded earnings on equity investment of 

$0

and

$0

and

$0

and

$49,099

respectively, for product sold by Milestone China to

third

parties.

Equity Method Disclosures 

As a result of the COVID-

19

Pandemic, as previously noted, Milestone China, Milestone Beijing and Anhui have

not

legally finalized the Transaction. Further, Milestone China and Milestone Beijing have

not

completed the financial accounting and reporting as of and for the

three

and

nine

months ended 

September 30, 2020.

Consequently, the summarized financial information (unaudited) for Milestone China, Milestone Beijing are

not

available and therefore

not

included herein.

Milestone Scientific, in previous years, reduced its investment in Milestone China to

zero

and had accumulated losses over the investment balance of approximately

$4.3

million as of

December 31, 2019,

which have been suspended. Milestone Scientific believes that its equity method portion of Milestone China's expected losses for the

three

- and

nine

-months ending

September 30, 2020

do

not

have a significant impact on and are

not

material to the consolidated financial statements of the Company.  

XML

Note 7 - Patents

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE

7

 — PATENTS

    

September 30, 2020	Cost		Accumulated Amortization			Net
Patents-foundation intellectual property	$	1,377,863	$	(1,035,362	)	$	342,501
Total	$	1,377,863	$	(1,035,362	)	$	342,501

December 31, 2019	Cost		Accumulated Amortization			Net
Patents-foundation intellectual property	$	1,377,863	$	(995,603	)	$	382,260
Total	$	1,377,863	$	(995,603	)	$	382,260

Patents are amortized utilizing the straight-line method over estimated useful lives ranging from

3

to

20

years. Amortization expense was approximately

$13,000

 and

$40,000

for the

three

and

nine

months ended

September 30, 2020,

respectively. Amortization expense was approximately

$13,000

 and

$40,000

for the

three

and

nine

months ended

September 30, 2019,

respectively.

XML

Note 8 - Note Payable

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Effect of COVID-19 Pandemic [Text Block]

NOTE

8

 — NOTE PAYABLE 

  

On

April 27, 2020,

the Company, was granted a loan (the “Loan”) from Savoy Bank in the aggregate amount of approximately

$276,000,

pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted

March 27, 2020.

The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to

2.5

times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after

seven

weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the

eight

-week period.
 
The Loan matures on

April 27, 2022

and bears interest at a rate of

1.00%

per annum, payable monthly commencing on

November 26, 2020.

The Note payable principal is due

April 27, 2022

in a balloon payment if the loan is

not

forgiven. The Note

may

be prepaid by the Borrower at any time prior to maturity with

no

prepayment penalties. Funds from the Loan

may

only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations originating before

February 15, 2020.

The Company intends to use the entire Loan amount for qualifying expenses. While the Company currently believes that its use of the loan proceeds will meet the conditions for forgiveness of the loan, we cannot be assured that certain actions taken that could cause the Company to be ineligible for forgiveness of the loan, in whole or in part.

XML

Note 9 - Stockholders' Equity

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE

9—

STOCKHOLDERS' EQUITY

PUBLIC OFFERING AND PRIVATE PLACEMENT

In

February 2019,

Milestone Scientific consummated a public offering and a private placement of Common Stock. The public offering generated gross proceeds of approximately

$2.0

million for the issuance of

5,715,000

shares of common stock and warrants to purchase

1,428,750

shares of common stock. The warrants have a term of

5

years and are exercisable at

$0.50

per share. Subsequent, to the public offering the underwriter exercised its over-allotment option and paid approximately

$198,000

for

567,400

additional shares of common stock and

141,850

warrants.  

Also, in

February 2019,

the Company generated gross proceeds from a private placement of approximately

$250,000

for

714,286

shares of common stock and warrants to purchase

178,571

shares of common stock from

Bp4

S.p.A., a principal stockholder of Milestone Scientific that exercised its right to participate on a pro-rata basis on the recent public offering.

Bp4's

CEO is a director of Milestone Scientific and at the time also Chief Executive Officer and Director of Wand Dental, a wholly owned subsidiary of Milestone Scientific. The warrants have a term of

5

years and are exercisable at

$0.50

per share.

In the

second

quarter of

2020,

the Company completed

two

public offerings. In

April 2020,

a Common Stock offering generating gross proceeds of approximately

$5.1

 million (

5,420,000

common shares and

2,710,000

warrants). The combined price of the shares and warrants was

$0.95

per share. The warrants are exercisable at a price of

$1.20

per share and have an expiration of

three

(

3

) years from the issue date. In

June 2020,

the Company completed a

second

Common Stock offering generating gross proceeds of approximately

$14.6

million (

6,770,000

common shares and

3,749,000

warrants). The combined price of the shares and warrants was 

$2.15

per share. The warrants are exercisable at

$2.60

and expire

three

(

3

) years from the issue date.

WARRANTS

The following table summarizes information about shares issuable under warrants outstanding as of

September 30, 2020 :

	Warrant shares outstanding			Weighted Average exercise price		Weighted Average remaining life		Intrinsic value
Outstanding at January 1, 2020		1,074,171		$	0.50	$	4.10		956,012
Issued		6,459,000			2.01		3.00		-
Exercised		(1,133,975	)		0.87		-		-
Expired or cancelled		-			-		-		-
Outstanding and exercisable at September 30, 2020		6,399,196		$	1.95	$	2.73		880,449

The following table summarizes information about shares issuable under warrants outstanding as of 

September 30, 2019

	Warrant shares outstanding			Weighted Average exercise price		Weighted Average remaining life		Intrinsic value
Outstanding at January 1, 2019		1,592,775		$	2.55	$	0.21		-
Issued		1,749,171			0.50		4.35		560,199
Exercised		(57,750	)		0.50		-		-
Expired or cancelled		-			-		-		-
Outstanding and exercisable at September 30, 2019		3,284,196		$	1.49	$	2.30		560,199

PREFERRED STOCK

 

In

May 2014,

Milestone completed a private placement, which raised gross proceeds of

$10

million, from the sale of

$3

million of Milestone Scientific common stock (

two million

shares at

$1.50

per share) and

$7

million of our Series A Convertible Preferred Stock ("Preferred Stock") (

7,000

shares at

$1,000

per share).  These shares were convertible, at the option of the holder, into the number of shares of common stock equal to the stated value divided by

$2.545,

subject to anti-dilution adjustments, at any time before

May 14, 2019.

These shares were mandatory convertible on

May 14, 2019,

into the number of shares of common stock equal to the stated value divided by

$2.54

 per share or

$1.50

per share if the common stock does

not

trade at

$3.15

for period of time, as defined by the agreements, both subject to anti-dilution adjustment.

On

May 14, 2019,

the mandatory conversion date, the Preferred Stock was converted at a rate of

$1.17

per common share resulting in the issuance of

5,982,906

shares of common stock.

SHARES TO BE ISSUED

As of

September 30, 2020

and

2019,

there were

2,202,229

and

2,294,734

shares to be issued whose issuance has been deferred to the Chief Executive Officer, Chief Financial Officer, and other employees of Milestone Scientific, respectively.  

As of

September 30, 2020,

and

2019,

there were

149,498

and

351,612

shares, respectively, to be issued to non-employees,  that will be issued for services rendered. The number of shares was fixed at the date of grant and were fully vested upon grant date.

The following table summarizes information about shares to be issued on

September 30, 2020

and

2019,

respectively.

	September 30, 2020			September 30, 2019
Shares-to-be-issued, outstanding January 1, 2020 and 2019, respectively		2,375,762			2,470,566
Granted in current period		363,956			1,392,460
Issued in current period		(387,991	)		(1,216,680	)
Shares-to be issued outstanding September 30, 2020 and 2019, respectively		2,351,727			2,646,346

OUTSTANDING EQUITY INSTRUMENTS IN EXCESS OF AUTHORIZED SHARES

As a result of the shares and warrants issued in the public and private offerings as well as other issuance of common stock during

2019,

the Company did

not

have a sufficient number of authorized shares of common stock to cover the exercise and issue of all outstanding equity instruments. Therefore, as of

September 30, 2019,

the warrants issued in the public and private placement were classified as liabilities. As long as the warrants remained liability-classified, they were continued to be re-measured each reporting period, with any increase or decrease in value recorded as a loss or gain in the condensed consolidated statement of operations. 

The initial fair value of the warrants was determined using a Black-Scholes option pricing model. The following assumptions were used to value the warrants at the reclassification date in

2019:

	2016 Warrants			2019 Warrants
Fair Value of Common Stock		$.36- $.83		$	0.33
Expected Term (years)	.25-.5 years			4.9 years
Volatility		86% - 100%			83	%
Dividend yield		0	%		0	%
Exercise Price	$	2.55		$	0.50
Risk-free interest rate		1.88% - 2.09%			2.30	%
Weighted average fair value of warrants granted	$	-		$	0.19
Number of shares underlying warrants granted		1,512,067			1,749,171

On the date of issuance and reclassification the fair value of the warrants was approximately

$376,000.

As these warrants are liability-classified, they were revalued on

September 30, 2019  

using the following assumptions:

	2016 Warrants			2019 Warrants
Fair Value of Common Stock	$	0.83		$	0.08
Expected Term (years)	.02 years			4.4 years
Volatility		86	%		86	%
Dividend yield		0	%		0	%
Exercise Price	$	2.55		$	0.50
Risk-free interest rate		1.88	%		1.55	%
Weighted average fair value of warrants granted	$	-			61.00	%
Number of shares underlying warrants granted	$	1,512,067		$	1,691,421

For the

three

and

nine

months ended

September 30, 2019

the loss on the liability classified warrants was approximately

$680,542

and

$674,792,

respectively.

Additionally, approximately

2.6

million of shares to be issued  are classified as liabilities until there are sufficient number of authorized shares of common stock to cover the issuance of such shares. These shares were valued at the trading price of a share of the Company's common stock (

$0.83

as of

September 30, 2019 )

and they will continue to be re-measured each reporting period, with any increase or decrease in value recorded as a loss or gain in the condensed consolidated statement of operations. For the

three

and

nine

months ended

September 30, 2019

the loss on the liability classified shares to be issued was approximately

$1.2

million, respectively.  

On

December 17, 2019,

the Company's shareholders approved an increase to the authorized share limit to

75,000,000.

On

December 17, 2019,

the Company reclassified all derivative liabilities related to the insufficient number of authorized shares to stockholders' equity. As such, there were

no

derivative liabilities during the

nine

 months ended

September 30, 2020.  

XML

Note 10 - Income Taxes

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE

10

 — INCOME TAXES

The utilization of Milestone Scientific's net operating losses

may

be subject to a substantial limitation due to the "change of ownership provisions" under Section

382

of the Internal Revenue Code and similar state provisions. Such limitation

may

result in the expiration of the net operating loss carry forwards before their utilization. Milestone Scientific has established a

100%

valuation allowance for all its deferred tax assets due to uncertainty as to their future realization. 

XML

Note 11 - Segment and Geographic Data

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Product Sales and Significant Customers and Vendors Disclosure [Text Block]

NOTE 

11

 — SEGMENT AND GEOGRAPHIC DATA

We conduct our business through

two

reportable segments: Dental and Medical. These segments offer different products and services to different customer base. The Company provides general corporate services to its segments; however, these services are

not

considered when making operating decisions and assessing segment performance. These services are reported under “Corporate Services” below and these include costs associated with executive management, investor relations, patents, trademarks, licensing agreements, new instruments developments, financing activities and public company compliance.

The following tables present information about our reportable and operating segments:

Net Sales:	Three months ended September 30,2020		Three months ended September 30, 2019		Nine months ended September 30,2020		Nine months ended September 30, 2019
Dental	$	1,240,110	$	1,884,321	$	3,209,370	$	6,042,580
Medical		6,000		15,500		15,800		31,000
Total net sales	$	1,246,110	$	1,899,821	$	3,225,170	$	6,073,580

Operating Income (Loss):	Three months ended September 30,2020			Three months ended September 30, 2019			Nine months ended September 30,2020			Nine months ended September 30, 2019
Dental	$	191,235		$	644,650		$	(32,624	)	$	1,766,087
Medical		(812,840	)		(554,843	)		(2,297,080	)		(1,711,184	)
Corporate		(855,123	)		(1,036,541	)		(3,928,521	)		(2,927,652	)
Total operating loss	$	(1,476,728	)	$	(946,734	)	$	(6,258,225	)	$	(2,872,749	)

Depreciation and Amortization	Three months ended September 30, 2020		Three months ended September 30, 2019		Nine months ended September 30, 2020		Nine months ended September 30, 2019
Dental	$	402	$	3,950	$	9,202	$	11,875
Medical		674		2,424		5,006		7,424
Corporate		15,429		19,044		60,653		57,620
Total depreciation and amortization	$	16,505	$	25,418	$	74,861	$	76,919

Income (loss) before taxes and equity in earnings of affiliates:	Three months ended September 30, 2020			Three months ended September 30, 2019			Nine months ended September 30, 2020			Nine months ended September 30, 2019
Dental	$	190,472		$	645,442		$	(35,376	)	$	1,765,475
Medical		(813,935	)		(556,969	)		(2,300,243	)		(1,713,362	)
Corporate		(853,834	)		(2,937,140	)		(3,931,333	)		(4,777,690	)
Total loss before taxes and equity in earnings of affiliate	$	(1,477,297	)	$	(2,848,667	)	$	(6,266,952	)	$	(4,725,577	)

Total Assets:	September 30, 2020		December 31, 2019
Dental	$	5,391,842	$	5,008,324
Medical		977,160		590,727
Corporate		13,576,619		957,238
Total assets	$	19,945,621	$	6,556,289

The following table presents information about our operations by geographic area for

three

months ended

September 30, 2020

and 

2019.

  Net sales by geographic area are based on the respective locations of our subsidiaries:

	Three months ended September 30, 2020						Three months ended September 30, 2019
	Dental		Medical		Total		Dental		Medical		Total
Domestic-US
Devices	$	34,657	$	-	$	34,657	$	199,926	$	-	$	199,926
Handpieces		356,566		-		356,566		679,621		-		679,621
Other		16,906		-		16,906		17,343		-		17,343
Total Domestic US	$	408,129	$	-	$	408,129	$	896,890	$	-	$	896,890
international
Devices	$	220,694	$	-	$	220,694	$	412,819	$	-	$	412,819
Handpieces		602,000		6,000		608,000		564,265		15,500		579,765
Other		9,287				9,287		10,347		-		10,347
Total International	$	831,981	$	6,000	$	837,981	$	987,431	$	15,500	$	1,002,931
International-China
Devices	$	-	$	-	$	-	$	-	$	-	$	-
Handpieces		-		-		-		-		-		-
Other		-		-		-		-				-
Total International	$	-	$	-	$	-	$	-	$	-	$	-
Total Product Sales	$	1,240,110	$	6,000	$	1,246,110	$	1,884,321	$	15,500	$	1,899,821

The following table presents information about our operations by geographic area for the

nine

months ended

September 30, 2020

and

2019.

  Net sales by geographic area are based on the respective locations of our subsidiaries:

	Nine months ended September 30, 2020						Nine months ended September 30, 2019
	Dental		Medical		Total		Dental		Medical		Total
Domestic-US & Canada
Devices	$	35,181	$	-	$	35,181	$	398,729	$	10,800	$	409,529
Handpieces		992,057		2,000		994,057		2,250,542		300		2,250,842
Other		37,895		-		37,895		61,408		-		61,408
Total Domestic US & Canada	$	1,065,133	$	2,000	$	1,067,133	$	2,710,679	$	11,100	$	2,721,779
International ROW
Devices	$	494,998	$	7,600	$	502,598	$	1,100,488	$	8,000	$	1,108,488
Handpieces		1,618,524		6,200		1,624,724		2,028,750		11,500		2,040,250
Other		30,715		-		30,715		102,663		400		103,063
Total International-ROW	$	2,144,237	$	13,800	$	2,158,037	$	3,231,901	$	19,900	$	3,251,801
International-China
Devices	$	-	$	-	$	-	$	-	$	-	$	-
Handpieces		-		-		-		100,000		-		100,000
Other		-		-		-				-		-
Total International	$	-	$	-	$	-	$	100,000	$	-	$	100,000
Total Product Sales	$	3,209,370	$	15,800	$	3,225,170	$	6,042,580	$	31,000	$	6,073,580

XML

Note 12 - Concentrations

9 Months Ended

Sep. 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

September 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

three

and

nine

months ended

September 30, 2020,

approximately

40%

and

45%

 of the Company's net product sales were from the Company's exclusive domestic dental distributor, respectively. For the

three

and

nine

months ended

September 30, 2019

net product sales were

54%

and

51%,

respectively, to the Company's exclusive domestic dental distributor. Accounts receivable for

two

 customers/distributors amounted to approximately

$720,000

 or

74%

,

or

60%

 and

14%

of Milestone Scientific's gross accounts receivable as of

September 30, 2020,

one

of which was the Company's exclusive domestic dental distributor.     Accounts receivable for the Company's exclusive domestic dental distributor amounted to approximately or

77%,

of Milestone Scientific's gross accounts receivable as of

December 31, 2019.

The Company's exclusive domestic dental distributor exclusivity for the domestic dental market is subject to annual purchase requirements and other requirements, as defined in the agreement.

The COVID-

19

pandemic affected the Company's operations in the

second

quarter and

third

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.

XML

Note 13 - Related Party Transactions

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE

13

 -- RELATED PARTY TRANSACTIONS

United Systems

Milestone Scientific has a manufacturing agreement with United Systems (whose controlling shareholder, Tom Cheng, is a significant stockholder of Milestone Scientific), 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 approximately

$373,000

and

$549,000

for the

three

months ended

September 30, 2020

and

2019,

respectively. Purchases from this manufacturer were approximately

$1,200,000

and

$1,100,000

for the

nine

months ended

September 30, 2020

and

2019,

respectively.  As

September 30, 2020

and

December 31, 2019,

Milestone Scientific owed this manufacturer approximately

$365,000

 and

$943,000,

respectively, which is included in accounts payable, related party on the condensed consolidated balance sheets. In

February 2019,

Milestone Scientific Board of Directors granted United Systems

285,714

shares of stock at

$0.35

or

$100,000

for consulting services. These shares were issued

July 2019.

On

April 29, 2020,

the Board of Directors approved the purchase of United Systems accounts receivable (

$370,260

) See Note

6.

 

Milestone China

As of

September 30, 2020,

Milestone Scientific owned a

40%

interest in Milestone China. See Note

6.

 
 

Other

As of

September 30, 2020,

and

December 31, 2019,

Milestone Scientific had deferred compensation for the previous Chief Executive Officer of Wand Dental of approximately of and

$308,000

and

$380,000,

respectively which is included accrued expenses related party.

In

August 2016,

K. Tucker Andersen, a significant stockholder of Milestone Scientific, entered into an agreement with Milestone Scientific to provide financial and business strategic services. Expenses recognized on this agreement were

$25,000

,

and

$75,000

for the

three

and

nine

months ended 

September 30, 2020,

and

2019,

respectively.

 In

January 2017,

Milestone Scientific entered into a

twelve

-month agreement with Innovest S.p.A., a significant stockholder of Milestone Scientific, to provide consulting services. This agreement will renew for successive

twelve

-month terms unless terminated by Innovest S.p.A or Milestone Scientific. Expenses recognized on this agreement were

$20,000

and

$60,000

for both the

three

and

nine

months ended

September 30, 2020,

and

2019,

respectively. This agreement was terminated

September 30, 2020. 

The Director of Clinical Affairs' royalty fee was approximately

$61,000

 and

$92,000

for the

three

months ended

September 30, 2020

and

2019,

respectively. The Director of Clinical Affairs' royalty fee was approximately

$158,000

 and

$292,000

for the

nine

months ended

September 30, 2020

and

2019,

respectively. Additionally, Milestone Scientific expensed consulting fees to the Director of Clinical Affairs of

$39,000

and

$117,000

 for the

three

and

nine

months ended

September 30, 2020

and

2019,

respectively. As of

September 30, 2020

and

December 31, 2019,

Milestone Scientific owed the Director Clinical Affairs for royalties of approximately

$80,000

 and

$390,000,

respectively, which is included in accounts payable, related party and accrued expense, related party.

XML

Note 14 - Commitments

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE

14

 — COMMITMENTS

(

1

)  Contract Manufacturing Agreement 

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. As of

September 30, 2020,

the purchase order commitment for dental instruments was

$515,284

 and advances of

$350,311

 are reported in inventory advances.
 

In

August 2019,

the company entered a new purchase commitment for the delivery of

100

Epidural instruments beginning in

2020.

As of

September 30, 2020,

we have an open purchase order of

$299,000

for

100

Epidural instruments and have advanced

$161,000

 against this purchase commitment. In

July 2020,

the company entered a new purchase commitment for the delivery of

110

cases of Epidural and Cathcheck disposable kits beginning in

November 2020.

As of

September 30, 2020,

we have an open purchase order of

$30,395

for

110

cases of Epidural and Cathcheck disposable kits and have advanced

$21,195

 against this purchase commitment.

(

2

)  Leases

Operating Leases

In

June 2015,

the Company amended its original office lease for its headquarters in Livingston, New Jersey. Under the amendment, the Company leased an additional

774

square feet of rentable area of the building and extended the term of the lease through

January 31, 2020

at a monthly cost of

$12,522.

The Company had an option to further extend the term of the lease, however, this option was

not

included in the determination of the lease's right-of-use asset or lease liability. Per the terms of the lease agreement, the Company does

not

have a residual value guarantee. The Company will also be required to pay its proportionate share of certain operating costs and property taxes applicable to the leased premises in excess of new base year amounts. These costs are considered to be variable lease payments and are

not

included in the determination of the lease's right-of-use asset or lease liability. 

In

August 2019,

the Company made the decision to

not

renew the its existing office lease for its corporate headquarters located in Livingston, New Jersey and instead signed a new

seven

(

7

) year lease in a new facility located in Roseland, New Jersey (the “Roseland Facility”), which commenced of

January 8, 2020.

Under the Roseland Facility lease, rent payments commence on

April 1, 2020

and the monthly lease payments escalate annually on

January 1

of each year, and range from

$9,275

to

$10,898

per month over the lease term. The Company is also required to pay a fixed electric charge equal to

$2.00

per square foot which is  paid in equal monthly installments over the lease term or

$11,130

annually. These fixed monthly payments have been included in the measurement of the operating lease liability and related operating lease right-of-use asset as the Company has elected the practical expedient to

not

separate lease and non-lease components for all leases. The Company is also required to pay its proportionate share of certain operating costs and property taxes applicable to the leased premises in excess of new base year amounts, which are accounted for as variable lease expenses. 

As of

September 30, 2020,

total operating lease right-of-use assets were

$655,870

and total operating lease liabilities were

$645,341,

of which

$68,934

and

$576,407

were classified as current and non-current, respectively. As of

December 31, 2019,

total operating right-of-use assets were

$15,977

 and total operating lease liabilities (current) were

$15,977.

During the

nine

 months ended

September 30, 2020,

the Company also entered into a

five

-year lease for copiers which resulted in the recognition of property and equipment and total finance lease liabilities of

$43,242.

As of

September 30, 2020,

total finance lease liabilities were

$38,527,

of which

$7,903

and

$30,624

were classified as current and non-current, respectively.

Cash flow information related to the Company's right-of-use assets and related lease liabilities were as follows:

	Three months ended September 30,				Nine months ended September 30,
Lease cost	2020		2019		2020		2019
Cash paid for operating lease liabilities		30,820		39,555		78,904		118,664
Cash paid for finance lease liabilities		2,658		-		7,622		-
Right-of-use assets obtained in exchange for new operating lease liabilities (1)		-		-		663,009		-
Property and equipment obtained in exchange for new finance lease liabilities		-				43,242		-
(1) For the nine months ended September 30, 2019, the balance includes operating leases existing as of the adoption of ASC 842 on January 1, 2019.
Weighted-average remaining lease term - operating leases (years)		-		-		6.5		0.4
Weighted-average remaining lease term- finance leases (years)		-		-		4.3		-

(

3

)  Other Commitments

The technology underlying the

Safety Wand

® and

CompuFlo

®, and an improvement to the controls for

CompuDent

® were developed by the Director of Clinical Affairs and assigned to Milestone Scientific. Milestone Scientific purchased this technology pursuant to an agreement dated

January 1, 2005.

The Director of Clinical Affairs 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 until the expiration of the last patent covering these technologies. If products produced by

third

parties use any of these technologies (under license from us) then the Director of Clinical Affairs will receive the corresponding percentage of the consideration received by Milestone Scientific for such sale or license. See note 

13

Other.

XML

Note 15 - Subsequent Events

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE 

15—

SUBSEQUENT EVENTS

Since the quarter ended

September 30, 2020,

the Company issued

8,000

shares of common stock for warrants exercised at

$1.20

for proceeds of

$9,600.

The Company engaged Gian Domenico Trombetta, former CEO of Wand Dental Inc. as a consultant to Leonard Osser, Interim – Chief Executive Officer of Milestone Scientific for a period of

twelve

months (beginning

October 1, 2020

and ending

September 30, 2021).

Gian Domenico Trombetta will provide historical International Business, Dental Segment information and business contacts to Mr. Osser and provide consulting services  for new International Business and Dental Segment concepts during this

twelve

month consulting period. Under this agreement, Mr. Trombetta is to receive

$60,000

payable in Milestone Scientific shares.

XML

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

1.

  Principles of Consolidation

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and include the accounts of Milestone Scientific and its wholly owned and majority owned subsidiaries, including, Wand Dental (wholly owned), Milestone Advanced Cosmetic (majority owned), Milestone Education (wholly owned) and Milestone Medical (majority owned). All significant, intra-entity transactions and balances have been eliminated in consolidation.

Basis of Accounting, Policy [Policy Text Block]

2.

Basis of Presentation

The unaudited condensed consolidated financial statements of Milestone Scientific have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information with the instructions for Form

10

-Q and Article

8

of Regulation S-

X.

Accordingly, they do

not

include all the information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting of normal recurring entries) necessary to fairly present such interim results. Interim results are

not

necessarily indicative of the results of operations which

may

be expected for a full year or any subsequent period. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto for the year ended

December 31, 2019,

included in Milestone Scientific's Annual Report on Form

10

-K.  

Reclassification, Comparability Adjustment [Policy Text Block]

3.

  Reclassifications

Certain reclassification has been made to the

2019

 financial statements to conform to the unaudited condensed consolidated

2020

 financial statement presentation. These reclassifications had

no

effect on net loss or cash flows as previously reported.

Use of Estimates, Policy [Policy Text Block]

4.

  Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to the allowance for doubtful accounts, inventory valuation, and cash flow assumptions regarding evaluations for impairment of long-lived assets and going concern considerations, and valuation allowances on deferred tax assets. Actual results could differ from those estimates.

Revenue [Policy Text Block]

5.

  Revenue Recognition

The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To perform revenue recognition for customer arrangements the Company performs the following

five

steps: 

i.	identification of the promised goods or services in the contract;
ii.	determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract;
iii.	measurement of the transaction price, including the constraint on variable consideration;
iv.	allocation of the transaction price to the performance obligations based on estimated selling prices; and
v.	recognition of revenue when (or as) the Company satisfies each performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606.

The Company derives its revenues from the sale of its products, primarily dental instruments, handpieces, and other related products. The Company sells its products through a global distribution network and that includes both exclusive and non-exclusive distribution agreements with related and

third

parties.

Revenue from product sales is recognized upon transfer of control of a product to a customer, generally upon date of shipment. For certain arrangements where the shipping terms are FOB destination, revenue is recognized upon delivery. The Company has

no

obligation on product sales for any installation, set-up, or maintenance, these being the responsibility of the buyer. Milestone Scientific's only obligation after transfer of control, except for specific contracts and arrangements  that provide for  customer right to return provisions, is the normal commercial warranty against manufacturing defects if the alleged defective unit is returned within the warranty period. 

Sales Returns

The Company records allowances for product returns as a reduction of revenue at the time product sales are recorded. Several factors are considered in determining whether an allowance for product returns is required, including the customers' return rights and the Company's historical experience with returns and the amount of product in the distribution channel

not

consumed by end users and subject to return. The Company relies on historical return rates to estimate returns. In the future, if any of these factors and/or the history of product returns change, adjustments to the allowance for product returns

may

be required.

 Financing and Payment

Our payment terms differ by geography and customer, but payment is generally required within

90

days from the date of shipment or delivery.

Disaggregation of Revenue

We operate in

two

operating segments: dental and medical. Therefore, results of our operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting. See Note

11

 for revenues by geographical market, and product category for the 

three

and

nine

months ended

September 30, 2020

and

2019.

Consolidation, Variable Interest Entity, Policy [Policy Text Block]

6.

  Variable Interest Entities

A variable interest entity ("VIE") is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the entity's economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. 

Because Milestone Scientific has a variable interest in Milestone China it considered the guidance in ASC

810,

“Consolidation” as it relates to determining whether Milestone China is a VIE and, if so, identifying the primary beneficiary. Milestone Scientific would be considered the primary beneficiary of the VIE if it has both of the following characteristics:

● Power Criterion: The power to direct the activities that most significantly impact the entity's economic performance; and

● Losses/Benefits Criterion: The obligation to absorb losses that could potentially be significant or the right to receive benefits that could potentially be significant to the VIE.

Milestone Scientific does

not

have the ability to control the activities that most significantly impact Milestone China's economics and, therefore, the power criterion has

not

been met. Management placed the most weight on the relationship and significance of activities of Milestone China to the CEO and a group of significant shareholders, including the Milestone China CEO, which have the power to direct the activities that most significantly impact the economic performance of Milestone China. Management has concluded that Milestone Scientific is

not

the primary beneficiary under ASC

810.

See Note

6.

Cash and Cash Equivalents, Policy [Policy Text Block]

7.

  Cash and Cash Equivalents

Milestone Scientific considers all highly liquid investments purchased with an original maturity of

three

months or less to be cash equivalents. The Company maintains its cash and cash equivalents in bank deposit and other interest-bearing accounts, the balances of which, at times,

may

exceed federally insured limits.

Accounts Receivable [Policy Text Block]

8.

  Accounts Receivable

Milestone Scientific sells a significant amount of its product on credit terms to its major distributors. Milestone Scientific estimates losses from the inability of its customers to make payments on amounts billed. Most credit sales are due within

90

days from invoicing. There have

not

been any significant credit losses incurred to date. As of

September 30, 2020,

and

December 31, 2019,

accounts receivable was recorded, net of allowance for doubtful accounts of

$10,000

.

Inventory, Policy [Policy Text Block]

9.

  Inventories

Inventories principally consist of finished goods and component parts stated at the lower of cost (

first

-in,

first

-out method) or net realizable value. Inventory quantities on hand are reviewed on a quarterly basis and a provision for excess, slow moving, defective, and obsolete inventory is recorded if required based on past and expected future sales, potential technological obsolescence, and product expiration requirements. The valuation allowance creates a new cost basis for the inventory, and it is

not

subsequently marked up through a reduction in the valuation allowance based on any changes in the underlying facts and circumstances. When the valuation allowance is initially recorded, the increase to the allowance is recognized as an increase in cost of sales. The valuation allowance is only reduced if or when the underlying inventory is sold or destroyed, at which time cost of sales recognized would include the previous adjusted cost basis. 

Equity Method Investments [Policy Text Block]

10.

  Equity Method Investments

Investments in which Milestone Scientific can exercise significant influence, but do

not

control, are accounted for under the equity method of accounting and are included in the long-term assets on the Condensed Consolidated Balance Sheets. Under this method of accounting, Milestone Scientific's share of the net earnings or losses of the investee is presented below the income tax line on the  unaudited Condensed Consolidated Statements of Operations. Milestone Scientific evaluates its equity method investments whenever events or changes in circumstance indicate that the carrying amounts of such investments

may

be impaired. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period.

Property, Plant and Equipment, Policy [Policy Text Block]

11.

  Furniture, Fixture and Equipment  

Equipment is recorded at cost, less accumulated depreciation. Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets, which range from

two

to

seven

years. The costs of maintenance and repairs are charged to operations as incurred. 

Intangible Assets, Finite-Lived, Policy [Policy Text Block]

12.

  Intangible Assets – Patents and Developed Technology

Patents are recorded at cost to prepare and file the applicable documents with the US Patent Office, or internationally with the applicable governmental office in the respective country. The costs related to these patents are being amortized using the straight-line method over the estimated useful life of the patent. Patents and other developed technology acquired from another business entity will be amortized based on the estimated useful life of the patent. These patents and developed technology are recorded at the acquisition cost.         

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

13.

  Impairment of Long-Lived Assets

Long-lived assets with finite lives are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset

may

not

be recoverable. The Company's impairment review process is based upon an estimate of future undiscounted cash flow. Factors the Company considers that could trigger an impairment review include the following: 

● significant under performance relative to expected historical or projected future operating results,

● significant changes in the manner of our use of the acquired assets or the strategy for our overall business

● significant negative industry or economic trends; and

● significant technological changes, which would render the technology obsolete

Recoverability of assets that will continue to be used in the Company's operations is measured by comparing the carrying value to the future net undiscounted cash flows expected to be generated by the asset or asset group. Future undiscounted cash flows include estimates of future revenues, driven by market growth rates, and estimated future costs.

Debt, Policy [Policy Text Block]

14.

Note Payable

On

April 27, 2020,

the Company, was granted a loan (the “Loan”) from Savoy Bank. in the aggregate amount of approximately 

$276,000,

pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted

March 27, 2020.

The Loan, which was in the form of a Note dated

April 27, 2020, 

matures on

April 27, 2022,

and bears interest at a rate of

1.00%

per annum, payable monthly commencing on

November 26, 2020.

The Note

may

be prepaid by the Borrower at any time prior to maturity with

no

prepayment penalties. Funds from the Loan

may

only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred before

February 15, 2020.

The Company intends to use the entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan

may

be forgiven if they are used for qualifying expenses as described in the CARES Act.

Research and Development Expense, Policy [Policy Text Block]

15.

  Research and Development

Research and development costs, which consist principally of new product development costs payable to

third

parties, are expense as incurred. Advance payments for the research are amortized to expense either as services are performed or over the relevant service period using the straight-line method.

Income Tax, Policy [Policy Text Block]

16.

  Income Taxes

Milestone Scientific accounts for income taxes pursuant to the asset and liability method which requires deferred income tax assets and liabilities to be computed for temporary differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.       

On

September 30, 2020 

and

December 31, 2019,

we had

no

uncertain tax positions that required recognition in the condensed consolidated financial statements. Milestone Scientific's policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the condensed consolidated statements of operations.

No

interest and penalties are present for periods open. Tax returns for the

2016,

2017,

and

2018

 years are subject to audit by federal and state jurisdictions. 

Earnings Per Share, Policy [Policy Text Block]

17.

  Basic and diluted net loss per common share

Milestone Scientific presents “basic” earnings (loss) per common share applicable to common stockholders and, if applicable, “diluted” earnings (loss) per common share applicable to common stockholders pursuant to the provisions of ASC

260,

“Earnings per Share”. Basic earnings (loss) per common share is calculated by dividing net income or loss applicable to common stockholders by the weighted average number of common shares outstanding and to be issued during each period. The calculation of diluted earnings per common share is like that of basic earnings per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares, such as those issuable upon the exercise of stock options and warrants were issued during the period.

Since Milestone Scientific had net losses in the

three

and 

nine

months ended

September 30, 2020

and

2019,

the assumed effects of the exercise of potentially dilutive outstanding stock options, and warrants, were

not

included in the calculation as their effect would have been anti-dilutive. Such outstanding options, and warrants totaled

7,477,171

and

5,004,415

on

September 30, 2020

and

2019,

respectively. 

Fair Value of Financial Instruments, Policy [Policy Text Block]

18.

  Fair Value of Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market at the measurement date (exit price). We are required to classify fair value measurements in

one

of the following categories:

● Level 1 inputs which are defined as quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

● Level 2 inputs which are defined as inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly.

● Level 3 inputs are defined as unobservable inputs for the assets or liabilities.

Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of an input to the fair value measurement requires judgment and

may

affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. As of

September 30, 2020

the Company does

not

have any assets or liabilities that were measured at fair value on a recurring basis. The carrying amounts reported in the accompanying unaudited condensed consolidated financial statements for current assets and current liabilities approximate the fair value because of the immediate or short-term maturities of the financial instruments. 

Derivatives, Policy [Policy Text Block]

19.

Derivative Liability

The Company does

not

use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks; however, the Company had certain financial instruments that qualified as derivatives and were classified as liabilities on the balance sheet during the year ended

December 31, 2019.

The Company evaluates all its financial instruments to determine if those instruments or any potential embedded components of those instruments qualify as derivatives that need to be separately accounted for in accordance with FASB ASC

815,

“Derivatives and Hedging”. Derivatives satisfying certain criteria are recorded at fair value at issuance and marked-to-market at each balance sheet date with the change in the fair value recorded as income or expense. In addition, upon the occurrence of an event that requires a derivative liability to be reclassified to equity, the derivative liability is revalued to fair value at that date. See Note

9,

Outstanding Equity Instruments in Excess of Authorized Shares.   

Share-based Payment Arrangement [Policy Text Block]

20.

  Stock-Based Compensation

Milestone Scientific accounts for stock-based compensation under ASC Topic

718,

"Compensation - Stock Compensation". ASC Topic

718

requires all share-based payments to employees, including grants of employee stock options, to be recognized in the Statements of Operations over the service period, as an operating expense, based on the grant-date fair values.

Lessee, Leases [Policy Text Block]

21.

Leases

At the inception of an arrangement, we determine whether an arrangement is, or contains, a lease. An arrangement is, or contains, a lease if the arrangement conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Leases with a term greater than

one

year are generally recognized on the balance sheet as right-of-use assets and current and non-current lease liabilities, as applicable. We have elected

not

to recognize on the balance sheet leases with terms of

12

months or less. We typically only include the initial lease term in our assessment of a lease arrangement. Options to extend a lease are

not

included in our assessment unless there is reasonable certainty that we will renew.

Finance and operating lease right-of-use assets represent the Company's right to use an underlying asset over the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease. These assets and obligations are recognized at the lease commencement date based on the present value of lease payments, net of incentives, over the lease term. The interest rate implicit in our leases is typically

not

readily determinable. As a result, we utilize our incremental borrowing rate, which reflects the fixed rate at which we could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.

We evaluate the classification of our leases as either finance leases or operating leases. Leases that are economically similar to the purchase of assets are generally classified as finance leases; otherwise, the leases are classified as operating leases. Lease cost for our operating leases is recognized on a straight-line basis over the lease term. Included in lease cost are any variable lease payments incurred in the period that are

not

included in the initial lease liability and lease payments incurred in the period for any leases with an initial term of

12

months or less.  

New Accounting Pronouncements, Policy [Policy Text Block]

22.

  Recent Accounting Pronouncements

In

June 2016,

the Financial Accounting Standards Board (“FASB”) issued a new standard ASU

No.

2016

-

13,

“Financial Instruments – Credit Losses” (Topic

326

), and subsequently amended. The new standard is intended to replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. It will be effective for all smaller reporting entities for fiscal years and interim periods, beginning after

December 15, 2022. 

The adoption of this standard is

not

expected to have a material effect on financial statement presentation. 

In

August 2018,

FASB issued ASU

2018

-

13,

 “Fair Value Measurement: Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (Topic

820

), which changes the fair value measurement disclosure requirements of ASC

820.

This ASU removes certain disclosure requirements regarding the amounts and reasons for transfers between Level

1

and Level

2

of the fair value hierarchy and the policy for timing of transfers between the levels. This ASU also adds disclosure requirements regarding unrealized gains and losses included in Other Comprehensive Income for recurring Level

3

fair value measurements and the range and weighted average of unobservable inputs used in Level

3

fair value measurements. ASU

2018

-

13

 is effective for all entities with fiscal years beginning after

December 15, 2019,

including interim periods therein. The adoption of this standard did

not

have a material effect on financial statement presentation. 

In

August 2018,

FASB issued ASU

2018

-

15,

 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic

350

-

40

):Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract , which provides guidance for the accounting treatment for the software arrangements used by companies. ASU

2018

-

15

 is effective for all entities with fiscal years beginning after

December 15, 2019,

including interim periods therein. The adoption of this standard did

not

have a material effect on financial statement presentation. 

In

December 2019,

FASB issued ASU

2019

-

12,

 “Income Taxes (Topic

740

): Simplifying the Accounting for Income Taxes, which clarifies for the accounting treatment for the accounting tax aspects relating, in part, to the intraperiod allocations and foreign subsidiaries. ASU

2019

-

12

 is effective for all entities with fiscal years beginning after

December 15, 2020.

The adoption of this standard is

not

expected to have a material effect on financial statement presentation.

In

January 2020,

FASB issued ASU

2020

-

01,

 “Investments—Equity Securities (Topic

321

), Investments—Equity Method and Joint Ventures (Topic

323

), and Derivatives and Hedging (Topic

815

), which, generally, provides guidance for investments in entities accounted for under the equity method of accounting . ASU

2020

-

01

 is effective for all entities with fiscal years beginning after

December 15, 2021,

including interim periods therein.  We are currently evaluating the impact of adopting this guidance on our consolidated balance sheets, results of operations, and financial condition.

In

August 2020,

FASB issued ASU

2020

-

06,

 “Debt—Debt with Conversion and Other Options (Subtopic

470

-

20

) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic

815

-

40

): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity; which, generally, provides guidance for accounting regarding derivatives relating to entities common stock and earnings per share. ASU

2020

-

06

 is effective for all entities with fiscal years beginning after

December 15, 2021,

including interim periods therein. The adoption of this standard is

not

expected to have a material effect on financial statement presentation

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Note 4 - Inventories (Tables)

9 Months Ended

Sep. 30, 2020

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	September 30, 2020		December 31, 2019
Dental finished goods, net	$	1,705,519	$	1,306,763
Medical finished goods, net		169,549		213,861
Component parts and other materials		354,692		99,885
Total inventories	$	2,229,760	$	1,620,509

XML

Note 7 - Patents (Tables)

9 Months Ended

Sep. 30, 2020

Notes Tables

Schedule of Finite-Lived Intangible Assets [Table Text Block]

September 30, 2020	Cost		Accumulated Amortization			Net
Patents-foundation intellectual property	$	1,377,863	$	(1,035,362	)	$	342,501
Total	$	1,377,863	$	(1,035,362	)	$	342,501

December 31, 2019	Cost		Accumulated Amortization			Net
Patents-foundation intellectual property	$	1,377,863	$	(995,603	)	$	382,260
Total	$	1,377,863	$	(995,603	)	$	382,260

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Note 9 - Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2020

Notes Tables

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

	Warrant shares outstanding			Weighted Average exercise price		Weighted Average remaining life		Intrinsic value
Outstanding at January 1, 2020		1,074,171		$	0.50	$	4.10		956,012
Issued		6,459,000			2.01		3.00		-
Exercised		(1,133,975	)		0.87		-		-
Expired or cancelled		-			-		-		-
Outstanding and exercisable at September 30, 2020		6,399,196		$	1.95	$	2.73		880,449

	Warrant shares outstanding			Weighted Average exercise price		Weighted Average remaining life		Intrinsic value
Outstanding at January 1, 2019		1,592,775		$	2.55	$	0.21		-
Issued		1,749,171			0.50		4.35		560,199
Exercised		(57,750	)		0.50		-		-
Expired or cancelled		-			-		-		-
Outstanding and exercisable at September 30, 2019		3,284,196		$	1.49	$	2.30		560,199

Deferred Compensation Arrangement with Individual, Share-based Payments [Table Text Block]

	September 30, 2020			September 30, 2019
Shares-to-be-issued, outstanding January 1, 2020 and 2019, respectively		2,375,762			2,470,566
Granted in current period		363,956			1,392,460
Issued in current period		(387,991	)		(1,216,680	)
Shares-to be issued outstanding September 30, 2020 and 2019, respectively		2,351,727			2,646,346

Schedule of Warrant or Right Outstanding and Options, Valuation Assumptions [Table Text Block]

	2016 Warrants			2019 Warrants
Fair Value of Common Stock		$.36- $.83		$	0.33
Expected Term (years)	.25-.5 years			4.9 years
Volatility		86% - 100%			83	%
Dividend yield		0	%		0	%
Exercise Price	$	2.55		$	0.50
Risk-free interest rate		1.88% - 2.09%			2.30	%
Weighted average fair value of warrants granted	$	-		$	0.19
Number of shares underlying warrants granted		1,512,067			1,749,171

	2016 Warrants			2019 Warrants
Fair Value of Common Stock	$	0.83		$	0.08
Expected Term (years)	.02 years			4.4 years
Volatility		86	%		86	%
Dividend yield		0	%		0	%
Exercise Price	$	2.55		$	0.50
Risk-free interest rate		1.88	%		1.55	%
Weighted average fair value of warrants granted	$	-			61.00	%
Number of shares underlying warrants granted	$	1,512,067		$	1,691,421

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Note 11 - Segment and Geographic Data (Tables)

9 Months Ended

Sep. 30, 2020

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Net Sales:	Three months ended September 30,2020		Three months ended September 30, 2019		Nine months ended September 30,2020		Nine months ended September 30, 2019
Dental	$	1,240,110	$	1,884,321	$	3,209,370	$	6,042,580
Medical		6,000		15,500		15,800		31,000
Total net sales	$	1,246,110	$	1,899,821	$	3,225,170	$	6,073,580

Operating Income (Loss):	Three months ended September 30,2020			Three months ended September 30, 2019			Nine months ended September 30,2020			Nine months ended September 30, 2019
Dental	$	191,235		$	644,650		$	(32,624	)	$	1,766,087
Medical		(812,840	)		(554,843	)		(2,297,080	)		(1,711,184	)
Corporate		(855,123	)		(1,036,541	)		(3,928,521	)		(2,927,652	)
Total operating loss	$	(1,476,728	)	$	(946,734	)	$	(6,258,225	)	$	(2,872,749	)

Depreciation and Amortization	Three months ended September 30, 2020		Three months ended September 30, 2019		Nine months ended September 30, 2020		Nine months ended September 30, 2019
Dental	$	402	$	3,950	$	9,202	$	11,875
Medical		674		2,424		5,006		7,424
Corporate		15,429		19,044		60,653		57,620
Total depreciation and amortization	$	16,505	$	25,418	$	74,861	$	76,919

Income (loss) before taxes and equity in earnings of affiliates:	Three months ended September 30, 2020			Three months ended September 30, 2019			Nine months ended September 30, 2020			Nine months ended September 30, 2019
Dental	$	190,472		$	645,442		$	(35,376	)	$	1,765,475
Medical		(813,935	)		(556,969	)		(2,300,243	)		(1,713,362	)
Corporate		(853,834	)		(2,937,140	)		(3,931,333	)		(4,777,690	)
Total loss before taxes and equity in earnings of affiliate	$	(1,477,297	)	$	(2,848,667	)	$	(6,266,952	)	$	(4,725,577	)

Total Assets:	September 30, 2020		December 31, 2019
Dental	$	5,391,842	$	5,008,324
Medical		977,160		590,727
Corporate		13,576,619		957,238
Total assets	$	19,945,621	$	6,556,289

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block]

	Three months ended September 30, 2020						Three months ended September 30, 2019
	Dental		Medical		Total		Dental		Medical		Total
Domestic-US
Devices	$	34,657	$	-	$	34,657	$	199,926	$	-	$	199,926
Handpieces		356,566		-		356,566		679,621		-		679,621
Other		16,906		-		16,906		17,343		-		17,343
Total Domestic US	$	408,129	$	-	$	408,129	$	896,890	$	-	$	896,890
international
Devices	$	220,694	$	-	$	220,694	$	412,819	$	-	$	412,819
Handpieces		602,000		6,000		608,000		564,265		15,500		579,765
Other		9,287				9,287		10,347		-		10,347
Total International	$	831,981	$	6,000	$	837,981	$	987,431	$	15,500	$	1,002,931
International-China
Devices	$	-	$	-	$	-	$	-	$	-	$	-
Handpieces		-		-		-		-		-		-
Other		-		-		-		-				-
Total International	$	-	$	-	$	-	$	-	$	-	$	-
Total Product Sales	$	1,240,110	$	6,000	$	1,246,110	$	1,884,321	$	15,500	$	1,899,821

	Nine months ended September 30, 2020						Nine months ended September 30, 2019
	Dental		Medical		Total		Dental		Medical		Total
Domestic-US & Canada
Devices	$	35,181	$	-	$	35,181	$	398,729	$	10,800	$	409,529
Handpieces		992,057		2,000		994,057		2,250,542		300		2,250,842
Other		37,895		-		37,895		61,408		-		61,408
Total Domestic US & Canada	$	1,065,133	$	2,000	$	1,067,133	$	2,710,679	$	11,100	$	2,721,779
International ROW
Devices	$	494,998	$	7,600	$	502,598	$	1,100,488	$	8,000	$	1,108,488
Handpieces		1,618,524		6,200		1,624,724		2,028,750		11,500		2,040,250
Other		30,715		-		30,715		102,663		400		103,063
Total International-ROW	$	2,144,237	$	13,800	$	2,158,037	$	3,231,901	$	19,900	$	3,251,801
International-China
Devices	$	-	$	-	$	-	$	-	$	-	$	-
Handpieces		-		-		-		100,000		-		100,000
Other		-		-		-				-		-
Total International	$	-	$	-	$	-	$	100,000	$	-	$	100,000
Total Product Sales	$	3,209,370	$	15,800	$	3,225,170	$	6,042,580	$	31,000	$	6,073,580

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Note 14 - Commitments (Tables)

9 Months Ended

Sep. 30, 2020

Notes Tables

Lease, Cost and Other Information [Table Text Block]

	Three months ended September 30,				Nine months ended September 30,
Lease cost	2020		2019		2020		2019
Cash paid for operating lease liabilities		30,820		39,555		78,904		118,664
Cash paid for finance lease liabilities		2,658		-		7,622		-
Right-of-use assets obtained in exchange for new operating lease liabilities (1)		-		-		663,009		-
Property and equipment obtained in exchange for new finance lease liabilities		-				43,242		-
(1) For the nine months ended September 30, 2019, the balance includes operating leases existing as of the adoption of ASC 842 on January 1, 2019.
Weighted-average remaining lease term - operating leases (years)		-		-		6.5		0.4
Weighted-average remaining lease term- finance leases (years)		-		-		4.3		-

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Note 1 - Organization and Business (Details Textual)	Sep. 30, 2020
Number of Countries in which Entity Operates	60

XML

Note 2 - Liquidity and Uncertainties (Details Textual) - USD ($)	1 Months Ended		9 Months Ended
	Jun. 30, 2020	Apr. 30, 2020	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Proceeds from Issuance of Common Stock			$ 18,043,284	$ 1,974,547
Cash and Cash Equivalents, at Carrying Value, Ending Balance			14,448,903		$ 1,516,272
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect, Total			$ 12,932,631	$ 967,820
April 6, 2020 Public Offering [Member]
Proceeds from Issuance of Common Stock		$ 4,600,000
June 30, 2020 Public Offering [Member]
Proceeds from Issuance of Common Stock	$ 13,400,000

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Note 3 - Summary of Significant Accounting Policies (Details Textual)		3 Months Ended	9 Months Ended
	Apr. 27, 2020 USD ($)	Sep. 30, 2020 shares	Sep. 30, 2020 USD ($) shares	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Number of Operating Segments			2
Accounts Receivable, Allowance for Credit Loss, Ending Balance				$ 10,000	$ 10,000
Proceeds from Notes Payable, Total			$ 276,180
Options and Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | shares		7,477,171	5,004,415
Paycheck Protection Program CARES Act [Member]
Proceeds from Notes Payable, Total	$ 276,000
Minimum [Member]
Property, Plant and Equipment, Useful Life (Year)			2 years
Maximum [Member]
Property, Plant and Equipment, Useful Life (Year)			7 years

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Note 4 - Inventories (Details Textual) - USD ($)	3 Months Ended
	Jun. 30, 2020	Sep. 30, 2020	Dec. 31, 2019
Slow Moving Medical Finished Goods [Member]
Inventory Valuation Reserves, Ending Balance		$ 450,000	$ 450,000
Slow Moving Dental Finished Goods [Member]
Inventory Valuation Reserves, Ending Balance		$ 7,000	$ 318,000
Inventory Write-down	$ 311,000

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Note 4 - Inventories - Summary of Inventories (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Component parts and other materials	$ 354,692	$ 99,885
Total inventories	2,229,760	1,620,509
Dental Segment [Member]
Finished goods, net	1,705,519	1,306,763
Medical Segment [Member]
Finished goods, net	$ 169,549	$ 213,861

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Note 5 - Advances on Contracts (Details Textual) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Advances on Inventory Purchases	$ 723,084	$ 710,662

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Note 6 - Investment in and Transactions with Equity Investees (Details Textual) - USD ($)			1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	May 31, 2020	Apr. 29, 2020	Jul. 31, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2020	Apr. 23, 2020	Jun. 30, 2014
Accounts Receivable, Allowance for Credit Loss, Ending Balance					$ 10,000		$ 10,000	$ 10,000
Share Price (in dollars per share)					$ 0.83		$ 0.83
Income (Loss) from Equity Method Investments, Total							$ 49,099
Acquisition of Advanced Cosmetic Systems [Member]
Business Acquisition, Percentage of Voting Interests Acquired	50.00%
Business Combination, Consideration Transferred, Total	$ 900,000
Business Combination, Percentage of Ownership Interest that Seller of Ownership Interest May Repurchase Within One Year of Sale Date	50.00%
Business Combination, Price at Which the Additional Ownership Interest Acquired May Repurchased Within One Year of Sale Date	$ 900,000
Business Combination, Step Acquisition, Equity Interest in Acquiree, including Subsequent Acquisition, Percentage, Total	100.00%
Manufacturing Agreement for Handpieces [Member]
Related Party Transaction, Purchases from Related Party		$ 370,260		$ 373,000	549,000	$ 1,200,000	1,100,000
Sale Price in Cash [Member]
Related Party Transaction, Purchases from Related Party		100,000	$ 100,000
Sale Price in Share [Member]
Related Party Transaction, Purchases from Related Party		$ 170,260
Share Price (in dollars per share)											$ 1.59
Milestone China [Member]
Equity Method Investments												$ 1,000,000
Equity Method Investment, Ownership Percentage				40.00%		40.00%						40.00%
Financing Receivable, after Allowance for Credit Loss, Total									$ 2,800,000
Proceeds from Collection of Finance Receivables									950,000
Accounts Receivable, Allowance for Credit Loss, Ending Balance									$ 1,250,000
Revenue from Related Parties				$ 0	0	$ 0	0
Contract with Customer, Liability, Revenue Recognized					0		100,000
Due from Related Parties, Total				1,400,000		1,400,000
Costs and Expenses, Related Party						370,260
Equity Method Investment, Deferred Intercompany Profit (Loss), Percentage									40.00%
Income (Loss) from Equity Method Investments, Total				0	$ 0	0	$ 49,099
Cost-method Investments, Realized Losses								4,300,000
Milestone China [Member] | Accounts Receivable from Related Parties [Member]
Equity Method Investment, Deferred Intercompany Profit (Loss)				$ 340,476		$ 340,476		$ 340,476
Milestone Beijing [Member] | Milestone China [Member]
Equity Method Investment, Ownership Percentage												75.00%
Anhui [Member] | Forecast [Member]
Equity Method Investment, Ownership Percentage										28.40%

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Note 7 - Patents (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Amortization of Intangible Assets, Total	$ 13,000	$ 13,000	$ 39,759	$ 39,760
Patents [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life (Year)			3 years
Patents [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life (Year)			20 years

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Note 7 - Patents - Summary of Patents (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Patents, cost	$ 1,377,863	$ 1,377,863
Patents, impairment	(1,035,362)	(995,603)
Patents, accumulated amortization	342,501	382,260
Foundation Intellectual Property Patents [Member]
Patents, cost	1,377,863	1,377,863
Patents, impairment	(1,035,362)	(995,603)
Patents, accumulated amortization	$ 342,501	$ 382,260

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Note 8 - Note Payable (Details Textual) - USD ($)		9 Months Ended
	Apr. 27, 2020	Sep. 30, 2020	Sep. 30, 2019
Proceeds from Notes Payable, Total		$ 276,180
Paycheck Protection Program CARES Act [Member]
Proceeds from Notes Payable, Total	$ 276,000

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Note 9 - Stockholders' Equity (Details Textual) $ / shares in Units, xbrli-pure in Thousands			1 Months Ended				3 Months Ended	9 Months Ended
	Jun. 30, 2020 USD ($) $ / shares shares	May 14, 2019 $ / shares shares	Jun. 30, 2020 USD ($) $ / shares shares	Apr. 30, 2020 USD ($) $ / shares shares	Feb. 28, 2019 USD ($) $ / shares shares	May 31, 2014 USD ($) $ / shares shares	Sep. 30, 2019 USD ($) $ / shares shares	Sep. 30, 2020 USD ($) $ / shares shares	Sep. 30, 2019 USD ($) $ / shares shares	Dec. 31, 2019 $ / shares shares	Dec. 17, 2019 shares	Jun. 30, 2019 $ / shares	Dec. 31, 2018 $ / shares shares
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares								$ 1.95		$ 0.50		$ 1.49	$ 2.55
Proceeds from Issuance of Private Placement | $					$ 250,000	$ 10,000,000			$ 250,000
Share Price (in dollars per share) | $ / shares							$ 0.83		$ 0.83
Proceeds from Issuance of Common Stock | $								$ 18,043,284	$ 1,974,547
Deferred Compensation Arrangement with Individual, Shares Authorized for Issuance (in shares)							2,646,346	2,351,727	2,646,346	2,375,762			2,470,566
Class of Warrant or Right, Reclassified During Period (in shares)									376,000
Gain (Loss) on Issuance of Shares to be Issued | $							$ (680,542)		$ (674,792)
Derivative Instruments Not Designated as Hedging Instruments, Gain | $							$ 1,200,000		$ 1,200,000
Common Stock, Shares Authorized (in shares)								75,000,000		75,000,000	75,000,000
Derivative, Number of Instruments Held, Total								0
Common Stock, Shares, To be Issued (in shares)							2,600,000		2,600,000
Chief Executive Officer, Chief Financial Officer and Employees [Member]
Deferred Compensation Arrangement with Individual, Shares Authorized for Issuance (in shares)							2,294,734	2,202,229	2,294,734
Non-Employees [Member]
Common Stock, Capital Shares Reserved for Future Issuance (in shares)							351,612	149,498	351,612
Preferred Stock Converted to Common Stock [Member]
Conversion of Stock, Conversion Price (in dollars per share) | $ / shares		$ 1.17
Conversion of Stock, Shares Issued (in shares)		5,982,906
Warrants, Public Offering [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)					1,428,750
Warrants and Rights Outstanding, Term (Year)					5 years
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares					$ 0.50
Underwrite Warrants [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)					141,850
Warrants, Private Offering [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)					178,571
Warrants and Rights Outstanding, Term (Year)					5 years
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares					$ 0.50
Warrants Associated With April 2020 Public Offering [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)				2,710,000
Warrants and Rights Outstanding, Term (Year)				3 years
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares				$ 1.20
Warrants Associated With the June 2020 Public Offering [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)	3,749,000		3,749,000
Warrants and Rights Outstanding, Term (Year)	3 years		3 years
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares	$ 2.60		$ 2.60
Public Offering [Member]
Proceeds from Issuance or Sale of Equity, Total | $					$ 2,000,000
Stock Issued During Period, Shares, New Issues (in shares)					5,715,000
Proceeds from Stock Options Exercised | $					$ 198,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares)					567,400
Private Placement [Member]
Stock Issued During Period, Shares, New Issues (in shares)					714,286	2,000,000
Proceeds from Issuance of Common Stock | $						$ 3,000,000
Shares Issued, Price Per Share (in dollars per share) | $ / shares						$ 1.50
Proceeds from Issuance of Convertible Preferred Stock | $						$ 7,000,000
Private Placement [Member] | Series A Convertible Preferred Stock [Member]
Stock Issued During Period, Shares, New Issues (in shares)						7,000
Shares Issued, Price Per Share (in dollars per share) | $ / shares						$ 1,000
Preferred Stock, Redemption Price Per Share (in dollars per share) | $ / shares						2.545
Private Placement [Member] | Series A Convertible Preferred Stock [Member] | Conversion Price if Common Stock Not Trade at 3.15 [Member]
Preferred Stock, Redemption Price Per Share (in dollars per share) | $ / shares						$ 1.50
April 6, 2020 Public Offering [Member]
Stock Issued During Period, Shares, New Issues (in shares)				5,420,000
Proceeds from Issuance of Common Stock, Gross | $				$ 5,100,000
Share Price (in dollars per share) | $ / shares				$ 0.95
Proceeds from Issuance of Common Stock | $				$ 4,600,000
June 30, 2020 Public Offering [Member]
Stock Issued During Period, Shares, New Issues (in shares)	6,770,000
Proceeds from Issuance of Common Stock, Gross | $	$ 14,600,000
Share Price (in dollars per share) | $ / shares	$ 2.15		$ 2.15
Proceeds from Issuance of Common Stock | $			$ 13,400,000

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Note 9 - Stockholders' Equity - Warrants (Details) - USD ($)	6 Months Ended	9 Months Ended	12 Months Ended
	Jun. 30, 2019	Sep. 30, 2020	Dec. 31, 2019	Dec. 31, 2018
Outstanding, number of shares (in shares)	1,592,775	1,074,171	1,592,775
Outstanding, weighted average exercise price (in dollars per share)	$ 2.55	$ 0.50	$ 2.55
Outstanding, weighted average remaining life (Year)	2 years 109 days	2 years 266 days	4 years 36 days	76 days
Outstanding, intrinsic value		$ 880,449	$ 956,012
Issued, number of shares (in shares)	1,749,171	6,459,000
Issued, weighted average exercise price (in dollars per share)	$ 0.50	$ 2.01
Issued, weighted average remaining life (Year)	4 years 127 days	3 years
Issued, intrinsic value	$ 560,199
Exercised, number of shares (in shares)	(57,750)	(1,133,975)
Exercised, weighted average exercise price (in dollars per share)	$ 0.50	$ 0.87
Expired or cancelled, number of shares (in shares)
Expired or cancelled, weighted average exercise price (in dollars per share)
Outstanding , number of shares (in shares)	3,284,196	6,399,196	1,074,171	1,592,775
Outstanding , weighted average exercise price (in dollars per share)	$ 1.49	$ 1.95	$ 0.50	$ 2.55

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Note 9 - Stockholders' Equity - Summary of Shares to be Issued (Details) - shares	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Shares-to-be-issued, outstanding (in shares)	2,375,762	2,470,566
Granted in current period (in shares)	363,956	1,392,460
Issued in current period (in shares)	(387,991)	(1,216,680)
Shares-to be issued outstanding (in shares)	2,351,727	2,646,346

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Note 9 - Stockholders' Equity - Assumptions Used to Value Warrants at Grant Date (Details)	Dec. 31, 2019	Sep. 30, 2019	Dec. 31, 2016
Measurement Input, Share Price [Member] | The 2016 Warrants [Member]
Warrants, measurement input		0.83
Measurement Input, Share Price [Member] | The 2016 Warrants [Member] | Minimum [Member]
Warrants, measurement input			0.36
Measurement Input, Share Price [Member] | The 2016 Warrants [Member] | Maximum [Member]
Warrants, measurement input			0.83
Measurement Input, Share Price [Member] | The 2019 Warrants [Member]
Warrants, measurement input	0.33	0.08
Measurement Input, Expected Term [Member] | The 2016 Warrants [Member]
Warrants, measurement input		0.02
Measurement Input, Expected Term [Member] | The 2016 Warrants [Member] | Minimum [Member]
Warrants, measurement input			0.25
Measurement Input, Expected Term [Member] | The 2016 Warrants [Member] | Maximum [Member]
Warrants, measurement input			0.5
Measurement Input, Expected Term [Member] | The 2019 Warrants [Member]
Warrants, measurement input	4.9	4.4
Measurement Input, Price Volatility [Member] | The 2016 Warrants [Member]
Warrants, measurement input		0.86
Measurement Input, Price Volatility [Member] | The 2016 Warrants [Member] | Minimum [Member]
Warrants, measurement input			0.86
Measurement Input, Price Volatility [Member] | The 2016 Warrants [Member] | Maximum [Member]
Warrants, measurement input			1
Measurement Input, Price Volatility [Member] | The 2019 Warrants [Member]
Warrants, measurement input	0.83	0.86
Measurement Input, Expected Dividend Rate [Member] | The 2016 Warrants [Member]
Warrants, measurement input		0	0
Measurement Input, Expected Dividend Rate [Member] | The 2019 Warrants [Member]
Warrants, measurement input	0	0
Measurement Input, Exercise Price [Member] | The 2016 Warrants [Member]
Warrants, measurement input		2.55	2.55
Measurement Input, Exercise Price [Member] | The 2019 Warrants [Member]
Warrants, measurement input	0.5	0.5
Measurement Input, Risk Free Interest Rate [Member] | The 2016 Warrants [Member]
Warrants, measurement input		0.0188
Measurement Input, Risk Free Interest Rate [Member] | The 2016 Warrants [Member] | Minimum [Member]
Warrants, measurement input			0.0188
Measurement Input, Risk Free Interest Rate [Member] | The 2016 Warrants [Member] | Maximum [Member]
Warrants, measurement input			0.0209
Measurement Input, Risk Free Interest Rate [Member] | The 2019 Warrants [Member]
Warrants, measurement input	0.023	0.0155
Measurement Input, Weighted Average of Shares Granted, Fair Value [Member] | The 2016 Warrants [Member]
Warrants, measurement input
Measurement Input, Weighted Average of Shares Granted, Fair Value [Member] | The 2019 Warrants [Member]
Warrants, measurement input	0.19	0.61
Measurement Input, Number of Shares Granted [Member] | The 2016 Warrants [Member]
Warrants, measurement input		1,512,067	1,512,067
Measurement Input, Number of Shares Granted [Member] | The 2019 Warrants [Member]
Warrants, measurement input	1,749,171	1,691,421

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Note 10 - Income Taxes (Details Textual)	9 Months Ended
	Sep. 30, 2020
Percentage of Valuation Allowance	100.00%

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Note 11 - Segment and Geographic Data (Details Textual)	9 Months Ended
	Sep. 30, 2020
Number of Reportable Segments	2

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Note 11 - Segment and Geographic Data - Summary by Reporting and Operating Segments (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Product sales, net	$ 1,246,110	$ 1,899,821	$ 3,225,170	$ 6,073,580
Operating Income (Loss)	(1,476,728)	(946,734)	(6,258,225)	(2,872,749)
Depreciation and Amortization	16,505	25,418	74,861	76,919
Income (loss) before taxes and equity in earnings of affiliates	(1,477,297)	(2,848,667)	(6,266,952)	(4,725,577)
Total assets	19,945,621		19,945,621		$ 6,556,289
Corporate, Non-Segment [Member]
Operating Income (Loss)	(855,123)	(1,036,541)	(3,928,521)	(2,927,652)
Depreciation and Amortization	15,429	19,044	60,653	57,620
Income (loss) before taxes and equity in earnings of affiliates	(853,834)	(2,937,140)	(3,931,333)	(4,777,690)
Total assets	13,576,619		13,576,619		957,238
Dental Segment [Member]
Product sales, net	1,240,110	1,884,321	3,209,370	6,042,580
Dental Segment [Member] | Operating Segments [Member]
Product sales, net	1,240,110	1,884,321	3,209,370	6,042,580
Operating Income (Loss)	191,235	644,650	(32,624)	1,766,087
Depreciation and Amortization	402	3,950	9,202	11,875
Income (loss) before taxes and equity in earnings of affiliates	190,472	645,442	(35,376)	1,765,475
Total assets	5,391,842		5,391,842		5,008,324
Medical Segment [Member]
Product sales, net	6,000	15,500	15,800	31,000
Medical Segment [Member] | Operating Segments [Member]
Product sales, net	6,000	15,500	15,800	31,000
Operating Income (Loss)	(812,840)	(554,843)	(2,297,080)	(1,711,184)
Depreciation and Amortization	674	2,424	5,006	7,424
Income (loss) before taxes and equity in earnings of affiliates	(813,935)	$ (556,969)	(2,300,243)	$ (1,713,362)
Total assets	$ 977,160		$ 977,160		$ 590,727

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Note 11 - Segment and Geographic Data - Summary of Operations by Geographic Area (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Product sales, net	$ 1,246,110	$ 1,899,821	$ 3,225,170	$ 6,073,580
Dental Segment [Member]
Product sales, net	1,240,110	1,884,321	3,209,370	6,042,580
Medical Segment [Member]
Product sales, net	6,000	15,500	15,800	31,000
Domestic [Member]
Product sales, net	408,129	896,890	1,067,133	2,721,779
Domestic [Member] | Devices [Member]
Product sales, net	34,657	199,926	35,181	409,529
Domestic [Member] | Handpieces [Member]
Product sales, net	356,566	679,621	994,057	2,250,842
Domestic [Member] | Other Products [Member]
Product sales, net	16,906	17,343	37,895	61,408
Domestic [Member] | Dental Segment [Member]
Product sales, net	408,129	896,890	1,065,133	2,710,679
Domestic [Member] | Dental Segment [Member] | Devices [Member]
Product sales, net	34,657	199,926	35,181	398,729
Domestic [Member] | Dental Segment [Member] | Handpieces [Member]
Product sales, net	356,566	679,621	992,057	2,250,542
Domestic [Member] | Dental Segment [Member] | Other Products [Member]
Product sales, net	16,906	17,343	37,895	61,408
Domestic [Member] | Medical Segment [Member]
Product sales, net			2,000	11,100
Domestic [Member] | Medical Segment [Member] | Devices [Member]
Product sales, net				10,800
Domestic [Member] | Medical Segment [Member] | Handpieces [Member]
Product sales, net			2,000	300
Domestic [Member] | Medical Segment [Member] | Other Products [Member]
Product sales, net
Rest of World [Member]
Product sales, net			2,158,037	3,251,801
Rest of World [Member] | Devices [Member]
Product sales, net	220,694	412,819	502,598	1,108,488
Rest of World [Member] | Handpieces [Member]
Product sales, net	608,000	579,765	1,624,724	2,040,250
Rest of World [Member] | Other Products [Member]
Product sales, net	9,287	10,347	30,715	103,063
Rest of World [Member] | Dental Segment [Member]
Product sales, net			2,144,237	3,231,901
Rest of World [Member] | Dental Segment [Member] | Devices [Member]
Product sales, net	220,694	412,819	494,998	1,100,488
Rest of World [Member] | Dental Segment [Member] | Handpieces [Member]
Product sales, net	602,000	564,265	1,618,524	2,028,750
Rest of World [Member] | Dental Segment [Member] | Other Products [Member]
Product sales, net	9,287	10,347	30,715	102,663
Rest of World [Member] | Medical Segment [Member]
Product sales, net			13,800	19,900
Rest of World [Member] | Medical Segment [Member] | Devices [Member]
Product sales, net			7,600	8,000
Rest of World [Member] | Medical Segment [Member] | Handpieces [Member]
Product sales, net	6,000	15,500	6,200	11,500
Rest of World [Member] | Medical Segment [Member] | Other Products [Member]
Product sales, net				400
International [Member]
Product sales, net	837,981	1,002,931
International [Member] | Dental Segment [Member]
Product sales, net	831,981	987,431
International [Member] | Medical Segment [Member]
Product sales, net	6,000	15,500
CHINA
Product sales, net				100,000
CHINA | Devices [Member]
Product sales, net
CHINA | Handpieces [Member]
Product sales, net				100,000
CHINA | Other Products [Member]
Product sales, net
CHINA | Dental Segment [Member]
Product sales, net				100,000
CHINA | Dental Segment [Member] | Devices [Member]
Product sales, net
CHINA | Dental Segment [Member] | Handpieces [Member]
Product sales, net				100,000
CHINA | Dental Segment [Member] | Other Products [Member]
Product sales, net
CHINA | Medical Segment [Member]
Product sales, net
CHINA | Medical Segment [Member] | Devices [Member]
Product sales, net
CHINA | Medical Segment [Member] | Handpieces [Member]
Product sales, net
CHINA | Medical Segment [Member] | Other Products [Member]
Product sales, net

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Note 12 - Concentrations (Details Textual) - Customer Concentration Risk [Member]	3 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2020 USD ($)	Sep. 30, 2019	Dec. 31, 2019
Revenue Benchmark [Member] | Domestic Distributor [Member]
Concentration Risk, Percentage		40.00%
Revenue Benchmark [Member] | International Distributor [Member]
Concentration Risk, Percentage			45.00%
Revenue Benchmark [Member] | One Customer [Member]
Concentration Risk, Percentage	54.00%		51.00%
Accounts Receivable [Member]
Number of Customers		2
Accounts Receivable [Member] | Domestic Distributor [Member]
Concentration Risk, Percentage				77.00%
Accounts Receivable [Member] | Two Customers [Member]
Accounts Receivable, before Allowance for Credit Loss		$ 720,000
Accounts Receivable [Member] | Milestone China [Member]
Concentration Risk, Percentage		74.00%
Accounts Receivable [Member] | Customer One [Member]
Concentration Risk, Percentage		60.00%
Accounts Receivable [Member] | Customer Two [Member]
Concentration Risk, Percentage		14.00%

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Note 13 - Related Party Transactions (Details Textual) - USD ($)		1 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended
	Apr. 29, 2020	Feb. 28, 2019	Jan. 31, 2017	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019	Jun. 30, 2014
Chief Executive Officer [Member]
Deferred Compensation Arrangement with Individual, Compensation Expense						$ 308,000		$ 380,000
Director of Clinical Affairs [Member]
Royalty Expense				$ 61,000	$ 92,000	158,000	$ 292,000
Professional Fees				39,000	39,000	117,000	117,000
Accounts Payable, Related Parties				$ 80,000		$ 80,000		390,000
Milestone China [Member]
Equity Method Investment, Ownership Percentage				40.00%		40.00%			40.00%
Manufacturing Agreement for Handpieces [Member]
Related Party Transaction, Purchases from Related Party	$ 370,260			$ 373,000	549,000	$ 1,200,000	1,100,000
Due to Related Parties, Total				365,000		365,000		$ 943,000
Consulting Services [Member]
Related Party Transaction, Expenses from Transactions with Related Party				25,000	25,000	75,000	75,000
Consulting Services [Member] | United Systems [Member]
Stock Issued During Period, Shares, Issued for Services (in shares)		285,714
Shares Issued, Price Per Share (in dollars per share)		$ 0.35
Stock Issued During Period, Value, Issued for Services		$ 100,000
Consultant [Member] | Innovest S.p.A. [Member]
Related Party Transaction, Expenses from Transactions with Related Party				$ 20,000	$ 20,000	$ 60,000	$ 60,000
Consulting Services Agreement, Term (Month)			1 year

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Note 14 - Commitments (Details Textual)		1 Months Ended			3 Months Ended	9 Months Ended
	Jan. 01, 2005	Jul. 31, 2020	Aug. 31, 2019 USD ($)	Jun. 30, 2015 USD ($) ft²	Sep. 30, 2020 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Advances on Inventory Purchases					$ 723,084	$ 723,084		$ 710,662
Operating Leases, Monthly Rent Expense				$ 12,522
Operating Lease, Right-of-Use Asset					655,870	655,870		15,977
Operating Lease, Liability, Total					645,341	645,341
Operating Lease, Liability, Current					68,934	68,934		12,072
Operating Lease, Liability, Noncurrent					576,407	576,407
Operating Lease and Finance Lease, Liability, Current								15,977
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability						43,242
Finance Lease, Liability, Total					38,527	38,527
Finance Lease, Liability, Current					7,903	7,903		3,904
Finance Lease, Liability, Noncurrent					$ 30,624	$ 30,624
Additional Percentage of Director Compensation on Sales Value Using Certain Specify Technology	2.50%
Additional Percentage of Director Compensation Sales Value Using Other Kind of Technology	5.00%
Copiers Lease Agreement [Member]
Lessee, Finance Lease, Term of Contract (Year)					5 years	5 years
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability						$ 43,242
Office Lease for Headquarter in Livingston, New Jersey [Member]
Area of Rentable Space (Square Foot) | ft²				774
Lessee, Operating Lease, Term of Contract (Year)			7 years
Lessee, Operating Lease, Electric Charge Per Square Foot			$ 2
Lessee, Operating Lease, Electric Payments, Annually			11,130
Office Lease for Headquarter in Livingston, New Jersey [Member] | Minimum [Member]
Operating Leases, Monthly Rent Expense			9,275
Office Lease for Headquarter in Livingston, New Jersey [Member] | Maximum [Member]
Operating Leases, Monthly Rent Expense			$ 10,898
Purchase Commitment for Devices [Member]
Purchase Commitment, Remaining Minimum Amount Committed					$ 515,284	515,284
Advances on Inventory Purchases					350,311	350,311
Purchase Commitment for Devices Begining in 2020 [Member]
Purchase Commitment, Remaining Minimum Amount Committed					299,000	299,000
Advances on Inventory Purchases					161,000	$ 161,000
Purchase Commitment Number Of Units			100			100
Purchase Commitment For Epidural Disposable Kits Beginning In November 2020 [Member]
Purchase Commitment, Remaining Minimum Amount Committed					30,395	$ 30,395
Advances on Inventory Purchases					$ 21,195	$ 21,195
Purchase Commitment Number Of Units		110				110

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Note 14 - Commitments - Lease Expense (Details) - USD ($)		3 Months Ended		9 Months Ended
		Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Cash paid for operating lease liabilities		$ 30,820	$ 39,555	$ 78,904	$ 118,664
Cash paid for finance lease liabilities		2,658		7,622
Right-of-use assets obtained in exchange for new operating lease liabilities (1)	[1]			(663,009)
Property and equipment obtained in exchange for new finance lease liabilities				$ (43,242)
Weighted-average remaining lease term - operating leases (Year)		6 years 182 days	146 days	6 years 182 days	146 days
Weighted-average remaining lease term- finance leases (Year)		4 years 109 days		4 years 109 days

[1] For the nine months ended September 30, 2019, the balance includes operating leases existing as of the adoption of ASC 842 on January 1, 2019.

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Note 15 - Subsequent Events (Details Textual) - USD ($)	2 Months Ended	9 Months Ended		12 Months Ended
	Nov. 16, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2021	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)		$ 1.95			$ 0.50	$ 1.49	$ 2.55
Proceeds from Warrant Exercises		$ 985,763	$ 28,875
Forecast [Member] | Consultant [Member]
Stock Issued During Period, Value, Issued for Services				$ 60,000
First Warrants Exercised Subsequent to June 30, 2020 [Member] | Subsequent Event [Member]
Stock Issued During Period Shares, Warrants Exercised (in shares)	8,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)	$ 1.20
Proceeds from Warrant Exercises	$ 9,600