Note O - Related Party Transactions

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE O -- 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

$1,850,000

 and

$1,200,000

for the

twelve

months ended

December 31, 2020

and

2019,

respectively.  As

December 31, 2020

and

December 31, 2019,

Milestone Scientific owed this manufacturer approximately

$362,000

 and

$943,000,

respectively, which is included in accounts payable, related party on the 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 F. 

Milestone China

Milestone Scientific owns a

40%

interest in Milestone China. See Note F.

Other

In

August 2016,

K. Tucker Andersen, a significant stockholder of Milestone Scientific, entered into a

three

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

$100,000

for years ended

December 

31,

2020

 and 

2019,

respectively. In

December 2019,

Milestone Scientific extended this agreement for

one

 year at a cost of

$100,000.

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

$60,000

and

$80,000

for years ended

December 31, 2019

and 

2018,

respectively. This agreement was terminated

September 30, 2020. 

As of 

December 31, 2020 

and

2019

Milestone Scientific recorded deferred compensation for Gian Trombetta  of approximately of and

$275,000,

and

$380,000,

respectively which is included accrued expenses related party.

The Company engaged Gian Domenico Trombetta, former CEO of Wand Dental Inc. as a consultant for a period of

twelve

months (beginning

October 1, 2020

and ending

September 30, 2021).

Gian Domenico Trombetta will provide International Business, Dental Segment information and business contacts to the Company 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.

The Director of Clinical Affairs' royalty fee was approximately

$267,000

 and

$403,000

 for the years ended

December 31, 2020

and

2019,

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

$156,000

for the both the years ended

December 31, 2020, 

and

2019.

 As of

December 31, 2020

and

2019

Milestone Scientific owed the Director Clinical Affairs for royalties of approximately

$127,000

and

$390,000,

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

On

March 2, 2021,

the Company entered into a Royalty Sharing Agreement with Leonard Osser, the Company's Interim Chief Executive Officer, pursuant to which Mr. Osser sold, transferred and assigned to the Company all of his rights in and to a certain patent application as to which he is a co-inventor with Mark Hochman, a consultant to the Company, and the Company agreed to pay to Mr. Osser, beginning

May 9, 2027,

half of the royalty (

2.5%

) on net sales that would otherwise be payable to Mark and Claudia Hochman under their existing Technology Sale Agreement, dated

January 1, 2005

and amended from time to time, with the Company, the Hochman's having agreed with the Company pursuant to an addendum to such Technology Sale Agreement dated

February 25, 2021

to reduce from 

five

percent (

5%

) to

two

and

one

-half percent (

2.5%

) the payments due to them under their Technology Sale Agreement on

May 9, 2027

and thereafter, with respect to dental products. The Agreement confirms an understanding of the Company, Leonard Osser and the Hochman's on sharing the

five

percent (

5%

) royalty to be paid by the Company beginning on

May 9, 2027

with respect to dental products embodying the new invention.