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, 2022

☐ 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 11, 2022, the registrant has a total of 69,795,330 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	4
	Balance Sheets as of September 30, 2022, and December 31, 2021	4
	Statements of Operations for the three and nine months ended September 30, 2022, and 2021	5
	Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2022, and 2021	6
	Statements of Cash Flows for the nine months ended September 30, 2022, and 2021	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31
	PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	34
Signatures		35

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 recovery from 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 distribution arrangements exposes us to risks of interruption of marketing efforts, 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, 2021, 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®; CathCheck®; 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, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	9,811,673		$	14,764,346
Accounts receivable, net		1,091,729			943,272
Accounts receivable, related party net		-			-
Prepaid expenses and other current assets		478,218			375,360
Inventories		1,551,842			1,541,513
Advances on contracts		1,581,483			1,309,260
Total current assets		14,514,945			18,933,751
Furniture, fixtures and equipment, net		17,401			23,713
Intangibles, net		237,636			277,619
Right of use assets		484,327			550,511
Other assets		24,150			24,150
Total assets	$	15,278,459		$	19,809,744
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,282,721		$	780,428
Accounts payable, related party		910,999			395,857
Accrued expenses and other payables		1,050,173			1,417,248
Accrued expenses, related party		333,483			414,241
Current portion of finance lease liabilities		9,153			8,545
Current portion of operating lease liabilities		88,933			81,001
Total current liabilities		3,675,462			3,097,320
Non-current portion of finance lease liabilities		13,120			20,062
Non-current portion of operating lease liabilities		408,998			476,980
Total liabilities	$	4,097,580		$	3,594,362
Commitments
Stockholders’ equity
Common stock, par value $.001; authorized 100,000,000 shares; 68,907,394 and 68,153,336 shares issued on September 30, 2022, and December 31, 2021, and 68,874,061 and 68,120,003, shares outstanding as September 30, 2022, and December 31, 2021.	$	68,907		$	68,153
Additional paid in capital		126,666,340			124,915,560
Accumulated deficit		(114,436,281	)		(107,704,274	)
Treasury stock, at cost, 33,333 shares		(911,516	)		(911,516	)
Total Milestone Scientific, Inc. stockholders' equity		11,387,450			16,367,923
Noncontrolling interest		(206,571	)		(152,541	)
Total stockholders’ equity		11,180,879			16,215,382
Total liabilities and stockholders’ equity	$	15,278,459		$	19,809,744

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)

	Three months ended September 30,						Nine months ended September 30,
	2022			2021			2022			2021
Product sales, net	$	2,215,699		$	2,108,233		$	6,564,969		$	7,458,678
Cost of products sold		762,964			747,997			2,749,160			2,926,794
Gross profit		1,452,735			1,360,236			3,815,809			4,531,884
Selling, general and administrative expenses		3,283,378			2,968,625			9,681,326			9,729,594
Research and development expenses		166,191			356,179			897,218			588,043
Depreciation and amortization expense		16,661			16,353			50,121			52,113
Total operating expenses		3,466,230			3,341,157			10,628,665			10,369,750
Loss from operations		(2,013,495	)		(1,980,921	)		(6,812,856	)		(5,837,866	)
Interest income (expense)		28,012			(4,608	)		26,819			(11,604	)
Gain on debt extinguishment-PPP		-			-			-			276,180
Loss before provision for income taxes and equity investments		(1,985,483	)		(1,985,529	)		(6,786,037	)		(5,573,290	)
Provision for income taxes		-			-			-			(333	)
Loss before equity investment		(1,985,483	)		(1,985,529	)		(6,786,037	)		(5,573,623	)
Deferred profit and divesture-equity investment (See Note 6)		-			(69,905	)		-			(164,461	)
Net loss		(1,985,483	)		(2,055,434	)		(6,786,037	)		(5,738,084	)
Net loss attributable to noncontrolling interests		(13,680	)		(12,227	)		(54,030	)		(41,540	)
Net loss attributable to Milestone Scientific Inc.	$	(1,971,803	)	$	(2,043,207	)	$	(6,732,007	)	$	(5,696,544	)
Net loss per share applicable to common stockholders—
Basic		(0.03	)		(0.03	)		(0.10	)		(0.08	)
Diluted		(0.03	)		(0.03	)		(0.10	)		(0.08	)
Weighted average shares outstanding and to be issued—
Basic		70,975,420			69,573,795			70,480,706			68,609,143
Diluted		70,975,420			69,573,795			70,480,706			68,609,143

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

5

MILESTONE SCIENTIFIC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022  

(UNAUDITED)

	Common Stock Share		Common Stock Amount		Additional Paid in Capital			Accumulated Deficit			Noncontrolling Interest			Treasury Stock			Total
Balance January 1, 2022		68,153,336	$	68,153	$	124,915,560		$	(107,704,274	)	$	(152,541	)	$	(911,516	)	$	16,215,382
Stock based compensation		-		-		305,370			-			-			-			305,370
Common stock to be issued to employees for bonuses		-		-		164,385			-			-			-			164,385
Net loss		-		-		-			(1,901,723	)		(17,502	)		-			(1,919,225	)
Balance March 31, 2022		68,153,336	$	68,153	$	125,385,315		$	(109,605,997	)	$	(170,043	)	$	(911,516	)	$	14,765,912
Stock based compensation		-		-		392,266			-			-			-			392,266
Common stock issued to employee for compensation		27,051		27		39,973												40,000
Common stock to be issued for payment of consulting services		246,028		246		345,689												345,935
Common stock issued to board of directors for services		12,879		13		12,864												12,877
Common stock issued to the board of directors for vested awards		224,850		225		(225	)											-
Common stock to be issued to employees for bonuses		147,338		147		(147	)		-			-			-			-
Net loss		-		-		-			(2,858,481	)		(22,848	)		-			(2,881,329	)
Balance June 30, 2022		68,811,482	$	68,811	$	126,175,735		$	(112,464,478	)	$	(192,891	)	$	(911,516	)	$	12,675,661
Stock based compensation						400,202												400,202
Common stock to be issued for payment of consulting services		95,912		96		90,403												90,499
Net loss									(1,971,803	)		(13,680	)					(1,985,483	)
Balance September 30, 2022		68,907,394	$	68,907	$	126,666,340		$	(114,436,281	)	$	(206,571	)	$	(911,516	)	$	11,180,879

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

6

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021

(UNAUDITED)

	Common Stock Share		Common Stock Amount		Additional Paid in Capital			Accumulated Deficit			Noncontrolling Interest			Treasury Stock			Total
Balance January 1, 2021		64,171,435	$	64,171	$	117,934,696		$	(100,885,957	)	$	(94,426	)	$	(911,516	)	$	16,106,968
Stock based compensation						113,507			-			-			-			113,507
Common stock issued to employee for compensation expensed in prior periods		7,075		7		-			-			-			-			7
Common stock to be issued for payment of consulting services expensed in prior periods		40,010		40		-			-			-			-			40
Common stock issued to board of directors for services expensed in prior periods		18,879		18		-			-			-			-			18
Common stock issued to employee for stock options exercised		435,558		436		689,754			-			-			-			690,190
Common stock to be issued to employees for bonuses		-		-		100,000			-			-			-			100,000
Common stock issued for warrants exercised		1,918,925		1,919		3,010,297			-			-			-			3,012,216
Net loss									(972,869	)		(12,988	)		-			(985,857	)
Balance March 31, 2021		66,591,882	$	66,591	$	121,848,254		$	(101,858,826	)	$	(107,414	)	$	(911,516	)	$	19,037,089
Stock based compensation		-		-		193,824			-			-			-			193,824
Common stock issued to employee for compensation		4,202		4		14,996			-			-			-			15,000
Common stock to be issued for payment of consulting services		96,018		94		262,589			-			-			-			262,683
Common stock issued to board of directors for services		277,767		280		617,887			-			-			-			618,167
Common stock issued for warrants exercised		86,000		86		138,114			-			-			-			138,200
Net loss									(2,680,468	)		(16,325	)		-			(2,696,793	)
Balance June 30, 2021		67,055,869	$	67,055	$	123,075,664		$	(104,539,294	)	$	(123,739	)	$	(911,516	)	$	17,568,170
Stock based compensation		-		-		191,946			-			-			-			191,946
Common stock issued to employee for compensation		6,122		6		14,994			-			-			-			15,000
Common stock to be issued for payment of consulting services		96,694		97		227,748			-			-			-			227,845
Common stock issued to employee for stock option exercise		49,689		50		80,462			-			-			-			80,512
Common stock issued to employee for bonus expense in prior periods		402,490		402		(402	)		-			-			-			-
Net loss									(2,043,207	)		(12,227	)		-			(2,055,434	)
Balance September 30, 2021		67,610,864	$	67,610	$	123,590,412		$	(106,582,501	)	$	(135,966	)	$	(911,516	)	$	16,028,039

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

7

MILESTONE SCIENTIFIC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED

(UNAUDITED)

	September 30, 2022			September 30, 2021
Cash flows from operating activities:
Net loss	$	(6,786,037	)	$	(5,738,084	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		10,139			23,076
Amortization of intangibles		39,982			34,060
Stock based compensation		1,097,838			499,276
Inventory Reserve		430,245			-
Employees paid in stock		217,262			748,658
Expense paid in stock		436,434			490,614
Bad debt expense		100,000			-
Amortization of right-of-use asset		59,698			59,984
Deferred profit and divesture-equity investment (See Note 6)		-			164,461
Gain on debt extinguishment-PPP		-			(276,180	)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable		(248,457	)		112,549
(Increase) decrease in inventories		(440,574	)		743,647
(Increase) in advances on contracts		(272,223	)		(1,095,328	)
(Increase) in prepaid expenses and other current assets		(102,858	)		(98,501	)
Increase in accounts payable		502,292			260,905
Increase in accounts payable, related party		515,142			35,113
(Decrease) increase in accrued expenses		(367,074	)		510,790
Decrease in accrued expenses, related party		(80,758)			(51,253	)
Decrease operating lease liability		(53,411	)		(52,812	)
Net cash used in operating activities	$	(4,942,360	)	$	(3,629,025	)
Cash flows from investing activities:
Purchase of furniture, fixtures, and equipment		(3,827	)		(19,486	)
Net cash used in investing activities	$	(3,827	)	$	(19,486	)
Cash flows from financing activities:
Payments finance lease obligations		(6,486	)		(5,779	)
Proceeds from exercise of warrants		-			3,150,416
Common stock issued to employee for option exercised		-			770,702
Net cash (used in) provided by financing activities	$	(6,486	)	$	3,915,339
Net (decrease) increase in cash and cash equivalents		(4,952,673	)		266,828
Cash and cash equivalents at beginning of period		14,764,346			14,223,917
Cash and cash equivalents at end of period	$	9,811,673		$	14,490,745

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,” “us,” “our,” “we,” the “Company” or “Milestone” refer to Milestone Scientific Inc., and its consolidated subsidiaries, Wand Dental, Inc., Milestone Medical, Inc. and Milestone Education LLC (all described below), 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 ®; CathCheckTM; the Milestone logo ®; SafetyWand®; STA Single Tooth Anesthesia System®; and The Wand ®. 

Milestone Scientific was incorporated in the State of Delaware in August 1989. Milestone Scientific has developed a proprietary, computer-controlled anesthetic delivery device, using The Wand®, a single use disposable handpiece. The device is marketed in dentistry under the trademark CompuDent®, and STA Single Tooth Anesthesia System® and is suitable for all dental procedures that require local anesthetic. The dental devices are sold in the United States, Canada and in 60 other countries. Certain medical devices have obtained CE mark approval and can be marketed and sold in most European countries. 

In June 2017, Milestone Scientific received 510(k) marketing clearance from the U.S. Food and Drug Administration (FDA) on the CompuFlo® Epidural Computer Controlled Anesthesia System (“Epidural”). We are in the process of meeting with medical facilities and device distributors within the United States, Middle East and Europe. 

In May 2022, the Company initiated a Corrective Action Preventative Action (CAPA) investigation of the Epidural Disposable Kit, Part # 6100-01, lot HC 51, the scope of the voluntary market withdrawal needed to be expanded to include Part # 6100-03, lot HC 50. A new non-conformance was initiated, and Lot HC 50 was added to the scope of the CAPA initiated above. The investigation via the CAPA identified that there is an issue with the id adaptors used in both lot’s HC 51 and HC 50. However, the health hazard evaluation shows that there is no risk to the patient or the user, thus management has determined there are no potential impacts to patients or users. Lot’s HC 51 and HC 50 are worth approximately $22,000 and $10,000 respectively. Management has determined that no other lots were affected.

In May 2022, the Company was notified that Wand STA handpieces, reference # STA—5050-2725, lot B210113 were packaged incorrectly. The Company initiated a Corrective Action Preventative Action (CAPA) investigation to determine the root cause and implement corrective actions. The Health Hazard Evaluation (HHE) was completed and showed that there is no risk to the patient or the user due to this discrepancy, thus management has determined there are no potential impacts to patients or users. However, to provide the highest quality products to the market, Milestone Scientific decided to initiate a voluntary market withdrawal on May 13, 2022. Lot B210113 is worth approximately $25,000. 

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 unaudited condensed consolidated financial statements are issued. As of September 30, 2022, the Company had an accumulated deficit of $114.4 million and has incurred a net loss of approximately $2 million and $6.8 million for the three and nine months ended September 30, 2022, respectively. Management believes that the Company will have sufficient cash reserves to meet its anticipated obligations for at least the next twelve months from the filing date of this report. 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, and a reduction in operating expenses. However, the Company’s continued operations will depend on its ability to raise additional capital through various potential sources until it achieves profitability, if ever. Management is actively pursuing financing or other strategic plans but can provide no assurances that such financing or other strategic plans will be available on acceptable terms, or at all.

To improve the Company’s cash position, management implemented a cost restructuring program to reduce the cash burn rate. This program included a reduction of the direct medical sales organization, and additional cost savings have been identified in other functional areas. The results of this program generated a cash burn rate for the three months ended September 30, 2022 of approximately $1.1million which is lower than the comparative previous quarter.

9

In addition to its employees, the Company relies on (i) distributors, agents, and third-party logistics providers in connection with product sales and distribution and (ii) raw material and component suppliers in the U.S., Europe, and China. If the Company, or any of these entities encounter any disruptions to its or their respective operations or facilities, or if the Company or any of these third-party partners were to shut down for any reason, including by fire, natural disaster, such as a hurricane, tornado or severe storm, power outage, systems failure, labor dispute, pandemic or other public health crises, or other unforeseen disruption, then the Company or they may be prevented or delayed from effectively operating its or their business, respectively.

The coronavirus (COVID-19) adversely impacted the Company's operations, our distributors and suppliers in recent years. In spite of the reopening of dental offices, hospitals, and pain clinics throughout the country and the rest of the world, revenues for the three and nine months ended September 30, 2022, and 2021 were adversely affected in particular for the medical business. However, any business interruptions, resulting from COVID-19, or new variant, could significantly disrupt our operations further and could have a material adverse impact on our business in the future.  

In addition, it is uncertain as to what effect the continuing spread of COVID-19 will have on the commercialization efforts of our CompuFlo Epidural and CathCheck systems. Such future developments could have a material adverse effect on the Company financial results and its ability to conduct business as expected.

Sanctions imposed by the United States and other western democracies, against Russia because of Ukraine conflict, and any expansion of the conflict, is likely to have unpredictable and wide-ranging effects on the domestic and global economy and financial markets, which could have an adverse effect on our business and results of operations. The conflict has already caused market volatility, a sharp increase in certain commodity prices, such as wheat and oil, and an increasing number and frequency of cybersecurity threats. So far, we have experienced a decrease in international sales to Ukraine and halted all sales to Russia, as a direct impact from the conflict. We will continue to monitor the situation carefully and, if necessary, take action to protect our business, operations and financial condition.

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), and Milestone Medical (majority owned).  All significant, intra-entity transactions and balances have been eliminated in the 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 condensed consolidated 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 consolidated financial statements and notes thereto for the year ended December 31, 2021, included in Milestone Scientific's Annual Report on Form 10-K

3.  Use of Estimates

The preparation of the unaudited condensed consolidated 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 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, stock compensation expense, and valuation allowances on deferred tax assets. Actual results could differ from those estimates.

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4.  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, 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. 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 sale 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

The Company's 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

The Company operates in two operating segments: dental and medical. Therefore, results of the Company operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting. See Note 10 for revenues by geographical market, based on the customer’s location, and product category for the three and nine months ended September 30, 2022, and 2021.

5.  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. 

If Milestone Scientific determines that it has operating power and the obligation to absorb losses or receive benefits, Milestone Scientific consolidates the VIE as the primary beneficiary. Milestone Scientific’s involvement constitutes power that is most significant to the entity when it has unconstrained decision-making ability over key operational functions within the entity. Milestone Scientific has completed the VIE analysis relating to Milestone China and Anhui Maishida Medical Technology, Co. Ltd. (“Anhui”).

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Milestone Scientific has determined that due to the loss of equity investment in Anhui, the Company no longer has significant influence of Anhui and therefore Anhui is not a variable interest entity. 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 of Milestone China who has 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. Accordingly, Milestone China has not been consolidated into the financial statements of Milestone Scientific and is accounted for under the equity method. See Note 6.

6.  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. As of September 30, 2022 and December 31, 2021, Milestone Scientific had approximately $9.7 million and $13.9 million, respectively, of investments with short term maturities classified as cash equivalents.  At times, such cash, may be more than the Federal Deposit Insurance Corporation insurance limit.  

7.  Accounts Receivable

Milestone Scientific sells a significant amount of its products on credit terms to its major distributors. Milestone Scientific estimates losses from the ability or 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, 2022 and December 31, 2021, accounts receivable and accounts receivable, related party was recorded, net of allowance for doubtful accounts of $110,000 and $10,000, respectively.

8.  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.

9.  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 unaudited 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 provision for income tax 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.

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10.  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.

11.  Research and Development

Research and development costs, which consist principally of new product development costs payable to third parties, are expensed 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.

12.  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, 2022 and December 31, 2021, we had no uncertain tax positions that required recognition in the unaudited condensed consolidated financial statements. Milestone Scientific's policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the unaudited condensed Consolidated Statements of Operations. No interest and penalties are present for periods open. Tax returns for the 2018, 2019 and 2020 years are subject to audit by federal and state jurisdictions. The 2021 tax returns were filed subsequent to September 30, 2022.

13.  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 common shares of 70,975,420 and 69,573,795 for the three months ended September 30, 2022 and 2021 respectively. 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 common shares of 70,480,706 and 68,609,143 for the nine months ended September 30, 2022 and 2021 respectively. 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. The Company also includes shares to be issued to employees in the calculation of basic earnings per share because the shares to be issued settle a compensation obligation in a fixed number of shares.

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Since Milestone Scientific had net losses in the three and nine months ended September 30, 2022 and 2021, the assumed effects of the exercise of potentially dilutive outstanding stock options, unissued restricted stock awards (“RSA”) and warrants, were not included in the calculation as their effect would have been anti-dilutive. Such outstanding options, RSA and warrants totaled 8,135,704 and 7,674,239 for the nine months ended on September 30, 2022 and 2021, respectively.

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). The Company 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 Company 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, 2022 and December 31, 2021, the Company did not have any assets or liabilities that were measured at fair value on a recurring basis.

14. Stock-Based Compensation 
 

Milestone Scientific accounts for stock-based compensation under ASC Topic 718, Share-Based Payment. ASC Topic 718 requires all share-based payments to employees, non-employees, directors, and officers, including grants of employee stock options, to be recognized in the unaudited condensed consolidated statements of operations over the service period, as an operating expense, based on the grant-date fair values. 

15.  Recent Accounting Pronouncements

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. The adoption of this standard did not have an impact on the Company's condensed consolidated financial statement.

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 did not have an impact on the Company's condensed consolidated financial statement.

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which amends the guidance on measuring credit losses for certain financial assets measured at amortized cost, including trade receivables. The FASB has subsequently issued several updates to the standard, providing additional guidance on certain topics covered by the standard. This update requires entities to recognize an allowance for credit losses using a forward-looking expected loss impairment model, taking into consideration historical experience, current conditions, and supportable forecasts that impact collectability.

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In November 2019, the FASB issued ASU 2019-10, Financial Instruments - Credit Losses (Topic, 326), Derivatives and hedging (Topic 815), and Leases (Topic 842): Effective dates, which deferred the effective date of ASU 2016-13 for the Company. As a result of ASU 2019-10, ASU 2016-13 is effective for all entities with fiscal years beginning after December 15, 2022, including interim periods. The adoption of this update is not expected to have a material impact on the Company's condensed consolidated financial statements

NOTE 4 — INVENTORIES

Inventories consist of the following:

	September 30, 2022		December 31, 2021
Dental finished goods, net	$	900,396	$	342,465
Medical finished goods, net		488,786		1,119,709
Component parts and other materials		162,660		79,339
Total inventories	$	1,551,842	$	1,541,513

The Company maintains an allowance for doubtful accounts on slow moving Medical finished goods of approximately $880,000 and $450,000 as of September 30, 2022 and December 31, 2021, respectively.

NOTE 5 — ADVANCES ON CONTRACTS

The advances on contracts represent funding of future STA Single Tooth Anesthesia System inventory purchases, epidural instruments, and epidural replacements parts. The balance of the advances as of September 30, 2022 and December 31, 2021, is approximately $1.6 million and $1.3 million, 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 40% ownership interest. Milestone China owns approximately 75% of Milestone Beijing Medical Equipment Company, Ltd (“Milestone Beijing”). At the time, Milestone Beijing had primary responsibility for the sales, marketing, and distribution of the Company’s dental products in China. Milestone Scientific recorded its investment in Milestone China under the equity method of accounting. 

In first quarter of 2020, Milestone China and certain manufacturing/marketing affiliates entered into a reorganization agreement (the “Transaction”) pursuant to which Milestone China was to merge into an affiliated manufacturing company, Anhui Maishida Medical Technology, Co. Ltd. (“Anhui”), with Anhui as the surviving entity and to have complete responsibility for sales, marketing, and distribution for the Company’s dental products in China. After completion of the Transaction, Milestone Scientific was expected to have an approximate 28.4% direct ownership in Anhui. Due to the COVID-19 pandemic, the regulatory approval of the planned Transaction was delayed while applicable government offices were closed in China and Hong Kong. Until the completion of the transaction Milestone Scientific's 28.4% in Anhui was held by Milestone China.

On November 23, 2021, management of Milestone Scientific became aware that on October 8, 2021, without approval from Milestone Scientific, (i) Milestone China entered into an Equity Transfer Agreement whereby Milestone China’s 28.4% equity stake in Anhui was transferred to Lidong Zhang, the CEO of Milestone China and Anhui, in exchange for RMB 2,840 million (approximately $440,351) of which no amounts have been or are expected to be received, see below, and (ii) Anhui held a shareholders’ meeting at which the Equity Transfer Agreement was approved by the shareholders of Anhui, eliminating Milestone China’s equity interest in Anhui and Milestone Scientific’s indirect equity interest in Anhui. Based on a review of the minutes of the Anhui shareholders’ meeting, Milestone China was not listed as a shareholder in such meeting due to the executed Equity Transfer Agreement between Lidong Zhang and Milestone China.

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Though management believes that this conveyance by Milestone China to Lidong Zhang is outside of the laws of Hong Kong and/or China, as may be applicable, at this juncture Milestone Scientific has no ownership in Anhui and Milestone China has no assets or operations. After considering taking action to assert our rights in the matter, and based on the acknowledgement that such course of action is not without its procedural and substantive challenges in Hong Kong and/or China and, importantly, in view of Michelle Zhang dba Solee Science & Technology USA (“Solee”) (see below), a company located in New Jersey, then becoming the independent distributor for Milestone China and its subsidiaries, and due to the good working relationship then developing between Milestone Scientific and Solee and to the reduction of Milestone Scientific’s credit exposure to a Chinese entity, management is not pursuing any legal action at this time to recover our equity interest. Given the significant deterioration of the economy in China, caused by in large part the actions of the Chinese central government in dealing with COVID-19, the crash of the real estate market and the moves against independent companies, the Company does not believe it is prudent at this time to continue to pursue its investigation of any options it may have regarding its Chinese distributor, and therefore, in order to preserve cash the Company is for the time being suspending its investigation. 

At this time, Milestone Scientific has not received any consideration, does not know if any of such consideration promised to Milestone China for its interest in Anhui has been paid and, if paid, whether it can recover its share of such consideration. Unless circumstances change, Milestone Scientific does not expect it will receive any of the consideration received by Milestone China for its assets without pursuing legal action. As a result, Milestone Scientific has not recorded a gain or receivable related to the transfer of Anhui. As of September 30, 2022 and December 31, 2021, the investment in Milestone China was zero.

Related Party Transactions 

Milestone China Distribution Agreement

Milestone China had been 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.

Beginning in mid- November 2021, Milestone Scientific entered into discussions with Michelle Zhang dba Solee Science & Technology USA (“Solee”), a company located in New Jersey, to become Milestone Scientific’s independent distributor for China, replacing its former distributor Milestone China and its subsidiaries. On November 22, 2021, Wand Dental, Inc., a United States subsidiary of Milestone Scientific, entered into a Buy and Sell Agreement with Solee, pursuant to which Milestone Scientific granted Solee the right to sell Milestone Scientific’s STA instruments, associated handpieces, and spare parts in China to Anhui. For the three months ended September 30, 2022, Milestone Scientific shipped no instruments or handpieces to Solee. For the nine months ended September 30, 2022, Milestone Scientific shipped handpieces to Solee for sale to Anhui and recognized revenue of approximately $370,000. As of September 30, 2022, approximately $100,000 was included in account receivable related party, however management has recorded a reserve against this receivable. For the three and nine months ended September 30, 2021, Milestone Scientific shipped instruments, and handpieces to Solee for the sale to Anhui and recognized revenue of $360,000 and $1.4 million, respectively. As of December 31, 2021, the Company had approximately $89,000 of deposits from Solee for future shipment of goods included in accrued expenses on the accompanying condensed consolidated balance sheet. As of September 30, 2022, the Company had no deposits from Solee for future shipment of goods included in accrued expenses on the accompanying condensed consolidated balance sheet.  

Gross Profit Deferral

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

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As of September 30, 2022 and December 31, 2021, the Company had no deferred profit in the unaudited condensed consolidated balance sheets. For the three and nine months ended September 30, 2022, Milestone Scientific did not record any loss on equity investment in relation to gross profit on product sold to Milestone China, Anhui, and Solee. For the three and nine months ended September 30, 2021, Milestone Scientific recorded loss on equity investment of approximately $70,000 and $164,000, respectively, in relation to gross profit previously deferred on product sold to Milestone China, Anhui, and Solee, recorded as deferred profit and divesture-equity investment on the accompanying unaudited condensed consolidated statement of operations. 

NOTE 7 — PATENTS    

	September 30, 2022
	Cost		Accumulated Amortization			Net
Patents-foundation intellectual property		1,377,863		(1,140,227	)		237,636
Total		1,377,863		(1,140,227	)		237,636

	December 31, 2021
	Cost		Accumulated Amortization			Net
Patents-foundation intellectual property		1,377,863		(1,100,244	)		277,619
Total		1,377,863		(1,100,244	)		277,619

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, 2022, respectively. Amortization expense was approximately $11,000 and $34,000 for the three and nine months ended September 30, 2021, respectively. The annual amortization expense expected to be recorded for existing intangibles assets for the years 2022 through 2026 and thereafter, is approximately $13,000, $52,000, $34,000, $28,000, and $111,000, respectively.   

NOTE 8— STOCKHOLDERS’ EQUITY

Warrants

The following table summarizes information about shares issuable under warrants outstanding as of September 30, 2022

	Warrant shares outstanding		Weighted Average exercise price		Weighted Average remaining life		Intrinsic value
Outstanding at January 1, 2022		4,268,221		2.18		1.50		1,187,546
Issued		-		-		-		-
Exercised		-		-		-		-
Outstanding and exercisable at September 30, 2022		4,268,221		2.18		0.75		91,226

Shares to Be Issued

As of September 30, 2022 and 2021, there were 1,852,789 and 1,861,639 shares, respectively, to be issued whose issuance has been deferred by certain employees of Milestone Scientific.  As of September 30, 2022 and 2021, there were 174,364 and 144,024 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.

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The following table summarizes information about shares to be issued on:

	September 30, 2022			September 30, 2021
Shares-to-be-issued, outstanding January 1, 2022, and 2021, respectively		2,066,343			2,428,329
Granted in current period		108,148			33,238
Issued in current period		(147,338	)		(455,906	)
Shares-to be issued outstanding September 30, 2022, and 2021, respectively		2,027,153			2,005,661

Stock Options Plans

The Milestone Scientific Inc. 2020 Equity Compensation Plan, as amended and restated (the "2020 Plan"), provides for awards of restricted common, stock restricted stock units, options to purchase and other awards, up to a maximum 4,000,000 shares of common stock, and expires in June 2031. Options may be granted to employees, directors, and consultants of Milestone Scientific for the purchase of shares of common stock at a price not less than the fair market value of common stock on the date of grant. 

Milestone Scientific recognizes stock compensation expense over the requisite service period. For three and nine months ended September 30, 2022, Milestone Scientific recognized approximately $232,998 and $1.1 million of total employee stock compensation cost, respectively, recorded in general and administrative expenses on the statement of operations. For three and nine months ended September 30, 2021, Milestone Scientific recognized approximately $165,000 and $451,000 of total employee stock compensation cost, respectively, recorded in general and administrative expenses on the statement of operations.

As of September 30, 2022, there was approximately $2.7 million of total unrecognized compensation cost related to non-vested options. Milestone Scientific expects to recognize these costs over a weighted average period of 2.75 years. 

A summary of option activity for employees under the plans and changes during the nine months ended September 30, 2022 is presented below:        

	Number of Options		Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding January 1, 2022		2,843,693		2.39		7.69		49,246
Granted during 2022		216,296		1.52		2.23		-
Exercised during 2022		-		-		-		-
Forfeited or expired during 2022		-		-		-		-
Options outstanding September 30, 2022		3,059,989		2.29		6.63		-
Exercisable, September 30, 2022		994,914		2.18		5.28		-

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A summary of option activity for non-employees under the plans and changes during the nine months ended September 30, 2022 is presented below:        

	Number of Options		Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding January 1, 2022		83,330		1.85		3.33		49,748
Granted during 2022		-		-		-		-
Exercised during 2022		-		-		-		-
Options outstanding September 30, 2022		83,330		1.85		2.58		4,333
Exercisable, September 30, 2022		69,441		1.68		2.37		4,333

For the three and nine months ended  September 30, 2022, Milestone Scientific recognized approximately $5,000 and $15,000 expense related to non-employee options, respectively. For the three and nine months ended  September 30, 2021, Milestone Scientific recognized approximately $5,000 and $20,000 expense related to non-employee options, respectively.

The information below summarizes the restricted stock award activity for the nine months September 30, 2022.

	Number of Shares			Weighted Average Grant-Date Fair Value per Award
Non-vested as January 1, 2022		96,557			2.33
Granted		975,148			0.86
Vested		(224,850	)
Cancelled		(122,693	)
Non-vested as September 30, 2022		724,162			1.11

As of September 30, 2022, there were 49,616 restricted shares granted and deferred under the terms of an employment agreement with the Territory Manager of Milestone Scientific, Inc. Such shares will be issued to him (or her) completion of 2 years of employment. For the three and nine months ended September 30, 2022, the Company recognized negative stock compensation of approximately $10,400 and $37,500, respectively, due to termination of non-vested employees in the current period. For the three and nine months ended September 30 2021, the Company recognized stock compensation expense of approximately $16,667 and $37,500, respectively. As of September 30, 2022, the total unrecognized stock compensation expense was $46,875 related to non-vested restricted stock awards, which the Company expects to recognize over an estimated weighted average period of 1.28 years.

As of September 30, 2022, the Company entered into restricted stock agreements with members of the Board of Directors of the Company. The Company granted 899,300 restricted stock awards with a fair market value of $0.82 per share. Such restricted stock vests as follows: 25% on the grant date, and 25% quarterly, on the first day of the following months:  October 2022, January 2023, and April 2023. These awards vest immediately upon a change of control as defined in the agreements. For the three and nine months ended September 30, 2022, the Company recognized approximately $167,000, and $381,000, respectively for restricted stock expenses recorded in general and administrative expenses on the statement of operation. As of September 30, 2022, the total unrecognized stock compensation expense was $356,000 related to non-vested restricted stock awards with the members of the Board of Directors, which the Company expects to recognize over an estimated weighted average period of 0.5 years.

NOTE 9 — 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. 

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NOTE 10 — 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 bases. 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:

	Three months ended September 30,				Nine months ended September 30,
Sales
Net Sales:	2022		2021		2022		2021
Dental	$	2,206,499	$	2,076,233	$	6,509,619	$	7,334,628
Medical		9,200		32,000		55,350		124,050
Total net sales	$	2,215,699	$	2,108,233	$	6,564,969	$	7,458,678

Operating Income (Loss):	2022			2021			2022			2021
Dental	$	308,913		$	193,252		$	826,175		$	1,844,083
Medical		(937,468	)		(937,876	)		(3,788,842	)		(2,968,596	)
Corporate		(1,384,940	)		(1,236,297	)		(3,850,189	)		(4,713,353	)
Total operating loss	$	(2,013,495	)	$	(1,980,921	)	$	(6,812,856	)	$	(5,837,866	)

Depreciation and Amortization:	2022		2021		2022		2021
Dental	$	951	$	892	$	2,737	$	3,458
Medical		1,019		1,241		3,056		6,257
Corporate		14,691		14,220		44,328		42,398
Total depreciation and amortization	$	16,661	$	16,353	$	50,121	$	52,113

Income (loss) before taxes and equity in earnings of affiliates:	2022			2021			2022			2021
Dental	$	307,699		$	191,864		$	822,270		$	1,915,148
Medical		(938,963	)		(939,202	)		(3,793,236	)		(2,972,462	)
Corporate		(1,354,219	)		(1,238,191	)		(3,815,071	)		(4,515,976	)
Total loss before taxes and equity in earnings of affiliate	$	(1,985,483	)	$	(1,985,529	)	$	(6,786,037	)	$	(5,573,290	)

Total Assets	September 30, 2022		December 31, 2021
Dental	$	4,083,657	$	6,163,169
Medical		863,470		1,373,511
Corporate		10,331,332		12,273,064
Total assets	$	15,278,459	$	19,809,744

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The following table presents information about our operations by geographic area for the three and nine months ended September 30, 2022 and 2021.  Net sales by geographic area are based on the respective locations of our subsidiaries:

	Three months ended September 30, 2022						Three months ended September 30, 2021
Domestic: US	Dental		Medical		Grand Total		Dental		Medical		Grand Total
Instruments	$	164,341	$	7,500	$	171,841	$	36,480	$	-	$	36,480
Handpieces		678,473		1,700		680,173		721,149		11,500		732,649
Accessories		24,304		-		24,304		21,253		-		21,253
Grand Total	$	867,118	$	9,200	$	876,318	$	778,882	$	11,500	$	790,382
International: Rest of World
Instruments	$	436,069	$	-	$	436,069	$	253,063	$	4,500	$	257,563
Handpieces		881,616		-		881,616		674,133		16,000		690,133
Accessories		21,696		-		21,696		9,300				9,300
Grand Total	$	1,339,381	$	-	$	1,339,381	$	936,496	$	20,500	$	956,996
International: China
Instruments	$	-	$	-	$	-	$	-	$	-	$	-
Handpieces		-		-		-		360,855		-		360,855
Accessories		-		-		-				-		-
Grand Total	$	-	$	-	$	-	$	360,855	$	-	$	360,855
Total Product Sales	$	2,206,499	$	9,200	$	2,215,699	$	2,076,233	$	32,000	$	2,108,233

	Nine months ended September 30, 2022						Nine months ended September 30, 2021
Domestic: US	Dental		Medical		Grand Total		Dental		Medical		Grand Total
Instruments	$	442,336	$	7,500	$	449,836	$	391,250	$	-	$	391,250
Handpieces		2,275,865		25,750		2,301,615		2,319,049		19,650		2,338,699
Accessories		73,210		2,100		75,310		58,134		-		58,134
Grand Total	$	2,791,411	$	35,350	$	2,826,761	$	2,768,433	$	19,650	$	2,788,083
International: Rest of World
Instruments	$	1,050,443	$	-	$	1,050,443	$	792,903	$	62,500	$	855,403
Handpieces		2,265,367		20,000		2,285,367		2,337,692		41,900		2,379,592
Accessories		42,434		-		42,434		42,409		-		42,409
Grand Total	$	3,358,244	$	20,000	$	3,378,244	$	3,173,004	$	104,400	$	3,277,404
International: China
Instruments	$	-	$	-	$	-	$	228,000	$	-	$	228,000
Handpieces		359,964		-		359,964		1,165,191		-		1,165,191
Accessories		-		-		-		-		-		-
Grand Total		359,964		-	$	359,964	$	1,393,191	$	-	$	1,393,191
Total Product Sales	$	6,509,619	$	55,350	$	6,564,969	$	7,334,628	$	124,050	$	7,458,678

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NOTE 11 -- CONCENTRATIONS

Milestone Scientific has informal arrangements with third-party U.S. manufacturers of the STA, CompuDent and CompuMed 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, 2022 and 2021.  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 months ended September 30, 2022, an aggregate of approximately 11% and 32% of the Company’s net product sales were from two distributors. For the nine months ended September 30, 2022, an aggregate of approximately 36% of the Company’s net product sales were from one distributor. For the three months ended September 30, 2021, an aggregate of approximately 17% and  34% of the Company’s net product sales were from two distributor. For the nine months ended September 30, 2021, an aggregate of approximately 19% and 34% of the Company’s net product sales were from two distributors. 

For the nine months ended September 30, 2022, we had the four distributors that accounted for 13%, 15%, 18% and 36% of the aggregate accounts receivable.  As of December 31, 2021, we had three distributors that accounted for 13%, 28%, and 29% of the aggregate accounts receivable. 

NOTE 12 -- 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 manufacturer of its handpieces, pursuant to which it manufactures products under specific purchase orders, but without minimum purchase commitments. Purchases from this manufacturer were approximately $658,000 and $2.3 million, respectively for three and nine months ended September 30, 2022. Purchases from this manufacturer were approximately $417,000 and $1.3 million, respectively for three and nine months ended September 30, 2021. 

As of September 30, 2022 and December 31, 2021, Milestone Scientific owed this manufacturer approximately $904,000 and $548,000, respectively, which approximately $904,000 and $395,000 is included in accounts payable, related party, respectively, and $0 and approximately $153,000 is included in accrued expense, related party, respectively, on the unaudited condensed consolidated balance sheets. 

Milestone China

See Note 6 of the notes to the unaudited condensed consolidated financial statements.
 
Other

K. Tucker Andersen, a significant stockholder of Milestone Scientific provides financial and business strategic services to the Company. Expenses recognized were $25,000 and $75,000 for each of the three and nine months ended September 30, 2022 and 2021, respectively.

The Company engaged Mr. Trombetta as a consultant for a period of twelve months (beginning October 1, 2020, and ending September 30, 2021), to provide international business dental information and business contacts to the Company and provide consulting services for new international business and dental segments. For the three and nine months ended September 30, 2021, the Company expensed $15,000 and $45,000, respectively, for services rendered by Mr. Trombetta. Mr. Trombetta received shares of the Company’s common stock in lieu of the cash under this agreement. This agreement was terminated September 30, 2021, and therefore, no expenses were incurred for services rendered by Mr. Trombetta for the three and nine months ended September 30, 2022. 

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The Director of Clinical Affairs’ royalty fee was approximately $108,000 and $322,000 for three and nine months ended September 30, 2022, respectively. The Director of Clinical Affairs’ royalty fee was approximately $74,000 and $322,000 for three and nine months ended September 30, 2021, respectively. Additionally, Milestone Scientific expensed consulting fees to the Director of Clinical Affairs of $39,000 and $115,000 for each of the three and nine months ended September 30, 2022, and 2021, respectively. As of September 30, 2022, and December 31, 2021, Milestone Scientific owed the Director Clinical Affairs for royalties of approximately $108,000 and $123,000, respectively, which is included in accrued expense, related party, in the condensed consolidated balance sheet.

On March 2, 2021, Milestone Scientific entered into a Royalty Sharing Agreement with Leonard Osser, the Company’s then 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 Dr. Hochman, 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 Dr. Hochman and his wife under their Technology Sale Agreement 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 5% to 2.5% the payments due to them on May 9, 2027 and thereafter, with respect to dental products.

Pursuant to a Succession Agreement dated April 6, 2021 between Mr. Osser and the Company: (i) the Employment Agreement dated as of July 10, 2017 between Mr. Osser and the Company, pursuant to which upon Mr. Osser stepping down as Interim Chief Executive Officer of the Company, the Company agreed to employ him as Managing Director, China Operations of the Company (the “China Operations Agreement”), and (ii) the Consulting Agreement dated as of July 10, 2017 (the “Consulting Agreement”) between the Company and U.S. Asian Consulting Group, LLC, a company of which Mr. Osser is a principal, the compensation under the China Operations Agreement was modified to reduce the overall compensation by $100,000 to $200,000, split equally between a cash amount and an amount in shares, and the compensation under the Consulting Agreement is increased by $100,000 to $200,000, equally split between a cash amount and an amount in shares, which shares were formerly payable under the China Operations Agreement.  Compensation under the China Operations Agreement and the Consulting Agreement are payable for 9.5 years from May 19, 2021.

The Company recorded expense of $50,000 and $150,000 which is included SG&A expenses and accrued expense, related party, respectively, related to the Managing Director, China Operations for three and nine months ended September 30, 2022, respectively. The Company recorded expense of $50,000 and $75,000 which is included SG&A expenses and accrued expense, related party, respectively, related to the Managing Director, China Operations for the three and nine months ended September 30, 2021, respectively. The Company recorded expense of $50,000 and $150,000 which includes consultant expenses and accrued expenses, related party, respectively, related to the US Asian Consulting Group, LLC for the three and nine months ended September 30, 2022. The Company recorded expense of $50,000 and $75,000 which is included consultant expenses and accrued expense, related party, respectively, related to the US Asian Consulting Group, LLC for each of the three and nine months ended September 30, 2021.  As of September 30, 2022, and December 31, 2021, the Company owed Mr. Osser approximately $166,000 and $0, respectively, which is included accrued expense, related party in the condensed consolidated balance sheet.     

NOTE 13 — COMMITMENTS

(1)  Contract Manufacturing Agreement 

Milestone Scientific has informal arrangements with third-party manufacturers of the STA, CompuDent® devices, pursuant to which they manufacture these products under specific purchase orders but without any long-term contract or minimum purchase commitment. The Company has an open purchase commitment for the delivery of 2,410 STA CompuDent® instruments. 

As of September 30, 2022, the purchase order commitment was approximately $1.9 million and advances of approximately $1.5 million are reported in advances on contracts in the condensed consolidated balance sheet. As of September 30, 2022, the Company made advanced payments of approximately $1.3 million for a purchase commitment for STA instruments, sound chips for future instruments of approximately $191,000 and advanced to customers for handpiece replacement of approximately $23,000 from market withdrawal in May 2022 are reported in advances on contracts in the condensed consolidated balance sheet. As of December 31, 2021, the purchase order commitment was approximately $2.6 million and advances of approximately $1.3 million are reported in advances on contracts in the condensed consolidated balance sheet. 

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As of September 30, 2022, the company also had advances on an open purchase order for long lead items for a future purchase order for the manufacturing of Epidural instrument of approximately $41,000 and advanced to customers for handpiece replacement of $34,000 from market withdrawal in  May 2022 a reported in advances on contracts in the condensed consolidated balance sheet. The advance is classified as current based on the estimated annual usage of the underlying inventory. As of December 31, 2021, the company also has advances on an open purchase order for long lead items for a future purchase order for the manufacturing of Epidural instrument of approximately $34,000 reported in advances on contracts in the condensed consolidated balance sheet. The advance is classified as current based on the estimated annual usage of the underlying inventory.

(2)  Leases

Operating Leases

In August 2019, the Company made the decision to not renew 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 commenced 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 more than new base year amounts, which are accounted for as variable lease expenses. 

As of September 30, 2022, total operating lease and finance right-of-use assets were $484,327 and total operating lease and finance liabilities were $497,931, of which $88,933 and $408,998 were classified as current and non-current, respectively. As of September 30, 2022, total finance lease liabilities were $22,273 of which $9,153 and $13,120 were classified as current and non-current, respectively. As of December 31, 2021, total operating lease and finance right-of-use assets were $550,511 and total operating lease and finance liabilities were $577,981, of which $81,001 and $476,980 were classified as current and non-current, respectively. As of December 31, 2021, total finance lease liabilities were $28,607, of which $8,545 and $20,062 were classified as current and non-current, respectively. 

The components of lease expense were as follows:

	Three months ended				Nine months ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Cash paid for operating lease liabilities		31,999		31,882		95,996		95,645
Cash paid for finance lease liabilities		2,685		2,685		8,055		8,055
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
								0.00	%
Weighted Average Remaining Lease Term
Finance leases (years)					2.3		5.5
Operating leases (years)					4.5		3.3

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(3) Other Commitments

On March 2, 2021, Milestone Scientific entered into a Royalty Sharing Agreement with Leonard Osser, the Company’s  then that would otherwise be payable to Mr. Hochman and his wife under the Technology Sale Agreement referred to above, the Hochman's having agreed with the Company pursuant to an addendum to such Technology Sale Agreement dated February 25, 2021 to reduce from 5% to 2.5% the payments due to them on May 9, 2027 and thereafter, with respect to dental products.

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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, 2021, which was filed with the Securities and Exchange Commission, or SEC on March 31, 2022. 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

Milestone Scientific is a biomedical technology research and development company that patents, designs, develops and commercializes innovative diagnostic and therapeutic injection technologies and devices for medical, dental and cosmetic use. Since our inception, we have engaged in pioneering proprietary, innovative, computer-controlled injection technologies, and solutions for the medical and dental markets. We believe our technologies are proven and well established. Our common stock was initially listed on the NYSE American on June 1, 2015, and trades under the symbol “MLSS”.

We have focused our resources on redefining the worldwide standard of care for injection techniques by making the experience more comfortable for the patient by reducing the anxiety and stress of receiving injections from the healthcare provider. Our computer-controlled injection devices make injections precise, efficient, and virtually painless.

Milestone Scientific has developed a proprietary, computer-controlled anesthetic delivery device, using The Wand®, a single use disposable handpiece. The device is marketed in dentistry under the trademark CompuDent®, and STA Single Tooth Anesthesia System® and is suitable for all dental procedures that require local anesthetic. Our proprietary DPS Dynamic Pressure Sensing technology® is our technology platform that advances the development of next-generation devices. It regulates flow rate and monitoring pressure from the tip of the needle, through platform extensions for local anesthesia for subcutaneous drug delivery, used in various dental and medical injections. It has specific medical applications for cosmetic botulinum toxin injections, epidural space identification in regional anesthesia procedures and intra-articular joint injections.

Milestone Scientific remains focused on advancing efforts to achieve the following three 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 device, Milestone Scientific is transitioning from a research and development organization to a commercially focused medical device company; and

● Expanding our global footprint of our CompuFlo Epidural and CathCheck System by utilizing a direct field sales force and partnering with distribution companies worldwide.

Because of combining the ability to regulate the flow rate and monitor pressure at the tip of the needle, Milestone Scientific developed the industry’s first solution for painlessly administering an intra-ligamentary injection, i.e., “single-tooth anesthesia” which could be used as the only injection necessary for achieving dental anesthesia, foregoing the need to administer traditional injections such as a nerve branch block. In addition to single-tooth anesthesia, the STA System can effectively perform all the traditional injections that dentists routinely give but can provide them virtually pain free and with numerous clinical advantages. This device, which also utilizes a disposable handpiece, is currently marketed by Milestone Scientific as the Wand STA® System. 

Milestone Scientific believes its dental devices have set a new standard of care for dental injections. Our dental devices have been used to administer tens of millions of injections worldwide. Each of our devices has a related single use disposable handpiece, leading to a continuing revenue stream following sale of the device. At present, we sell disposable handpieces unique to our legacy product (the Wand and CompuDent) to users who have not upgraded to our current dental product, the Wand STA System. 

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Building on the success of our proprietary, core technology platform for dental injections, and desiring to pursue other growth opportunities, we have recently begun to expand the uses and applications of our proprietary, patented technologies to achieve greater operational efficiencies, enhanced patient safety and therapeutic adherence, patient satisfaction, and improved quality of care across a broad range of medical specialties. In June 2017, we received FDA regulatory clearance to sell the CompuFlo Epidural Computer Controlled Anesthesia System in the United States for certain medical applications. We intend to continue to expand the uses and applications of our DPS Dynamic Pressure Sensing technology.

We believe that we and our technology solutions are widely recognized by key opinion leaders (i.e., academics, anesthesiologists and practicing dentists whose opinions are widely respected), industry experts and medical and dental practitioners as a leader in the emerging, computer-controlled injection industry.

Wand STA Dental Market

Since its market introduction in early 2007, the Wand STA System 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”) for distribution of The Wand® STA® Computer Assisted Anesthesia System, including its disposable, single-use handpiece, and certain related products (the “Wand STA System”), in the United States and Canada. In June 2016, that agreement was replaced with an exclusive distribution arrangement for our Wand STA system for the United States and Canada with Henry Schein. In December 2020, Henry Schein’s exclusive distribution arrangement with respect to the Wand STA System became a non-exclusive distribution arrangement for the United States and Canada. On December 31, 2022, such non-exclusive distribution arrangement will terminate, subject to certain post-termination rights and obligations of the parties, all in accordance with such agreement.

In January 2021, the Company began a process of signing non-exclusive dental distribution arrangements with dental distributors in specific geographical locations in the United States and Canada. To date there are twelve new non-exclusive dental distributors engaged in the United States and Canada. The goal is to add not only additional non-exclusive distributors in the United States, but as well as exploring other co-operation opportunities with Dental Service Organization, education institutions, dental schools and entities in specific dental market segments. To date there are two of such channel partners in the United States.

The goal of changing our marketing plan from a sole exclusive distributor in the USA and Canada, to a large number of non-exclusive distributors, is to increase placement of our Wand STA System and thus the expansion of our dental disposables usage.

On the global front, we have granted exclusive marketing and distribution rights for the Wand STA System 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 countries of Denmark, Sweden, Norway, and Iceland. Additionally, the Company is in the process of evaluating current international distributors and adding new distributors globally as required based on the economics of the region.

Sanctions imposed by the United States and other western democracies, because of the Ukrainian-Russian conflict, and any expansion thereof, is likely to have unpredictable and wide-ranging effects on the domestic and global economy and financial markets, which could have an adverse effect on our business and results of operations. Already the conflict has caused market volatility, a sharp increase in certain commodity prices, such as wheat and oil, and an increasing number and frequency of cybersecurity threats. So far, we have experienced a decrease in international sales to Ukraine and halted all sales to Russia, a direct impact from the conflict. We will continue to monitor the situation carefully and, if necessary, take action to protect our business, operations, and financial condition.  

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. 

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 intended to file a new 510(k) application for the device in 2019. However, due to financing constraints, a new 510(k) application was not filed in 2019. The Company has decided not to proceed with securing FDA approval for the intra-articular instrument at the present time.

27

In April 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 now 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.

In March 2022, the Company was notified by a territory manager that Epidural Disposable Kit, Part # 6100-01, lot HC 51 potentially had an issue. The Company opened an investigation and decided to initiate a voluntary market withdrawal for the Epidural Disposable Kit, Part # 6100-01, lot HC 51. Management has determined that there are no potential impacts to patients or users.

On April 11, 2022, the Company announced that it has commenced sales of its CompuFlo Epidural and CathCheck Verification System disposables to a leading northeast medical center in the U.S. This approval follows an extensive trial and evaluation, which validates the safety and efficacy of the technology. As a teaching hospital, the Company's tools provide residents, fellows, and seasoned physicians greater accuracy through real-time verification of epidural needle placement, as well as subsequent monitoring of catheter placement.

On May 27, 2022, the Company announced on that it has commenced sales of its CompuFlo Epidural instrument disposables at a leading veterinary and academic institution following a successful research study and evaluation. The veterinary institution has initially begun using the CompuFlo Epidural instrument for maxillary nerve block procedures in horses with plans to expand into epidural procedures. The CompuFlo Epidural instrument can provide fellow veterinarians and students greater accuracy through real-time verification of needle location when performing a maxillary nerve block.

In addition, the recent receipt of chronology-Specific CPT Code for the Company's technology by American Medical Association marks an important milestone, that could increase the potential number of anesthesia pain management clinics adopting the CompuFlo instrument. A CPT code expands the potential for reimbursement of epidural procedures in pain management utilizing the CompuFlo Epidural System., thereby helping accelerate the commercial roll-out of CompuFlo in the U.S.

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, 2022						Three months ended September 30, 2021
Domestic: US	Dental		Medical		Grand Total		Dental		Medical		Grand Total
Instruments	$	164,341	$	7,500	$	171,841	$	36,480		-	$	36,480
Handpieces		678,473		1,700		680,173		721,149		11,500		732,649
Accessories		24,304		-		24,304		21,253		-		21,253
Grand Total	$	867,118	$	9,200	$	876,318	$	778,882	$	11,500	$	790,382
International: Rest of World
Instruments	$	436,069	$	-	$	436,069	$	253,063	$	4,500	$	257,563
Handpieces		881,616		-		881,616		674,133		16,000		690,133
Accessories		21,696		-		21,696		9,300		-		9,300
Grand Total	$	1,339,381	$	-	$	1,339,381	$	936,496	$	20,500	$	956,996
International: China
Instruments	$	-	$	-	$	-		-		-	$	-
Handpieces		-		-		-		360,855		-		360,855
Accessories		-		-		-		-		-		-
Grand Total	$	-	$	-	$	-	$	360,855	$	-	$	360,855
Total Product Sales	$	2,206,499	$	9,200	$	2,215,699	$	2,076,233	$	32,000	$	2,108,233

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	Nine months ended September 30, 2022						Nine months ended September 30, 2021
Domestic: US	Dental		Medical		Grand Total		Dental		Medical		Grand Total
Instruments	$	442,336	$	7,500	$	449,836	$	391,250		-	$	391,250
Handpieces		2,275,865		25,750		2,301,615		2,319,049		19,650		2,338,699
Accessories		73,210		2,100		75,310		58,134		-		58,134
Grand Total	$	2,791,411	$	35,350	$	2,826,761	$	2,768,433	$	19,650	$	2,788,083
International: Rest of World
Instruments	$	1,050,443	$	-	$	1,050,443	$	792,903	$	62,500	$	855,403
Handpieces		2,265,367		20,000		2,285,367		2,337,692		41,900		2,379,592
Accessories		42,434		-		42,434		42,409		-		42,409
Grand Total	$	3,358,244	$	20,000	$	3,378,244	$	3,173,004	$	104,400	$	3,277,404
International: China
Instruments	$	-	$	-	$	-	$	228,000		-	$	228,000
Handpieces		359,964		-		359,964		1,165,191		-		1,165,191
Accessories		-		-		-		-		-		-
Grand Total		359,964		-	$	359,964	$	1,393,191	$	-	$	1,393,191
Total Product Sales	$	6,509,619	$	55,350	$	6,564,969	$	7,334,628	$	124,050	$	7,458,678

Current Product Platform

See Note 1, “Organization and Business”.

Results of Operations

The following table sets forth the consolidated results of for the three and nine months ended September 30, 2022, and 2021, respectively. The trends suggested by this table may not be indicative of future operating results:  

	Three months ended September 30, 2022			Three months ended September 30, 2021
Operating results:
Product sales, net	$	2,215,699		$	2,108,233
Cost of products sold		762,964			747,997
Gross profit		1,452,735			1,360,236
Operating expenses:
Selling, general and administrative expenses		3,283,378			2,968,625
Research and development expenses		166,191			356,179
Depreciation and amortization expense		16,661			16,353
Total operating expenses		3,466,230			3,341,157
Loss from operations		(2,013,495	)		(1,980,921	)
Other income, and interest expense net		28,012			(74,513	)
Gain on debt extinguishment-PPP		-			-
Net loss		(1,985,483	)		(2,055,434	)
Net loss attributable to noncontrolling interests		(13,680	)		(12,227	)
Net loss attributable to Milestone Scientific Inc.	$	(1,971,803	)	$	(2,043,207	)

29

	Nine months ended September 30, 2022			Nine months ended September 30, 2021
Operating results:
Product sales, net	$	6,564,969		$	7,458,678
Cost of products sold		2,749,160			2,926,794
Gross profit		3,815,809			4,531,884
Operating expenses:
Selling, general and administrative expenses		9,681,326			9,729,594
Research and development expenses		897,218			588,043
Depreciation and amortization expense		50,121			52,113
Total operating expenses		10,628,665			10,369,750
Loss from operations		(6,812,856	)		(5,837,866	)
Other income, and interest expense net		26,819			(176,398	)
Gain on debt extinguishment-PPP		-			276,180
Net loss		(6,786,037	)		(5,738,084	)
Net loss attributable to noncontrolling interests		(54,030	)		(41,540	)
Net loss attributable to Milestone Scientific Inc.	(6,732,007		)	$	(5,696,544	)

Cash flow:	September 30, 2022			September 30, 2021
Net cash used in operating activities	$	(4,942,360	)	$	(3,629,025	)
Net cash used in investing activities	$	(3,827	)	$	(19,486	)
Net cash (used in) provided by financing activities	$	(6,486	)	$	3,915,339

Three months ended September 30, 2022, compared to three months ended September 30, 2021

Net sales for 2022 and 2021 were as follows:

	2022		2021		Change
Dental	$	2,206,499	$	2,076,233	$	130,266
Medical		9,200		32,000	$	(22,800	)
Total sales, net	$	2,215,699	$	2,108,233	$	107,466

Consolidated revenue for the three months ended September 30, 2022 and 2021 were approximately $2.2 million and $2.1 million, respectively. Dental revenue increased approximately $130,000 for the three months ended September 30, 2022, as compared to the three months ended September 30, 2021. For the three months ended September 30, 2022, dental domestic revenue increased approximately $88,000, and dental international revenue increased approximately $403,000 compared to September 30, 2021. The increase in domestic and international is related to the Company expanding its parentship with new distributors. For the three months ended September 30, 2022, the Company recorded no revenue from China as compared to approximately $360,000 for the three months ended September 30, 2021. The reduction in shipments to Milestone China is due to Milestone China continuing cash flow issues. Medical revenue decreased approximately $23,000 for the three months ended September 30, 2022, as compared to the three months ending September 30, 2021.

Gross Profit for 2022 and 2021 were as follows: 

	2022		2021		Change
Dental	$	1,446,111	$	1,343,027	$	103,084
Medical		6,624		17,209	$	(10,585	)
Total gross profit	$	1,452,735	$	1,360,236	$	92,499

Consolidated gross profit for the three months ended September 30, 2022 increased approximately $92,000 or 7%, from the three months ended September 30, 2021. The increased is related to higher cost of parts, and freight expenses on the disposables.

30

Selling, general and administrative expenses 2022 and 2021 were as follows:

	2022		2021		Change
Dental	$	979,911	$	818,577	$	161,334
Medical		933,218		927,971		5,247
Corporate		1,370,249		1,222,077		148,172
Total selling, general and administrative expenses	$	3,283,378	$	2,968,625	$	314,753

Consolidated selling, general and administrative expenses for the three months ended September 30, 2022 and 2021, were approximately $3.3 million, and $3.0 million respectively. The increase of approximately $315,000 reflects changes in several areas. During the three months ended September 30, 2022, warehousing and also expenses associated with quality assurance in connection with ISO certification and digitizing parts of our quality control process increased approximately $125,000, and professional fees increased approximately $370,000 due to certain 510(k) work for a new indication for our product, upgrades to automate our quality control procedures and additional digitizing of parts of our quality control process. Other selling, general and administrative and royalties' expenses increased approximately $122,000 for three months ended September 30, 2022. The Company included in other selling general and administrative $100,000 relating to an allowance taken against the accounts receivable related party during the three months ended September 30, 2022.Employee salaries and benefits expenses decreased approximately $191,000 during the three months ended September 30, 2022 compared to the same period in 2021. Such reduction was due, in part, to reduced directors’ fees, accrued bonus, employee recruiting fees, and medical insurance for the three months ended September 30, 2022. The Company reduced employee travel and marketing expense for three months ended September 30, 2022 by approximately $111,000. 

Research and Development for 2022 and 2021 were as follows: 

	2022		2021		Change
Dental	$	156,336	$	330,306	$	(173,970	)
Medical		9,855		25,873		(16,018	)
Corporate		-		-		-
Total research and development	$	166,191	$	356,179	$	(189,988	)

Consolidated research and development expenses for the three months ended September 30, 2022 and 2021, were approximately $166,000 and $356,000, respectively. The decrease of approximately $190,000 is related to the Company delaying enhancements to the STA Single Tooth Anesthesia System product line.

Profit (Loss) from Operations for 2022 and 2021 were as follows: 

	2022			2021			Change
Dental	$	308,913		$	193,252		$	115,661
Medical		(937,468	)		(937,876	)		408
Corporate		(1,384,940	)		(1,236,297	)		(148,643	)
Total loss from operations	$	(2,013,495	)	$	(1,980,921	)	$	(32,574	)

The loss from operations for each of the three months ended September 30, 2022, and 2021 was approximately $2.0 million, respectively. As noted above, higher cost for parts, and freight expense, along with additional professional fees for quality control impacted the loss for operations. The Company 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, and a reduction in operating expenses.

Nine months ended September 30, 2022, compared to nine months ended September 30, 2021

Net sales for 2022 and 2021 were as follows:

	2022		2021		Change
Dental	$	6,509,619	$	7,334,628	$	(825,009	)
Medical		55,350		124,050	$	(68,700	)
Total sales, net	$	6,564,969	$	7,458,678	$	(893,709	)

31

Consolidated revenue for the nine months ended, September 30, 2022, and 2021 were approximately $6.6 million and $7.5 million, respectively. Dental revenue decreased approximately $825,000 for the nine months ending September 30, 2022, as compared to the nine-month ended September 30, 2021. For the nine months ended, September 30,2022, dental domestic revenue increased approximately $23,000, and dental international revenue increased approximately $185,000 compared to September 30, 2021. For the nine months ended September 30, 2022, the Company revenue to China decreased approximately $1.0 million compared to September 30, 2021which most significantly caused our overall decrease in revenues. The reduction in shipments to Milestone China is due to Milestone China continuing cash flow issues. Medical revenue decreased approximately $69,000 for the nine months ending September 30, 2022, as compared to the nine months ended September 30, 2021.  

Gross Profit for 2022 and 2021 were as follows: 

	2022			2021		Change
Dental	$	4,207,376		$	4,460,935	$	(253,559	)
Medical		(391,567	)		70,949	$	(462,516	)
Total gross profit	$	3,815,809		$	4,531,884	$	(716,075	)

Consolidated gross profit for each of the nine months ended September 30, 2022 and 2021 decreased approximately $716,000 or 16%.  The decrease is related less shipments to Milestone China, due to Milestone China continuing cash flow issues, and increased in higher cost of parts, and freight expenses on the disposables. The Company recorded an allowance of approximately $430,000 on slow moving Medical finished goods, and reduction in dental revenue during the nine months ended September 30, 2022.

Selling, general and administrative expenses 2022 and 2021 were as follows:

	2022		2021		Change
Dental	$	2,529,352	$	2,098,687	$	430,665
Medical		3,346,113		2,959,927		386,186
Corporate		3,805,861		4,670,980		(865,119	)
Total selling, general and administrative expenses	$	9,681,326	$	9,729,594	$	(48,268	)

Consolidated selling, general and administrative expenses for the nine months ended September 30, 2022, and 2021, were approximately $9.7 million, and $9.7 million respectively. The decrease of approximately $48,000 is categorized in several areas. Employee salaries, and benefits expenses decreased approximately $426,000 during the nine months ended September 30, 2022 compared to the same period in 2021. The Company reduced director fees, bonuses, employee recruiting fees, and medical insurance for the nine months ended September 30, 2022.The Company reduced marketing expense for nine months ended September 30, 2022, by approximately $11,000. The Company increased employee travel and for nine months ended September 30, 2022, by approximately $192,000. During the nine months ended September 30, 2022 warehousing, and quality control, increased associated with quality assurance in connection with ISO certification and digitizing parts of our quality control increased approximately $235,000, professional fees, increased approximately $122,000 due to the additional professional services quality control required in the compliance and regulations. Other selling, general and administrative and royalties' expenses decreased approximately $290,000 for nine months ended September 30,2022. The Company included in other selling general and administrative $100,000 relating to an allowance taken against the accounts receivable related party during the nine months ended September 30, 2022.

Research and Development for 2022 and 2021 were as follows: 

	2022		2021		Change
Dental	$	849,112	$	514,682	$	334,430
Medical		48,106		73,361		(25,255	)
Corporate		-		-		-
Total research and development	$	897,218	$	588,043	$	309,175

Consolidated research and development expenses for the nine months ended, September 30, 2022, and 2021, were approximately $897,000 and $588,000, respectively. The increase of approximately $309,000 is related to the Company exploring possible enhancements to the STA Single Tooth Anesthesia System product line.

32

Profit (Loss) from Operations for 2022 and 2021 were as follows: 

	2022			2021			Change
Dental	$	826,175		$	1,844,083		$	(1,017,908	)
Medical		(3,788,842	)		(2,968,596	)		(820,246	)
Corporate		(3,850,189	)		(4,713,353	)		863,164
Total loss from operations	$	(6,812,856	)	$	(5,837,866	)	$	(974,990	)

The loss from operations was approximately $6.8 million and $5.8 million for the nine months ending September 30, 2022 and 2021, respectively. As noted above, higher cost for parts, and freight expense, along with additional professional fees for quality control impacted the loss for operations. Although, the Company kept the SG&A expenses down, the Company increased research and development by exploring other possible enhancements for STA. The Company reported less shipments to Milestone China, due to Milestone China continuing cash flow issues. The Company 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, and a reduction in operating expenses.

Liquidity and Capital Resources

On September 30, 2022, Milestone Scientific had cash and cash equivalents of approximately $9.8 million and working capital of approximately $10.8 million versus working capital of $15.8 million on December 31, 2021. For the nine months ended September 30, 2022 and 2021, we had cash flows used in operating activities of approximately $4.9 million and $3.6 million, respectively. 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 unaudited condensed consolidated financial statements are issued. As of September 30, the Company had an accumulated deficit of $114.4 million and has incurred a net loss of approximately $2 million and $6.7 million for the three and nine months ended September 30, 2022, respectively. Management believes that the Company will have sufficient cash reserves to meet its anticipated obligations for at least the next twelve months from the filing date of this report. 

To improve the Company’s cash position, management implemented a cost restructuring program to reduce the cash burn rate. This program included a reduction of the direct medical sales organization by half, and additional cost savings have been identified in other functional areas. The results of this program generated a cash burn rate for the three months ended September 30, 2022 of approximately $1.1million which is lower than burn rate for previously quarters in 2022.

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

Evaluation of Disclosure Controls and Procedures

Milestone Scientific’s Chief Executive Officer has 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 Chief Executive Officer has concluded that the disclosure controls and procedures as of September 30, 2022 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 Chief Executive Officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in Milestone Scientific’s internal control over financial reporting that occurred during the quarter ended September 30, 2022 that have materially affected, or that are reasonably likely to materially affect, Milestone Scientific’s internal controls over financial reporting.

33

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 has and may continue to adversely affect the Company’s business. 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 nine months ended September 30, 2022, while economic and health conditions in the United States and across most of the globe have continued to change rapidly due to the Omicron variant since the end of 2021. 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 effectiveness of the ongoing vaccination process, 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. From time to time, we have had employees working in the office, depending on the local positivity rate of COVID-19. As a result of the Omicron variant, beginning in December 2021, most of our office and management personnel were working remotely. As of March 15, 2022, the employees returned in full to the office. 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. 

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

The COVID-19 pandemic affected the Company’s operations during the nine months ended September 30, 2022 and may continue to do so for an indeterminable period 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, 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- and nine-month periods ended September 30, 2022, are not necessarily indicative of the results to be expected for the full fiscal year. Management cannot predict the continued 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 on elective medical procedures. 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.

34

Changes in our distribution arrangements exposes us to risks of interruption of marketing efforts.

In January 2021, in connection with the change in our relationship with Henry Schein, with which we had an exclusive distribution arrangement with respect to our dental products in the United States and Canada, the Company began a process of signing non-exclusive dental distribution arrangements with dental distributors in specific geographical locations in the United States and Canada. The goal of changing our marketing plan from a sole exclusive distributor in the USA and Canada, to a large number of non-exclusive distributors, may not be seamless or uninterrupted

Our business and operations would suffer in the event of cybersecurity or other system failures.  

Despite the implementation of security measures, our internal computer systems and those of any third parties with which we partner are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. While we have not experienced any cybersecurity or system failure, accident or breach to date, if an event were to occur, it could result in a material disruption of our operations, substantial costs to rectify or correct the failure, if possible, and potentially violation of HIPAA and other privacy laws applicable to our operations. If any disruption or security breach resulted in a loss of or damage to our data or applications or inappropriate disclosure of confidential or protected information, we could incur liability, further development of our products could be delayed, and our operations could be disrupted, any of which could severely harm our business and financial condition.

Issues with product quality could have a material adverse effect upon our business, subject us to regulatory actions and cause a loss of customer confidence in us or our products.

In general, our success depends upon the quality of our products.  Quality management plays an essential role in meeting customer requirements, preventing defects, improving our products and services, and assuring the safety and efficacy of our products.  Our future success depends on our ability to maintain and continuously improve our quality management program.  A quality or safety issue may result in adverse inspection reports, warning letters, product recalls or seizures, monetary sanctions, injunctions to halt manufacture and distribution of products, civil or criminal sanctions, costly litigation, refusal of a government to grant approvals and licenses, restrictions on operations or withdrawal of existing approvals and licenses.  An inability to address a quality or safety issue in an effective and timely manner may also cause negative publicity, a loss of customer confidence in us or our current or future products, which may result in the loss of sales and difficulty in successfully launching new products.

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

Not applicable.

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*
32.1	Section 1350 Certifications-Chief Executive Officer**
101.INS	Inline XBRL Instance Document*
101.SCH	Inline XBRL Taxonomy Extension Schema Document*
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document*
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document*
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document*
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* 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/ Arjan Haverhals
	Arjan Haverhals
	Chief Executive Officer
	Principal Financial Officer
Date: November 14, 2022

37

EX-31.1

Exhibit 31.1

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

I, Arjan Haverhals, 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 14, 2022

/s/ Arjan Haverhals

Arjan Haverhals

Chief Executive Officer

Principal Financial 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, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Arjan Haverhals  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 14, 2022

/s/ Arjan Haverhals

Arjan Haverhals

Chief Executive Officer

Principal Financial 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.

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	Sep. 30, 2022	Nov. 11, 2022
Document Information [Line Items]
Entity Central Index Key	0000855683
Entity Registrant Name	MILESTONE SCIENTIFIC INC.
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Current Fiscal Year End Date	--12-31
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Document Fiscal Year Focus	2022
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Entity File Number	001-14053
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-3545623
Entity Address, Address Line One	425 Eagle Rock Avenue Suite 403
Entity Address, City or Town	Roseland
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Entity Address, Postal Zip Code	07068
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Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 9,811,673	$ 14,764,346
Accounts receivable, net	1,091,729	943,272
Accounts receivable, related party net	0
Prepaid expenses and other current assets	478,218	375,360
Inventories	1,551,842	1,541,513
Advances on contracts	1,581,483	1,309,260
Total current assets	14,514,945	18,933,751
Furniture, fixtures and equipment, net	17,401	23,713
Intangibles, net	237,636	277,619
Right of use assets	484,327	550,511
Other assets	24,150	24,150
Total assets	15,278,459	19,809,744
Current liabilities:
Accounts payable	1,282,721	780,428
Accounts payable, related party	910,999	395,857
Accrued expenses and other payables	1,050,173	1,417,248
Accrued expenses, related party	333,483	414,241
Current portion of finance lease liabilities	9,153	8,545
Current portion of operating lease liabilities	88,933	81,001
Total current liabilities	3,675,462	3,097,320
Non-current portion of finance lease liabilities	13,120	20,062
Non-current portion of operating lease liabilities	408,998	476,980
Total liabilities	4,097,580	3,594,362
Commitments
Stockholders’ equity
Common stock, par value $.001; authorized 100,000,000 shares; 68,907,394 and 68,153,336 shares issued on September 30, 2022, and December 31, 2021, and 68,874,061 and 68,120,003, shares outstanding as September 30, 2022, and December 31, 2021.	68,907	68,153
Additional paid in capital	126,666,340	124,915,560
Accumulated deficit	(114,436,281)	(107,704,274)
Treasury stock, at cost, 33,333 shares	(911,516)	(911,516)
Total Milestone Scientific, Inc. stockholders' equity	11,387,450	16,367,923
Noncontrolling interest	(206,571)	(152,541)
Total stockholders’ equity	11,180,879	16,215,382
Total liabilities and stockholders’ equity	$ 15,278,459	$ 19,809,744

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Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	68,907,394	68,153,336
Common stock, shares outstanding (in shares)	68,874,061	68,120,003
Treasury stock, at cost, shares (in shares)	33,333	33,333

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Product sales, net	$ 2,215,699	$ 2,108,233	$ 6,564,969	$ 7,458,678
Cost of products sold	762,964	747,997	2,749,160	2,926,794
Gross profit	1,452,735	1,360,236	3,815,809	4,531,884
Selling, general and administrative expenses	3,283,378	2,968,625	9,681,326	9,729,594
Research and development expenses	166,191	356,179	897,218	588,043
Depreciation and amortization expense	16,661	16,353	50,121	52,113
Total operating expenses	3,466,230	3,341,157	10,628,665	10,369,750
Loss from operations	(2,013,495)	(1,980,921)	(6,812,856)	(5,837,866)
Interest income (expense)	28,012	(4,608)	26,819	(11,604)
Gain on debt extinguishment-PPP	0	0	0	276,180
Loss before provision for income taxes and equity investments	(1,985,483)	(1,985,529)	(6,786,037)	(5,573,290)
Provision for income taxes	0	0	0	(333)
Loss before equity investment	(1,985,483)	(1,985,529)	(6,786,037)	(5,573,623)
Deferred profit and divesture-equity investment (See Note 6)	0	(69,905)	0	(164,461)
Net loss	(1,985,483)	(2,055,434)	(6,786,037)	(5,738,084)
Net loss attributable to noncontrolling interests	(13,680)	(12,227)	(54,030)	(41,540)
Net loss attributable to Milestone Scientific Inc.	$ (1,971,803)	$ (2,043,207)	$ (6,732,007)	$ (5,696,544)
Net loss per share applicable to common stockholders—
Basic (in dollars per share)	$ (0.03)	$ (0.03)	$ (0.10)	$ (0.08)
Diluted (in dollars per share)	$ (0.03)	$ (0.03)	$ (0.10)	$ (0.08)
Weighted average shares outstanding and to be issued—
Basic (in shares)	70,975,420	69,573,795	70,480,706	68,609,143
Diluted (in shares)	70,975,420	69,573,795	70,480,706	68,609,143

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Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Consultant [Member] Common Stock [Member]	Consultant [Member] Additional Paid-in Capital [Member]	Consultant [Member] Retained Earnings [Member]	Consultant [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]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Noncontrolling Interest [Member]	Treasury Stock [Member]	Total
Balance (in shares) at Dec. 31, 2020									64,171,435
Balance at Dec. 31, 2020									$ 64,171	$ 117,934,696	$ (100,885,957)	$ (94,426)	$ (911,516)	$ 16,106,968
Stock based compensation										113,507				113,507
Common stock to be issued to employees for bonuses										100,000				100,000
Net loss											(972,869)	(12,988)		(985,857)
Common stock issued for compensation (in shares)					18,879				7,075
Common stock issued for compensation									$ 7					7
Common stock to issued for services					$ 18			$ 18
Common stock to be issued for payment of consulting services expensed in prior periods (in shares)	40,010
Common stock to be issued for payment of consulting services expensed in prior periods	$ 40			$ 40
Common stock issued to employee for stock options exercised (in shares)									435,558
Common stock issued to employee for stock options exercised									$ 436	689,754				690,190
Common stock issued for warrants exercised (in shares)									1,918,925
Common stock issued for warrants exercised									$ 1,919	3,010,297				3,012,216
Common stock issued for warrants exercised (in shares)									1,918,925
Common stock issued for warrants exercised									$ 1,919	3,010,297				3,012,216
Balance (in shares) at Mar. 31, 2021									66,591,882
Balance at Mar. 31, 2021									$ 66,591	121,848,254	(101,858,826)	(107,414)	(911,516)	19,037,089
Balance (in shares) at Dec. 31, 2020									64,171,435
Balance at Dec. 31, 2020									$ 64,171	117,934,696	(100,885,957)	(94,426)	(911,516)	16,106,968
Net loss														(5,738,084)
Balance (in shares) at Sep. 30, 2021									67,610,864
Balance at Sep. 30, 2021									$ 67,610	123,590,412	(106,582,501)	(135,966)	(911,516)	16,028,039
Balance (in shares) at Mar. 31, 2021									66,591,882
Balance at Mar. 31, 2021									$ 66,591	121,848,254	(101,858,826)	(107,414)	(911,516)	19,037,089
Stock based compensation										193,824				193,824
Net loss											(2,680,468)	(16,325)		(2,696,793)
Common stock issued for compensation (in shares)									4,202
Common stock issued for compensation									$ 4	14,996				15,000
Common stock to be issued for payment of consulting services (in shares)	96,018				277,767
Common stock to be issued for payment of consulting services	$ 94	$ 262,589		$ 262,683
Common stock to issued for services					$ 280	$ 617,887		618,167
Common stock issued for warrants exercised (in shares)									86,000
Common stock issued for warrants exercised									$ 86	138,114				138,200
Common stock issued for warrants exercised (in shares)									86,000
Common stock issued for warrants exercised									$ 86	138,114				138,200
Balance (in shares) at Jun. 30, 2021									67,055,869
Balance at Jun. 30, 2021									$ 67,055	123,075,664	(104,539,294)	(123,739)	(911,516)	17,568,170
Stock based compensation									0	191,946	0	0	0	191,946
Common stock to be issued to employees for bonuses									402	(402)	0	0	0	0
Net loss											(2,043,207)	(12,227)	0	(2,055,434)
Common stock issued for compensation (in shares)									6,122
Common stock issued for compensation									$ 6	14,994	0	0	0	15,000
Common stock to be issued for payment of consulting services (in shares)									96,694
Common stock to be issued for payment of consulting services									$ 97	227,748	0	0	0	227,845
Common stock to be issued to employees for bonuses (in shares)									402,490
Common stock issued to employee for stock options exercised (in shares)									49,689
Common stock issued to employee for stock options exercised									$ 50	80,462	0	0	0	80,512
Balance (in shares) at Sep. 30, 2021									67,610,864
Balance at Sep. 30, 2021									$ 67,610	123,590,412	(106,582,501)	(135,966)	(911,516)	16,028,039
Balance (in shares) at Dec. 31, 2021									68,153,336
Balance at Dec. 31, 2021									$ 68,153	124,915,560	(107,704,274)	(152,541)	(911,516)	16,215,382
Stock based compensation										305,370				305,370
Common stock to be issued to employees for bonuses										164,385				164,385
Net loss											(1,901,723)	(17,502)		(1,919,225)
Balance (in shares) at Mar. 31, 2022									68,153,336
Balance at Mar. 31, 2022									$ 68,153	125,385,315	(109,605,997)	(170,043)	(911,516)	14,765,912
Balance (in shares) at Dec. 31, 2021									68,153,336
Balance at Dec. 31, 2021									$ 68,153	124,915,560	(107,704,274)	(152,541)	(911,516)	16,215,382
Net loss														(6,786,037)
Balance (in shares) at Sep. 30, 2022									68,907,394
Balance at Sep. 30, 2022									$ 68,907	126,666,340	(114,436,281)	(206,571)	(911,516)	11,180,879
Balance (in shares) at Mar. 31, 2022									68,153,336
Balance at Mar. 31, 2022									$ 68,153	125,385,315	(109,605,997)	(170,043)	(911,516)	14,765,912
Stock based compensation										392,266				392,266
Common stock to be issued to employees for bonuses									$ 147	(147)
Net loss											(2,858,481)	(22,848)		(2,881,329)
Common stock issued for compensation (in shares)					224,850				27,051
Common stock issued for compensation					$ 225	(225)		0	$ 27	39,973				40,000
Common stock to be issued for payment of consulting services (in shares)	246,028				12,879
Common stock to be issued for payment of consulting services	$ 246	$ 345,689						345,935
Common stock to issued for services					$ 13	$ 12,864		$ 12,877
Common stock to be issued to employees for bonuses (in shares)									147,338
Balance (in shares) at Jun. 30, 2022									68,811,482
Balance at Jun. 30, 2022									$ 68,811	126,175,735	(112,464,478)	(192,891)	(911,516)	12,675,661
Stock based compensation										400,202				400,202
Net loss											(1,971,803)	(13,680)		(1,985,483)
Common stock to be issued for payment of consulting services (in shares)									95,912
Common stock to be issued for payment of consulting services									$ 96	90,403				90,499
Balance (in shares) at Sep. 30, 2022									68,907,394
Balance at Sep. 30, 2022									$ 68,907	$ 126,666,340	$ (114,436,281)	$ (206,571)	$ (911,516)	$ 11,180,879

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net loss	$ (6,786,037)	$ (5,738,084)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense	10,139	23,076
Amortization of intangibles	39,982	34,060
Stock based compensation	1,097,838	499,276
Inventory Reserve	430,245	0
Employees paid in stock	217,262	748,658
Expense paid in stock	436,434	490,614
Bad debt expense	100,000	0
Amortization of right-of-use asset	59,698	59,984
Deferred profit and divesture-equity investment (See Note 6)	0	164,461
Gain on debt extinguishment-PPP	0	(276,180)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable	(248,457)	112,549
(Increase) decrease in inventories	(440,574)	743,647
(Increase) in advances on contracts	(272,223)	(1,095,328)
(Increase) in prepaid expenses and other current assets	(102,858)	(98,501)
Increase in accounts payable	502,292	260,905
Increase in accounts payable, related party	515,142	35,113
(Decrease) increase in accrued expenses	(367,074)	510,790
Decrease in accrued expenses, related party	(80,758)	(51,253)
Decrease operating lease liability	(53,411)	(52,812)
Net cash used in operating activities	(4,942,360)	(3,629,025)
Cash flows from investing activities:
Purchase of furniture, fixtures, and equipment	(3,827)	(19,486)
Net cash used in investing activities	(3,827)	(19,486)
Cash flows from financing activities:
Payments finance lease obligations	(6,486)	(5,779)
Proceeds from exercise of warrants	0	3,150,416
Common stock issued to employee for option exercised	0	770,702
Net cash (used in) provided by financing activities	(6,486)	3,915,339
Net (decrease) increase in cash and cash equivalents	(4,952,673)	266,828
Cash and cash equivalents at beginning of period	14,764,346	14,223,917
Cash and cash equivalents at end of period	$ 9,811,673	$ 14,490,745

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Note 1 - Organization and Business

9 Months Ended

Sep. 30, 2022

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,” “us,” “our,” “we,” the “Company” or “Milestone” refer to Milestone Scientific Inc., and its consolidated subsidiaries, Wand Dental, Inc., Milestone Medical, Inc. and Milestone Education LLC (all described below), 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 ®; CathCheckTM; the Milestone logo ®; SafetyWand®; STA Single Tooth Anesthesia System®; and The Wand ®. 

Milestone Scientific was incorporated in the State of Delaware in August 1989. Milestone Scientific has developed a proprietary, computer-controlled anesthetic delivery device, using The Wand®, a single use disposable handpiece. The device is marketed in dentistry under the trademark CompuDent®, and STA Single Tooth Anesthesia System® and is suitable for all dental procedures that require local anesthetic. The dental devices are sold in the United States, Canada and in 60 other countries. Certain medical devices have obtained CE mark approval and can be marketed and sold in most European countries. 

In June 2017, Milestone Scientific received 510(k) marketing clearance from the U.S. Food and Drug Administration (FDA) on the CompuFlo® Epidural Computer Controlled Anesthesia System (“Epidural”). We are in the process of meeting with medical facilities and device distributors within the United States, Middle East and Europe. 

In May 2022, the Company initiated a Corrective Action Preventative Action (CAPA) investigation of the Epidural Disposable Kit, Part # 6100-01, lot HC 51, the scope of the voluntary market withdrawal needed to be expanded to include Part # 6100-03, lot HC 50. A new non-conformance was initiated, and Lot HC 50 was added to the scope of the CAPA initiated above. The investigation via the CAPA identified that there is an issue with the id adaptors used in both lot’s HC 51 and HC 50. However, the health hazard evaluation shows that there is no risk to the patient or the user, thus management has determined there are no potential impacts to patients or users. Lot’s HC 51 and HC 50 are worth approximately $22,000 and $10,000 respectively. Management has determined that no other lots were affected.

In May 2022, the Company was notified that Wand STA handpieces, reference # STA—5050-2725, lot B210113 were packaged incorrectly. The Company initiated a Corrective Action Preventative Action (CAPA) investigation to determine the root cause and implement corrective actions. The Health Hazard Evaluation (HHE) was completed and showed that there is no risk to the patient or the user due to this discrepancy, thus management has determined there are no potential impacts to patients or users. However, to provide the highest quality products to the market, Milestone Scientific decided to initiate a voluntary market withdrawal on May 13, 2022. Lot B210113 is worth approximately $25,000. 

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Note 2 - Liquidity and Uncertainties

9 Months Ended

Sep. 30, 2022

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 unaudited condensed consolidated financial statements are issued. As of September 30, 2022, the Company had an accumulated deficit of $114.4 million and has incurred a net loss of approximately $2 million and $6.8 million for the three and nine months ended September 30, 2022, respectively. Management believes that the Company will have sufficient cash reserves to meet its anticipated obligations for at least the next twelve months from the filing date of this report. 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, and a reduction in operating expenses. However, the Company’s continued operations will depend on its ability to raise additional capital through various potential sources until it achieves profitability, if ever. Management is actively pursuing financing or other strategic plans but can provide no assurances that such financing or other strategic plans will be available on acceptable terms, or at all.

To improve the Company’s cash position, management implemented a cost restructuring program to reduce the cash burn rate. This program included a reduction of the direct medical sales organization, and additional cost savings have been identified in other functional areas. The results of this program generated a cash burn rate for the three months ended September 30, 2022 of approximately $1.1million which is lower than the comparative previous quarter.

In addition to its employees, the Company relies on (i) distributors, agents, and third-party logistics providers in connection with product sales and distribution and (ii) raw material and component suppliers in the U.S., Europe, and China. If the Company, or any of these entities encounter any disruptions to its or their respective operations or facilities, or if the Company or any of these third-party partners were to shut down for any reason, including by fire, natural disaster, such as a hurricane, tornado or severe storm, power outage, systems failure, labor dispute, pandemic or other public health crises, or other unforeseen disruption, then the Company or they may be prevented or delayed from effectively operating its or their business, respectively.

The coronavirus (COVID-19) adversely impacted the Company's operations, our distributors and suppliers in recent years. In spite of the reopening of dental offices, hospitals, and pain clinics throughout the country and the rest of the world, revenues for the three and nine months ended September 30, 2022, and 2021 were adversely affected in particular for the medical business. However, any business interruptions, resulting from COVID-19, or new variant, could significantly disrupt our operations further and could have a material adverse impact on our business in the future.  

In addition, it is uncertain as to what effect the continuing spread of COVID-19 will have on the commercialization efforts of our CompuFlo Epidural and CathCheck systems. Such future developments could have a material adverse effect on the Company financial results and its ability to conduct business as expected.

Sanctions imposed by the United States and other western democracies, against Russia because of Ukraine conflict, and any expansion of the conflict, is likely to have unpredictable and wide-ranging effects on the domestic and global economy and financial markets, which could have an adverse effect on our business and results of operations. The conflict has already caused market volatility, a sharp increase in certain commodity prices, such as wheat and oil, and an increasing number and frequency of cybersecurity threats. So far, we have experienced a decrease in international sales to Ukraine and halted all sales to Russia, as a direct impact from the conflict. We will continue to monitor the situation carefully and, if necessary, take action to protect our business, operations and financial condition.

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Note 3 - Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

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), and Milestone Medical (majority owned).  All significant, intra-entity transactions and balances have been eliminated in the 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 condensed consolidated 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 consolidated financial statements and notes thereto for the year ended December 31, 2021, included in Milestone Scientific's Annual Report on Form 10-K

3.  Use of Estimates

The preparation of the unaudited condensed consolidated 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 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, stock compensation expense, and valuation allowances on deferred tax assets. Actual results could differ from those estimates.

4.  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, 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. 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 sale 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

The Company's 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

The Company operates in two operating segments: dental and medical. Therefore, results of the Company operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting. See Note 10 for revenues by geographical market, based on the customer’s location, and product category for the three and nine months ended September 30, 2022, and 2021.

5.  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. 

If Milestone Scientific determines that it has operating power and the obligation to absorb losses or receive benefits, Milestone Scientific consolidates the VIE as the primary beneficiary. Milestone Scientific’s involvement constitutes power that is most significant to the entity when it has unconstrained decision-making ability over key operational functions within the entity. Milestone Scientific has completed the VIE analysis relating to Milestone China and Anhui Maishida Medical Technology, Co. Ltd. (“Anhui”).

Milestone Scientific has determined that due to the loss of equity investment in Anhui, the Company no longer has significant influence of Anhui and therefore Anhui is not a variable interest entity. 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 of Milestone China who has 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. Accordingly, Milestone China has not been consolidated into the financial statements of Milestone Scientific and is accounted for under the equity method. See Note 6.

6.  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. As of September 30, 2022 and December 31, 2021, Milestone Scientific had approximately $9.7 million and $13.9 million, respectively, of investments with short term maturities classified as cash equivalents.  At times, such cash, may be more than the Federal Deposit Insurance Corporation insurance limit.  

7.  Accounts Receivable

Milestone Scientific sells a significant amount of its products on credit terms to its major distributors. Milestone Scientific estimates losses from the ability or 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, 2022 and December 31, 2021, accounts receivable and accounts receivable, related party was recorded, net of allowance for doubtful accounts of $110,000 and $10,000, respectively.

8.  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.

9.  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 unaudited 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 provision for income tax 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.

10.  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.

11.  Research and Development

Research and development costs, which consist principally of new product development costs payable to third parties, are expensed 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.

12.  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, 2022 and December 31, 2021, we had no uncertain tax positions that required recognition in the unaudited condensed consolidated financial statements. Milestone Scientific's policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the unaudited condensed Consolidated Statements of Operations. No interest and penalties are present for periods open. Tax returns for the 2018, 2019 and 2020 years are subject to audit by federal and state jurisdictions. The 2021 tax returns were filed subsequent to September 30, 2022.

13.  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 common shares of 70,975,420 and 69,573,795 for the three months ended September 30, 2022 and 2021 respectively. 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 common shares of 70,480,706 and 68,609,143 for the nine months ended September 30, 2022 and 2021 respectively. 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. The Company also includes shares to be issued to employees in the calculation of basic earnings per share because the shares to be issued settle a compensation obligation in a fixed number of shares.

Since Milestone Scientific had net losses in the three and nine months ended September 30, 2022 and 2021, the assumed effects of the exercise of potentially dilutive outstanding stock options, unissued restricted stock awards (“RSA”) and warrants, were not included in the calculation as their effect would have been anti-dilutive. Such outstanding options, RSA and warrants totaled 8,135,704 and 7,674,239 for the nine months ended on September 30, 2022 and 2021, respectively.

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). The Company 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 Company 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, 2022 and December 31, 2021, the Company did not have any assets or liabilities that were measured at fair value on a recurring basis.

14. Stock-Based Compensation 
 

Milestone Scientific accounts for stock-based compensation under ASC Topic 718, Share-Based Payment. ASC Topic 718 requires all share-based payments to employees, non-employees, directors, and officers, including grants of employee stock options, to be recognized in the unaudited condensed consolidated statements of operations over the service period, as an operating expense, based on the grant-date fair values. 

15.  Recent Accounting Pronouncements

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. The adoption of this standard did not have an impact on the Company's condensed consolidated financial statement.

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 did not have an impact on the Company's condensed consolidated financial statement.

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which amends the guidance on measuring credit losses for certain financial assets measured at amortized cost, including trade receivables. The FASB has subsequently issued several updates to the standard, providing additional guidance on certain topics covered by the standard. This update requires entities to recognize an allowance for credit losses using a forward-looking expected loss impairment model, taking into consideration historical experience, current conditions, and supportable forecasts that impact collectability.

In November 2019, the FASB issued ASU 2019-10, Financial Instruments - Credit Losses (Topic, 326), Derivatives and hedging (Topic 815), and Leases (Topic 842): Effective dates, which deferred the effective date of ASU 2016-13 for the Company. As a result of ASU 2019-10, ASU 2016-13 is effective for all entities with fiscal years beginning after December 15, 2022, including interim periods. The adoption of this update is not expected to have a material impact on the Company's condensed consolidated financial statements

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Note 4 - Inventories

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Inventory Disclosure [Text Block]

NOTE 4 — INVENTORIES

Inventories consist of the following:

	September 30, 2022		December 31, 2021
Dental finished goods, net	$	900,396	$	342,465
Medical finished goods, net		488,786		1,119,709
Component parts and other materials		162,660		79,339
Total inventories	$	1,551,842	$	1,541,513

The Company maintains an allowance for doubtful accounts on slow moving Medical finished goods of approximately $880,000 and $450,000 as of September 30, 2022 and December 31, 2021, respectively.

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Note 5 - Advances on Contracts

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Advances to Contract Manufacturer [Text Block]

NOTE 5 — ADVANCES ON CONTRACTS

The advances on contracts represent funding of future STA Single Tooth Anesthesia System inventory purchases, epidural instruments, and epidural replacements parts. The balance of the advances as of September 30, 2022 and December 31, 2021, is approximately $1.6 million and $1.3 million, respectively. The advance is classified as current based on the estimated annual usage of the underlying inventory.     

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Note 6 - Investment in and Transactions With Equity Investees

9 Months Ended

Sep. 30, 2022

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 40% ownership interest. Milestone China owns approximately 75% of Milestone Beijing Medical Equipment Company, Ltd (“Milestone Beijing”). At the time, Milestone Beijing had primary responsibility for the sales, marketing, and distribution of the Company’s dental products in China. Milestone Scientific recorded its investment in Milestone China under the equity method of accounting. 

In first quarter of 2020, Milestone China and certain manufacturing/marketing affiliates entered into a reorganization agreement (the “Transaction”) pursuant to which Milestone China was to merge into an affiliated manufacturing company, Anhui Maishida Medical Technology, Co. Ltd. (“Anhui”), with Anhui as the surviving entity and to have complete responsibility for sales, marketing, and distribution for the Company’s dental products in China. After completion of the Transaction, Milestone Scientific was expected to have an approximate 28.4% direct ownership in Anhui. Due to the COVID-19 pandemic, the regulatory approval of the planned Transaction was delayed while applicable government offices were closed in China and Hong Kong. Until the completion of the transaction Milestone Scientific's 28.4% in Anhui was held by Milestone China.

On November 23, 2021, management of Milestone Scientific became aware that on October 8, 2021, without approval from Milestone Scientific, (i) Milestone China entered into an Equity Transfer Agreement whereby Milestone China’s 28.4% equity stake in Anhui was transferred to Lidong Zhang, the CEO of Milestone China and Anhui, in exchange for RMB 2,840 million (approximately $440,351) of which no amounts have been or are expected to be received, see below, and (ii) Anhui held a shareholders’ meeting at which the Equity Transfer Agreement was approved by the shareholders of Anhui, eliminating Milestone China’s equity interest in Anhui and Milestone Scientific’s indirect equity interest in Anhui. Based on a review of the minutes of the Anhui shareholders’ meeting, Milestone China was not listed as a shareholder in such meeting due to the executed Equity Transfer Agreement between Lidong Zhang and Milestone China.

Though management believes that this conveyance by Milestone China to Lidong Zhang is outside of the laws of Hong Kong and/or China, as may be applicable, at this juncture Milestone Scientific has no ownership in Anhui and Milestone China has no assets or operations. After considering taking action to assert our rights in the matter, and based on the acknowledgement that such course of action is not without its procedural and substantive challenges in Hong Kong and/or China and, importantly, in view of Michelle Zhang dba Solee Science & Technology USA (“Solee”) (see below), a company located in New Jersey, then becoming the independent distributor for Milestone China and its subsidiaries, and due to the good working relationship then developing between Milestone Scientific and Solee and to the reduction of Milestone Scientific’s credit exposure to a Chinese entity, management is not pursuing any legal action at this time to recover our equity interest. Given the significant deterioration of the economy in China, caused by in large part the actions of the Chinese central government in dealing with COVID-19, the crash of the real estate market and the moves against independent companies, the Company does not believe it is prudent at this time to continue to pursue its investigation of any options it may have regarding its Chinese distributor, and therefore, in order to preserve cash the Company is for the time being suspending its investigation. 

At this time, Milestone Scientific has not received any consideration, does not know if any of such consideration promised to Milestone China for its interest in Anhui has been paid and, if paid, whether it can recover its share of such consideration. Unless circumstances change, Milestone Scientific does not expect it will receive any of the consideration received by Milestone China for its assets without pursuing legal action. As a result, Milestone Scientific has not recorded a gain or receivable related to the transfer of Anhui. As of September 30, 2022 and December 31, 2021, the investment in Milestone China was zero.

Related Party Transactions 

Milestone China Distribution Agreement

Milestone China had been 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.

Beginning in mid- November 2021, Milestone Scientific entered into discussions with Michelle Zhang dba Solee Science & Technology USA (“Solee”), a company located in New Jersey, to become Milestone Scientific’s independent distributor for China, replacing its former distributor Milestone China and its subsidiaries. On November 22, 2021, Wand Dental, Inc., a United States subsidiary of Milestone Scientific, entered into a Buy and Sell Agreement with Solee, pursuant to which Milestone Scientific granted Solee the right to sell Milestone Scientific’s STA instruments, associated handpieces, and spare parts in China to Anhui. For the three months ended September 30, 2022, Milestone Scientific shipped no instruments or handpieces to Solee. For the nine months ended September 30, 2022, Milestone Scientific shipped handpieces to Solee for sale to Anhui and recognized revenue of approximately $370,000. As of September 30, 2022, approximately $100,000 was included in account receivable related party, however management has recorded a reserve against this receivable. For the three and nine months ended September 30, 2021, Milestone Scientific shipped instruments, and handpieces to Solee for the sale to Anhui and recognized revenue of $360,000 and $1.4 million, respectively. As of December 31, 2021, the Company had approximately $89,000 of deposits from Solee for future shipment of goods included in accrued expenses on the accompanying condensed consolidated balance sheet. As of September 30, 2022, the Company had no deposits from Solee for future shipment of goods included in accrued expenses on the accompanying condensed consolidated balance sheet.  

Gross Profit Deferral

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

As of September 30, 2022 and December 31, 2021, the Company had no deferred profit in the unaudited condensed consolidated balance sheets. For the three and nine months ended September 30, 2022, Milestone Scientific did not record any loss on equity investment in relation to gross profit on product sold to Milestone China, Anhui, and Solee. For the three and nine months ended September 30, 2021, Milestone Scientific recorded loss on equity investment of approximately $70,000 and $164,000, respectively, in relation to gross profit previously deferred on product sold to Milestone China, Anhui, and Solee, recorded as deferred profit and divesture-equity investment on the accompanying unaudited condensed consolidated statement of operations. 

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Note 7 - Patents

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 7 — PATENTS    

	September 30, 2022
	Cost		Accumulated Amortization			Net
Patents-foundation intellectual property		1,377,863		(1,140,227	)		237,636
Total		1,377,863		(1,140,227	)		237,636

	December 31, 2021
	Cost		Accumulated Amortization			Net
Patents-foundation intellectual property		1,377,863		(1,100,244	)		277,619
Total		1,377,863		(1,100,244	)		277,619

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, 2022, respectively. Amortization expense was approximately $11,000 and $34,000 for the three and nine months ended September 30, 2021, respectively. The annual amortization expense expected to be recorded for existing intangibles assets for the years 2022 through 2026 and thereafter, is approximately $13,000, $52,000, $34,000, $28,000, and $111,000, respectively.   

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Note 8 - Stockholders' Equity

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE 8— STOCKHOLDERS’ EQUITY

Warrants

The following table summarizes information about shares issuable under warrants outstanding as of September 30, 2022

	Warrant shares outstanding		Weighted Average exercise price		Weighted Average remaining life		Intrinsic value
Outstanding at January 1, 2022		4,268,221		2.18		1.50		1,187,546
Issued		-		-		-		-
Exercised		-		-		-		-
Outstanding and exercisable at September 30, 2022		4,268,221		2.18		0.75		91,226

Shares to Be Issued

As of September 30, 2022 and 2021, there were 1,852,789 and 1,861,639 shares, respectively, to be issued whose issuance has been deferred by certain employees of Milestone Scientific.  As of September 30, 2022 and 2021, there were 174,364 and 144,024 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, 2022			September 30, 2021
Shares-to-be-issued, outstanding January 1, 2022, and 2021, respectively		2,066,343			2,428,329
Granted in current period		108,148			33,238
Issued in current period		(147,338	)		(455,906	)
Shares-to be issued outstanding September 30, 2022, and 2021, respectively		2,027,153			2,005,661

Stock Options Plans

The Milestone Scientific Inc. 2020 Equity Compensation Plan, as amended and restated (the "2020 Plan"), provides for awards of restricted common, stock restricted stock units, options to purchase and other awards, up to a maximum 4,000,000 shares of common stock, and expires in June 2031. Options may be granted to employees, directors, and consultants of Milestone Scientific for the purchase of shares of common stock at a price not less than the fair market value of common stock on the date of grant. 

Milestone Scientific recognizes stock compensation expense over the requisite service period. For three and nine months ended September 30, 2022, Milestone Scientific recognized approximately $232,998 and $1.1 million of total employee stock compensation cost, respectively, recorded in general and administrative expenses on the statement of operations. For three and nine months ended September 30, 2021, Milestone Scientific recognized approximately $165,000 and $451,000 of total employee stock compensation cost, respectively, recorded in general and administrative expenses on the statement of operations.

As of September 30, 2022, there was approximately $2.7 million of total unrecognized compensation cost related to non-vested options. Milestone Scientific expects to recognize these costs over a weighted average period of 2.75 years. 

A summary of option activity for employees under the plans and changes during the nine months ended September 30, 2022 is presented below:        

	Number of Options		Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding January 1, 2022		2,843,693		2.39		7.69		49,246
Granted during 2022		216,296		1.52		2.23		-
Exercised during 2022		-		-		-		-
Forfeited or expired during 2022		-		-		-		-
Options outstanding September 30, 2022		3,059,989		2.29		6.63		-
Exercisable, September 30, 2022		994,914		2.18		5.28		-

A summary of option activity for non-employees under the plans and changes during the nine months ended September 30, 2022 is presented below:        

	Number of Options		Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding January 1, 2022		83,330		1.85		3.33		49,748
Granted during 2022		-		-		-		-
Exercised during 2022		-		-		-		-
Options outstanding September 30, 2022		83,330		1.85		2.58		4,333
Exercisable, September 30, 2022		69,441		1.68		2.37		4,333

For the three and nine months ended  September 30, 2022, Milestone Scientific recognized approximately $5,000 and $15,000 expense related to non-employee options, respectively. For the three and nine months ended  September 30, 2021, Milestone Scientific recognized approximately $5,000 and $20,000 expense related to non-employee options, respectively.

The information below summarizes the restricted stock award activity for the nine months September 30, 2022.

	Number of Shares			Weighted Average Grant-Date Fair Value per Award
Non-vested as January 1, 2022		96,557			2.33
Granted		975,148			0.86
Vested		(224,850	)
Cancelled		(122,693	)
Non-vested as September 30, 2022		724,162			1.11

As of September 30, 2022, there were 49,616 restricted shares granted and deferred under the terms of an employment agreement with the Territory Manager of Milestone Scientific, Inc. Such shares will be issued to him (or her) completion of 2 years of employment. For the three and nine months ended September 30, 2022, the Company recognized negative stock compensation of approximately $10,400 and $37,500, respectively, due to termination of non-vested employees in the current period. For the three and nine months ended September 30 2021, the Company recognized stock compensation expense of approximately $16,667 and $37,500, respectively. As of September 30, 2022, the total unrecognized stock compensation expense was $46,875 related to non-vested restricted stock awards, which the Company expects to recognize over an estimated weighted average period of 1.28 years.

As of September 30, 2022, the Company entered into restricted stock agreements with members of the Board of Directors of the Company. The Company granted 899,300 restricted stock awards with a fair market value of $0.82 per share. Such restricted stock vests as follows: 25% on the grant date, and 25% quarterly, on the first day of the following months:  October 2022, January 2023, and April 2023. These awards vest immediately upon a change of control as defined in the agreements. For the three and nine months ended September 30, 2022, the Company recognized approximately $167,000, and $381,000, respectively for restricted stock expenses recorded in general and administrative expenses on the statement of operation. As of September 30, 2022, the total unrecognized stock compensation expense was $356,000 related to non-vested restricted stock awards with the members of the Board of Directors, which the Company expects to recognize over an estimated weighted average period of 0.5 years.

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Note 9 - Income Taxes

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE 9 — 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. 

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Note 10 - Segment and Geographic Data

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

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

NOTE 10 — 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 bases. 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:

	Three months ended September 30,				Nine months ended September 30,
Sales
Net Sales:	2022		2021		2022		2021
Dental	$	2,206,499	$	2,076,233	$	6,509,619	$	7,334,628
Medical		9,200		32,000		55,350		124,050
Total net sales	$	2,215,699	$	2,108,233	$	6,564,969	$	7,458,678

Operating Income (Loss):	2022			2021			2022			2021
Dental	$	308,913		$	193,252		$	826,175		$	1,844,083
Medical		(937,468	)		(937,876	)		(3,788,842	)		(2,968,596	)
Corporate		(1,384,940	)		(1,236,297	)		(3,850,189	)		(4,713,353	)
Total operating loss	$	(2,013,495	)	$	(1,980,921	)	$	(6,812,856	)	$	(5,837,866	)

Depreciation and Amortization:	2022		2021		2022		2021
Dental	$	951	$	892	$	2,737	$	3,458
Medical		1,019		1,241		3,056		6,257
Corporate		14,691		14,220		44,328		42,398
Total depreciation and amortization	$	16,661	$	16,353	$	50,121	$	52,113

Income (loss) before taxes and equity in earnings of affiliates:	2022			2021			2022			2021
Dental	$	307,699		$	191,864		$	822,270		$	1,915,148
Medical		(938,963	)		(939,202	)		(3,793,236	)		(2,972,462	)
Corporate		(1,354,219	)		(1,238,191	)		(3,815,071	)		(4,515,976	)
Total loss before taxes and equity in earnings of affiliate	$	(1,985,483	)	$	(1,985,529	)	$	(6,786,037	)	$	(5,573,290	)

Total Assets	September 30, 2022		December 31, 2021
Dental	$	4,083,657	$	6,163,169
Medical		863,470		1,373,511
Corporate		10,331,332		12,273,064
Total assets	$	15,278,459	$	19,809,744

The following table presents information about our operations by geographic area for the three and nine months ended September 30, 2022 and 2021.  Net sales by geographic area are based on the respective locations of our subsidiaries:

	Three months ended September 30, 2022						Three months ended September 30, 2021
Domestic: US	Dental		Medical		Grand Total		Dental		Medical		Grand Total
Instruments	$	164,341	$	7,500	$	171,841	$	36,480	$	-	$	36,480
Handpieces		678,473		1,700		680,173		721,149		11,500		732,649
Accessories		24,304		-		24,304		21,253		-		21,253
Grand Total	$	867,118	$	9,200	$	876,318	$	778,882	$	11,500	$	790,382
International: Rest of World
Instruments	$	436,069	$	-	$	436,069	$	253,063	$	4,500	$	257,563
Handpieces		881,616		-		881,616		674,133		16,000		690,133
Accessories		21,696		-		21,696		9,300				9,300
Grand Total	$	1,339,381	$	-	$	1,339,381	$	936,496	$	20,500	$	956,996
International: China
Instruments	$	-	$	-	$	-	$	-	$	-	$	-
Handpieces		-		-		-		360,855		-		360,855
Accessories		-		-		-				-		-
Grand Total	$	-	$	-	$	-	$	360,855	$	-	$	360,855
Total Product Sales	$	2,206,499	$	9,200	$	2,215,699	$	2,076,233	$	32,000	$	2,108,233

	Nine months ended September 30, 2022						Nine months ended September 30, 2021
Domestic: US	Dental		Medical		Grand Total		Dental		Medical		Grand Total
Instruments	$	442,336	$	7,500	$	449,836	$	391,250	$	-	$	391,250
Handpieces		2,275,865		25,750		2,301,615		2,319,049		19,650		2,338,699
Accessories		73,210		2,100		75,310		58,134		-		58,134
Grand Total	$	2,791,411	$	35,350	$	2,826,761	$	2,768,433	$	19,650	$	2,788,083
International: Rest of World
Instruments	$	1,050,443	$	-	$	1,050,443	$	792,903	$	62,500	$	855,403
Handpieces		2,265,367		20,000		2,285,367		2,337,692		41,900		2,379,592
Accessories		42,434		-		42,434		42,409		-		42,409
Grand Total	$	3,358,244	$	20,000	$	3,378,244	$	3,173,004	$	104,400	$	3,277,404
International: China
Instruments	$	-	$	-	$	-	$	228,000	$	-	$	228,000
Handpieces		359,964		-		359,964		1,165,191		-		1,165,191
Accessories		-		-		-		-		-		-
Grand Total		359,964		-	$	359,964	$	1,393,191	$	-	$	1,393,191
Total Product Sales	$	6,509,619	$	55,350	$	6,564,969	$	7,334,628	$	124,050	$	7,458,678

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Note 11 - Concentrations

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

NOTE 11 -- CONCENTRATIONS

Milestone Scientific has informal arrangements with third-party U.S. manufacturers of the STA, CompuDent and CompuMed 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, 2022 and 2021.  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 months ended September 30, 2022, an aggregate of approximately 11% and 32% of the Company’s net product sales were from two distributors. For the nine months ended September 30, 2022, an aggregate of approximately 36% of the Company’s net product sales were from one distributor. For the three months ended September 30, 2021, an aggregate of approximately 17% and  34% of the Company’s net product sales were from two distributor. For the nine months ended September 30, 2021, an aggregate of approximately 19% and 34% of the Company’s net product sales were from two distributors. 

For the nine months ended September 30, 2022, we had the four distributors that accounted for 13%, 15%, 18% and 36% of the aggregate accounts receivable.  As of December 31, 2021, we had three distributors that accounted for 13%, 28%, and 29% of the aggregate accounts receivable. 

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Note 12 - Related Party Transactions

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE 12 -- 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 manufacturer of its handpieces, pursuant to which it manufactures products under specific purchase orders, but without minimum purchase commitments. Purchases from this manufacturer were approximately $658,000 and $2.3 million, respectively for three and nine months ended September 30, 2022. Purchases from this manufacturer were approximately $417,000 and $1.3 million, respectively for three and nine months ended September 30, 2021. 

As of September 30, 2022 and December 31, 2021, Milestone Scientific owed this manufacturer approximately $904,000 and $548,000, respectively, which approximately $904,000 and $395,000 is included in accounts payable, related party, respectively, and $0 and approximately $153,000 is included in accrued expense, related party, respectively, on the unaudited condensed consolidated balance sheets. 

Milestone China

See Note 6 of the notes to the unaudited condensed consolidated financial statements.
 
Other

K. Tucker Andersen, a significant stockholder of Milestone Scientific provides financial and business strategic services to the Company. Expenses recognized were $25,000 and $75,000 for each of the three and nine months ended September 30, 2022 and 2021, respectively.

The Company engaged Mr. Trombetta as a consultant for a period of twelve months (beginning October 1, 2020, and ending September 30, 2021), to provide international business dental information and business contacts to the Company and provide consulting services for new international business and dental segments. For the three and nine months ended September 30, 2021, the Company expensed $15,000 and $45,000, respectively, for services rendered by Mr. Trombetta. Mr. Trombetta received shares of the Company’s common stock in lieu of the cash under this agreement. This agreement was terminated September 30, 2021, and therefore, no expenses were incurred for services rendered by Mr. Trombetta for the three and nine months ended September 30, 2022. 

The Director of Clinical Affairs’ royalty fee was approximately $108,000 and $322,000 for three and nine months ended September 30, 2022, respectively. The Director of Clinical Affairs’ royalty fee was approximately $74,000 and $322,000 for three and nine months ended September 30, 2021, respectively. Additionally, Milestone Scientific expensed consulting fees to the Director of Clinical Affairs of $39,000 and $115,000 for each of the three and nine months ended September 30, 2022, and 2021, respectively. As of September 30, 2022, and December 31, 2021, Milestone Scientific owed the Director Clinical Affairs for royalties of approximately $108,000 and $123,000, respectively, which is included in accrued expense, related party, in the condensed consolidated balance sheet.

On March 2, 2021, Milestone Scientific entered into a Royalty Sharing Agreement with Leonard Osser, the Company’s then 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 Dr. Hochman, 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 Dr. Hochman and his wife under their Technology Sale Agreement 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 5% to 2.5% the payments due to them on May 9, 2027 and thereafter, with respect to dental products.

Pursuant to a Succession Agreement dated April 6, 2021 between Mr. Osser and the Company: (i) the Employment Agreement dated as of July 10, 2017 between Mr. Osser and the Company, pursuant to which upon Mr. Osser stepping down as Interim Chief Executive Officer of the Company, the Company agreed to employ him as Managing Director, China Operations of the Company (the “China Operations Agreement”), and (ii) the Consulting Agreement dated as of July 10, 2017 (the “Consulting Agreement”) between the Company and U.S. Asian Consulting Group, LLC, a company of which Mr. Osser is a principal, the compensation under the China Operations Agreement was modified to reduce the overall compensation by $100,000 to $200,000, split equally between a cash amount and an amount in shares, and the compensation under the Consulting Agreement is increased by $100,000 to $200,000, equally split between a cash amount and an amount in shares, which shares were formerly payable under the China Operations Agreement.  Compensation under the China Operations Agreement and the Consulting Agreement are payable for 9.5 years from May 19, 2021.

The Company recorded expense of $50,000 and $150,000 which is included SG&A expenses and accrued expense, related party, respectively, related to the Managing Director, China Operations for three and nine months ended September 30, 2022, respectively. The Company recorded expense of $50,000 and $75,000 which is included SG&A expenses and accrued expense, related party, respectively, related to the Managing Director, China Operations for the three and nine months ended September 30, 2021, respectively. The Company recorded expense of $50,000 and $150,000 which includes consultant expenses and accrued expenses, related party, respectively, related to the US Asian Consulting Group, LLC for the three and nine months ended September 30, 2022. The Company recorded expense of $50,000 and $75,000 which is included consultant expenses and accrued expense, related party, respectively, related to the US Asian Consulting Group, LLC for each of the three and nine months ended September 30, 2021.  As of September 30, 2022, and December 31, 2021, the Company owed Mr. Osser approximately $166,000 and $0, respectively, which is included accrued expense, related party in the condensed consolidated balance sheet.     

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Note 13 - Commitments

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE 13 — COMMITMENTS

(1)  Contract Manufacturing Agreement 

Milestone Scientific has informal arrangements with third-party manufacturers of the STA, CompuDent® devices, pursuant to which they manufacture these products under specific purchase orders but without any long-term contract or minimum purchase commitment. The Company has an open purchase commitment for the delivery of 2,410 STA CompuDent® instruments. 

As of September 30, 2022, the purchase order commitment was approximately $1.9 million and advances of approximately $1.5 million are reported in advances on contracts in the condensed consolidated balance sheet. As of September 30, 2022, the Company made advanced payments of approximately $1.3 million for a purchase commitment for STA instruments, sound chips for future instruments of approximately $191,000 and advanced to customers for handpiece replacement of approximately $23,000 from market withdrawal in May 2022 are reported in advances on contracts in the condensed consolidated balance sheet. As of December 31, 2021, the purchase order commitment was approximately $2.6 million and advances of approximately $1.3 million are reported in advances on contracts in the condensed consolidated balance sheet. 

As of September 30, 2022, the company also had advances on an open purchase order for long lead items for a future purchase order for the manufacturing of Epidural instrument of approximately $41,000 and advanced to customers for handpiece replacement of $34,000 from market withdrawal in  May 2022 a reported in advances on contracts in the condensed consolidated balance sheet. The advance is classified as current based on the estimated annual usage of the underlying inventory. As of December 31, 2021, the company also has advances on an open purchase order for long lead items for a future purchase order for the manufacturing of Epidural instrument of approximately $34,000 reported in advances on contracts in the condensed consolidated balance sheet. The advance is classified as current based on the estimated annual usage of the underlying inventory.

(2)  Leases

Operating Leases

In August 2019, the Company made the decision to not renew 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 commenced 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 more than new base year amounts, which are accounted for as variable lease expenses. 

As of September 30, 2022, total operating lease and finance right-of-use assets were $484,327 and total operating lease and finance liabilities were $497,931, of which $88,933 and $408,998 were classified as current and non-current, respectively. As of September 30, 2022, total finance lease liabilities were $22,273 of which $9,153 and $13,120 were classified as current and non-current, respectively. As of December 31, 2021, total operating lease and finance right-of-use assets were $550,511 and total operating lease and finance liabilities were $577,981, of which $81,001 and $476,980 were classified as current and non-current, respectively. As of December 31, 2021, total finance lease liabilities were $28,607, of which $8,545 and $20,062 were classified as current and non-current, respectively. 

The components of lease expense were as follows:

	Three months ended				Nine months ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Cash paid for operating lease liabilities		31,999		31,882		95,996		95,645
Cash paid for finance lease liabilities		2,685		2,685		8,055		8,055
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
								0.00	%
Weighted Average Remaining Lease Term
Finance leases (years)					2.3		5.5
Operating leases (years)					4.5		3.3

(3) Other Commitments

On March 2, 2021, Milestone Scientific entered into a Royalty Sharing Agreement with Leonard Osser, the Company’s  then that would otherwise be payable to Mr. Hochman and his wife under the Technology Sale Agreement referred to above, the Hochman's having agreed with the Company pursuant to an addendum to such Technology Sale Agreement dated February 25, 2021 to reduce from 5% to 2.5% the payments due to them on May 9, 2027 and thereafter, with respect to dental products.

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2022

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), and Milestone Medical (majority owned).  All significant, intra-entity transactions and balances have been eliminated in the 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 condensed consolidated 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 consolidated financial statements and notes thereto for the year ended December 31, 2021, included in Milestone Scientific's Annual Report on Form 10-K

Use of Estimates, Policy [Policy Text Block]

3.  Use of Estimates

The preparation of the unaudited condensed consolidated 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 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, stock compensation expense, and valuation allowances on deferred tax assets. Actual results could differ from those estimates.

Revenue [Policy Text Block]

4.  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, 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. 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 sale 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

The Company's 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

The Company operates in two operating segments: dental and medical. Therefore, results of the Company operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting. See Note 10 for revenues by geographical market, based on the customer’s location, and product category for the three and nine months ended September 30, 2022, and 2021.

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

5.  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. 

If Milestone Scientific determines that it has operating power and the obligation to absorb losses or receive benefits, Milestone Scientific consolidates the VIE as the primary beneficiary. Milestone Scientific’s involvement constitutes power that is most significant to the entity when it has unconstrained decision-making ability over key operational functions within the entity. Milestone Scientific has completed the VIE analysis relating to Milestone China and Anhui Maishida Medical Technology, Co. Ltd. (“Anhui”).

Milestone Scientific has determined that due to the loss of equity investment in Anhui, the Company no longer has significant influence of Anhui and therefore Anhui is not a variable interest entity. 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 of Milestone China who has 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. Accordingly, Milestone China has not been consolidated into the financial statements of Milestone Scientific and is accounted for under the equity method. See Note 6.

Cash and Cash Equivalents, Policy [Policy Text Block]

6.  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. As of September 30, 2022 and December 31, 2021, Milestone Scientific had approximately $9.7 million and $13.9 million, respectively, of investments with short term maturities classified as cash equivalents.  At times, such cash, may be more than the Federal Deposit Insurance Corporation insurance limit.  

Accounts Receivable [Policy Text Block]

7.  Accounts Receivable

Milestone Scientific sells a significant amount of its products on credit terms to its major distributors. Milestone Scientific estimates losses from the ability or 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, 2022 and December 31, 2021, accounts receivable and accounts receivable, related party was recorded, net of allowance for doubtful accounts of $110,000 and $10,000, respectively.

Inventory, Policy [Policy Text Block]

8.  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]

9.  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 unaudited 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 provision for income tax 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.

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

10.  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.

Research and Development Expense, Policy [Policy Text Block]

11.  Research and Development

Research and development costs, which consist principally of new product development costs payable to third parties, are expensed 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]

12.  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, 2022 and December 31, 2021, we had no uncertain tax positions that required recognition in the unaudited condensed consolidated financial statements. Milestone Scientific's policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the unaudited condensed Consolidated Statements of Operations. No interest and penalties are present for periods open. Tax returns for the 2018, 2019 and 2020 years are subject to audit by federal and state jurisdictions. The 2021 tax returns were filed subsequent to September 30, 2022.

Earnings Per Share, Policy [Policy Text Block]

13.  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 common shares of 70,975,420 and 69,573,795 for the three months ended September 30, 2022 and 2021 respectively. 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 common shares of 70,480,706 and 68,609,143 for the nine months ended September 30, 2022 and 2021 respectively. 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. The Company also includes shares to be issued to employees in the calculation of basic earnings per share because the shares to be issued settle a compensation obligation in a fixed number of shares.

Since Milestone Scientific had net losses in the three and nine months ended September 30, 2022 and 2021, the assumed effects of the exercise of potentially dilutive outstanding stock options, unissued restricted stock awards (“RSA”) and warrants, were not included in the calculation as their effect would have been anti-dilutive. Such outstanding options, RSA and warrants totaled 8,135,704 and 7,674,239 for the nine months ended on September 30, 2022 and 2021, respectively.

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

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). The Company 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 Company 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, 2022 and December 31, 2021, the Company did not have any assets or liabilities that were measured at fair value on a recurring basis.

Share-Based Payment Arrangement [Policy Text Block]

14. Stock-Based Compensation 
 

Milestone Scientific accounts for stock-based compensation under ASC Topic 718, Share-Based Payment. ASC Topic 718 requires all share-based payments to employees, non-employees, directors, and officers, including grants of employee stock options, to be recognized in the unaudited condensed consolidated statements of operations over the service period, as an operating expense, based on the grant-date fair values. 

New Accounting Pronouncements, Policy [Policy Text Block]

15.  Recent Accounting Pronouncements

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. The adoption of this standard did not have an impact on the Company's condensed consolidated financial statement.

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 did not have an impact on the Company's condensed consolidated financial statement.

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which amends the guidance on measuring credit losses for certain financial assets measured at amortized cost, including trade receivables. The FASB has subsequently issued several updates to the standard, providing additional guidance on certain topics covered by the standard. This update requires entities to recognize an allowance for credit losses using a forward-looking expected loss impairment model, taking into consideration historical experience, current conditions, and supportable forecasts that impact collectability.

In November 2019, the FASB issued ASU 2019-10, Financial Instruments - Credit Losses (Topic, 326), Derivatives and hedging (Topic 815), and Leases (Topic 842): Effective dates, which deferred the effective date of ASU 2016-13 for the Company. As a result of ASU 2019-10, ASU 2016-13 is effective for all entities with fiscal years beginning after December 15, 2022, including interim periods. The adoption of this update is not expected to have a material impact on the Company's condensed consolidated financial statements

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Note 4 - Inventories (Tables)

9 Months Ended

Sep. 30, 2022

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	September 30, 2022		December 31, 2021
Dental finished goods, net	$	900,396	$	342,465
Medical finished goods, net		488,786		1,119,709
Component parts and other materials		162,660		79,339
Total inventories	$	1,551,842	$	1,541,513

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Note 7 - Patents (Tables)

9 Months Ended

Sep. 30, 2022

Notes Tables

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

	September 30, 2022
	Cost		Accumulated Amortization			Net
Patents-foundation intellectual property		1,377,863		(1,140,227	)		237,636
Total		1,377,863		(1,140,227	)		237,636

	December 31, 2021
	Cost		Accumulated Amortization			Net
Patents-foundation intellectual property		1,377,863		(1,100,244	)		277,619
Total		1,377,863		(1,100,244	)		277,619

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Note 8 - Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2022

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, 2022		4,268,221		2.18		1.50		1,187,546
Issued		-		-		-		-
Exercised		-		-		-		-
Outstanding and exercisable at September 30, 2022		4,268,221		2.18		0.75		91,226

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

	September 30, 2022			September 30, 2021
Shares-to-be-issued, outstanding January 1, 2022, and 2021, respectively		2,066,343			2,428,329
Granted in current period		108,148			33,238
Issued in current period		(147,338	)		(455,906	)
Shares-to be issued outstanding September 30, 2022, and 2021, respectively		2,027,153			2,005,661

Share-Based Payment Arrangement, Option, Activity [Table Text Block]

	Number of Options		Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding January 1, 2022		2,843,693		2.39		7.69		49,246
Granted during 2022		216,296		1.52		2.23		-
Exercised during 2022		-		-		-		-
Forfeited or expired during 2022		-		-		-		-
Options outstanding September 30, 2022		3,059,989		2.29		6.63		-
Exercisable, September 30, 2022		994,914		2.18		5.28		-

	Number of Options		Weighted Averaged Exercise Price $		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Options Value $
Options outstanding January 1, 2022		83,330		1.85		3.33		49,748
Granted during 2022		-		-		-		-
Exercised during 2022		-		-		-		-
Options outstanding September 30, 2022		83,330		1.85		2.58		4,333
Exercisable, September 30, 2022		69,441		1.68		2.37		4,333

Restricted Stock [Member]

Notes Tables

Disclosure of Share-Based Compensation Arrangements by Share-Based Payment Award [Table Text Block]

	Number of Shares			Weighted Average Grant-Date Fair Value per Award
Non-vested as January 1, 2022		96,557			2.33
Granted		975,148			0.86
Vested		(224,850	)
Cancelled		(122,693	)
Non-vested as September 30, 2022		724,162			1.11

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Note 10 - Segment and Geographic Data (Tables)

9 Months Ended

Sep. 30, 2022

Notes Tables

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

	Three months ended September 30,				Nine months ended September 30,
Sales
Net Sales:	2022		2021		2022		2021
Dental	$	2,206,499	$	2,076,233	$	6,509,619	$	7,334,628
Medical		9,200		32,000		55,350		124,050
Total net sales	$	2,215,699	$	2,108,233	$	6,564,969	$	7,458,678

Operating Income (Loss):	2022			2021			2022			2021
Dental	$	308,913		$	193,252		$	826,175		$	1,844,083
Medical		(937,468	)		(937,876	)		(3,788,842	)		(2,968,596	)
Corporate		(1,384,940	)		(1,236,297	)		(3,850,189	)		(4,713,353	)
Total operating loss	$	(2,013,495	)	$	(1,980,921	)	$	(6,812,856	)	$	(5,837,866	)

Depreciation and Amortization:	2022		2021		2022		2021
Dental	$	951	$	892	$	2,737	$	3,458
Medical		1,019		1,241		3,056		6,257
Corporate		14,691		14,220		44,328		42,398
Total depreciation and amortization	$	16,661	$	16,353	$	50,121	$	52,113

Income (loss) before taxes and equity in earnings of affiliates:	2022			2021			2022			2021
Dental	$	307,699		$	191,864		$	822,270		$	1,915,148
Medical		(938,963	)		(939,202	)		(3,793,236	)		(2,972,462	)
Corporate		(1,354,219	)		(1,238,191	)		(3,815,071	)		(4,515,976	)
Total loss before taxes and equity in earnings of affiliate	$	(1,985,483	)	$	(1,985,529	)	$	(6,786,037	)	$	(5,573,290	)

Total Assets	September 30, 2022		December 31, 2021
Dental	$	4,083,657	$	6,163,169
Medical		863,470		1,373,511
Corporate		10,331,332		12,273,064
Total assets	$	15,278,459	$	19,809,744

Sales by Product and by Geographical Region [Table Text Block]

	Three months ended September 30, 2022						Three months ended September 30, 2021
Domestic: US	Dental		Medical		Grand Total		Dental		Medical		Grand Total
Instruments	$	164,341	$	7,500	$	171,841	$	36,480	$	-	$	36,480
Handpieces		678,473		1,700		680,173		721,149		11,500		732,649
Accessories		24,304		-		24,304		21,253		-		21,253
Grand Total	$	867,118	$	9,200	$	876,318	$	778,882	$	11,500	$	790,382
International: Rest of World
Instruments	$	436,069	$	-	$	436,069	$	253,063	$	4,500	$	257,563
Handpieces		881,616		-		881,616		674,133		16,000		690,133
Accessories		21,696		-		21,696		9,300				9,300
Grand Total	$	1,339,381	$	-	$	1,339,381	$	936,496	$	20,500	$	956,996
International: China
Instruments	$	-	$	-	$	-	$	-	$	-	$	-
Handpieces		-		-		-		360,855		-		360,855
Accessories		-		-		-				-		-
Grand Total	$	-	$	-	$	-	$	360,855	$	-	$	360,855
Total Product Sales	$	2,206,499	$	9,200	$	2,215,699	$	2,076,233	$	32,000	$	2,108,233

	Nine months ended September 30, 2022						Nine months ended September 30, 2021
Domestic: US	Dental		Medical		Grand Total		Dental		Medical		Grand Total
Instruments	$	442,336	$	7,500	$	449,836	$	391,250	$	-	$	391,250
Handpieces		2,275,865		25,750		2,301,615		2,319,049		19,650		2,338,699
Accessories		73,210		2,100		75,310		58,134		-		58,134
Grand Total	$	2,791,411	$	35,350	$	2,826,761	$	2,768,433	$	19,650	$	2,788,083
International: Rest of World
Instruments	$	1,050,443	$	-	$	1,050,443	$	792,903	$	62,500	$	855,403
Handpieces		2,265,367		20,000		2,285,367		2,337,692		41,900		2,379,592
Accessories		42,434		-		42,434		42,409		-		42,409
Grand Total	$	3,358,244	$	20,000	$	3,378,244	$	3,173,004	$	104,400	$	3,277,404
International: China
Instruments	$	-	$	-	$	-	$	228,000	$	-	$	228,000
Handpieces		359,964		-		359,964		1,165,191		-		1,165,191
Accessories		-		-		-		-		-		-
Grand Total		359,964		-	$	359,964	$	1,393,191	$	-	$	1,393,191
Total Product Sales	$	6,509,619	$	55,350	$	6,564,969	$	7,334,628	$	124,050	$	7,458,678

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Note 13 - Commitments (Tables)

9 Months Ended

Sep. 30, 2022

Notes Tables

Lease, Cost and Other Information [Table Text Block]

	Three months ended				Nine months ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Cash paid for operating lease liabilities		31,999		31,882		95,996		95,645
Cash paid for finance lease liabilities		2,685		2,685		8,055		8,055
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
								0.00	%
Weighted Average Remaining Lease Term
Finance leases (years)					2.3		5.5
Operating leases (years)					4.5		3.3

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Note 1 - Organization and Business (Details Textual)	Sep. 30, 2022	May 13, 2022 USD ($)
Number of Countries in which Entity Operates	60
Lot HC 51 [Member]
Market Value of Product		$ 22,000
Lot HC 50 [Member]
Market Value of Product		10,000
Lot B210113 [Member]
Market Value of Product		$ 25,000

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Note 2 - Liquidity and Uncertainties (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Retained Earnings (Accumulated Deficit), Total	$ (114,436,281)		$ (114,436,281)		$ (107,704,274)
Net Income (Loss) Attributable to Parent, Total	(1,971,803)	$ (2,043,207)	(6,732,007)	$ (5,696,544)
Net Income (Loss) Attributable to Parent, Approximation			$ (6,800,000)
Cash Burn Rate	$ 1,100,000

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Note 3 - Summary of Significant Accounting Policies (Details Textual)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2022 USD ($) shares	Sep. 30, 2021 shares	Sep. 30, 2022 USD ($) shares	Sep. 30, 2021 shares	Dec. 31, 2021 USD ($)	Jun. 30, 2022 USD ($)
Number of Operating Segments			2
Short-Term Investments, Total	$ 9,700,000		$ 9,700,000		$ 13,900,000
Accounts Receivable, Allowance for Credit Loss, Ending Balance	110,000		110,000			$ 10,000
Unrecognized Tax Benefits, Ending Balance	$ 0		0		0
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense, Total			$ 0		$ 0
Open Tax Year			2018 2019 2020 2021
Weighted Average Number of Shares Outstanding, Basic, Total (in shares) | shares	70,975,420	69,573,795	70,480,706	68,609,143
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | shares			8,135,704	7,674,239

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Note 4 - Inventories (Details Textual) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Slow Moving Medical Finished Goods [Member]
Inventory Valuation Reserves	$ 880,000	$ 450,000

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Note 4 - Inventories - Summary of Inventories (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Component parts and other materials	$ 162,660	$ 79,339
Total inventories	1,551,842	1,541,513
Dental Segment [Member]
Finished goods, net	(900,396)	(342,465)
Finished goods, net	900,396	342,465
Medical Segment [Member]
Finished goods, net	(488,786)	(1,119,709)
Finished goods, net	$ 488,786	$ 1,119,709

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Note 5 - Advances on Contracts (Details Textual) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Advances on Inventory Purchases	$ 1,581,483	$ 1,309,260

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Note 6 - Investment in and Transactions With Equity Investees (Details Textual) ¥ in Millions			3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended
	Oct. 08, 2021 USD ($)	Oct. 08, 2021 CNY (¥)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2021 USD ($)	Jun. 30, 2014 USD ($)
Income (Loss) from Equity Method Investments			$ 0	$ (69,905)		$ 0	$ (164,461)
Milestone China [Member]
Equity Method Investments										$ 1,000,000
Equity Method Investment, Ownership Percentage										40.00%
Financing Receivable, after Allowance for Credit Loss, Total								$ 2,800,000
Proceeds from Collection of Finance Receivables								$ 950,000
Contract with Customer, Liability, Total			100,000		$ 100,000	100,000			$ 89,000
Income (Loss) from Equity Method Investments			(0)	(70,000)		(0)	(164,000)
Milestone China [Member] | Accounts Receivable from Related Parties [Member]
Equity Method Investment, Deferred Intercompany Profit (Loss)			$ 0		0	0			$ 0
Milestone China [Member] | Instruments [Member]
Revenue from Related Parties				$ 360,000	$ 0	$ 370,000	$ 1.4
Milestone Beijing [Member] | Milestone China [Member]
Equity Method Investment, Ownership Percentage										75.00%
Anhui [Member]
Equity Method Investment, Ownership Percentage									28.40%
Anhui [Member] | Milestone China [Member] | Chief Executive Officer [Member]
Equity Method Investment, Ownership Percentage	28.40%	28.40%
Proceeds from Sale of Equity Method Investments	$ 440,351	¥ 2,840

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Note 7 - Patents (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Amortization of Intangible Assets			$ 39,982	$ 34,060
Finite-Lived Intangible Asset, Expected Amortization, Remainder of Fiscal Year	$ 13,000		13,000
Finite-Lived Intangible Asset, Expected Amortization, Year One	52,000		52,000
Finite-Lived Intangible Asset, Expected Amortization, Year Two	34,000		34,000
Finite-Lived Intangible Asset, Expected Amortization, Year Three	28,000		28,000
Finite-Lived Intangible Asset, Expected Amortization, after Year Three	111,000		111,000
Patents [Member]
Amortization of Intangible Assets	$ 13,000	$ 11,000	$ 40,000	$ 34,000
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, 2022	Dec. 31, 2021
Patents, cost	$ 1,377,863	$ 1,377,863
Patents, accumulated amortization	(1,140,227)	(1,100,244)
Patents-foundation intellectual property	237,636	277,619
Foundation Intellectual Property Patents [Member]
Patents, cost	1,377,863	1,377,863
Patents, accumulated amortization	(1,140,227)	(1,100,244)
Patents-foundation intellectual property	$ 237,636	$ 277,619

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Note 8 - Stockholders' Equity (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020
Deferred Compensation Arrangement with Individual, Shares Authorized for Issuance (in shares)	2,027,153	2,005,661	2,027,153	2,005,661	2,066,343	2,428,329
Share-Based Payment Arrangement, Option [Member]
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)			2 years 9 months
Share-Based Payment Arrangement, Option [Member] | Share-Based Payment Arrangement, Employee [Member]
Share-Based Payment Arrangement, Expense	$ 5,000	$ 5,000	$ 15,000	$ 20,000
Restricted Stock [Member]
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)			1 year 3 months 10 days
Share-Based Payment Arrangement, Expense	$ 10,400	$ 16,667	$ 37,500	$ 37,500
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance (in shares)	724,162		724,162		96,557
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total	$ 46,875		$ 46,875
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)			975,148
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)			$ 0.86
The 2020 Equity Incentive Plan [Member] | Share-Based Payment Arrangement, Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Additional Shares Authorized (in shares)			4,000,000
Chief Executive Officer, Chief Financial Officer and Employees [Member]
Deferred Compensation Arrangement with Individual, Shares Authorized for Issuance (in shares)	1,852,789	1,861,639	1,852,789	1,861,639
Non-Employees [Member]
Common Stock, Capital Shares Reserved for Future Issuance (in shares)	174,364	144,024	174,364	144,024
Vice Chairman of the Board of Directors [Member] | The 2020 Equity Incentive Plan [Member] | Share-Based Payment Arrangement, Option [Member]
Share-Based Payment Arrangement, Amount Capitalized	$ 232,998	$ 165,000	$ 1,100,000	$ 451,000
Territory Manager [Member] | Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance (in shares)	49,616		49,616
Board of Directors [Member] | Restricted Stock [Member]
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)			6 months
Share-Based Payment Arrangement, Expense	$ 167,000		$ 381,000
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total	$ 356,000		$ 356,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)			899,300
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)			$ 0.82
Board of Directors [Member] | Restricted Stock [Member] | Share-Based Payment Arrangement, Tranche One [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage			25.00%
Board of Directors [Member] | Restricted Stock [Member] | Share-Based Payment Arrangement, Tranche Two [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage			25.00%

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Note 8 - Stockholders' Equity - Warrants (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Outstanding, number of shares (in shares)	4,268,221
Outstanding , weighted average exercise price (in dollars per share)	$ 2.18
Outstanding, weighted average remaining life (Year)	9 months	1 year 6 months
Outstanding, intrinsic value	$ 91,226	$ 1,187,546
Issued, number of shares (in shares)	0
Issued, weighted average exercise price (in dollars per share)	$ 0
Exercised, number of shares (in shares)	0
Exercised, weighted average exercise price (in dollars per share)	$ 0
Outstanding , number of shares (in shares)	4,268,221	4,268,221
Outstanding , weighted average exercise price (in dollars per share)	$ 2.18	$ 2.18

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Note 8 - Stockholders' Equity - Summary of Shares to be Issued (Details) - shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Shares-to-be-issued, outstanding (in shares)	2,066,343	2,428,329
Granted in current period (in shares)	108,148	33,238
Issued in current period (in shares)	(147,338)	(455,906)
Shares-to-be-issued, outstanding (in shares)	2,027,153	2,005,661

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Note 8 - Stockholders' Equity - Summary of Option Activity for Employees and Non-employees (Details) - Share-Based Payment Arrangement, Option [Member] - USD ($)	6 Months Ended	9 Months Ended	12 Months Ended
	Jun. 30, 2022	Sep. 30, 2022	Dec. 31, 2021
Share-Based Payment Arrangement, Employee [Member]
Number of options (in shares)	2,843,693	2,843,693
Weighted average exercise price, outstanding (in dollars per share)	$ 2.39	$ 2.39
Weighted average remaining contractual life, outstanding (Year)		6 years 7 months 17 days	7 years 8 months 8 days
Aggregate intrinsic value, outstanding		$ 0	$ 49,246
Number of options, granted (in shares)		216,296
Weighted average exercise price, granted (in dollars per share)		$ 1.52
Weighted average remaining contractual life, granted (Year)		2 years 2 months 23 days
Number of options, exercised (in shares)		0
Weighted average exercise price, exercised (in dollars per share)		$ 0
Number of options, forfeited or expired (in shares)		0
Weighted average exercise price, forfeited or expired (in dollars per share)		$ 0
Number of options (in shares)		3,059,989	2,843,693
Weighted average exercise price, outstanding (in dollars per share)		$ 2.29	$ 2.39
Number of options exercisable (in shares)		994,914
Weighted average exercise price, exercisable (in dollars per share)		$ 2.18
Weighted average remaining contractual life, exercisable (Year)		5 years 3 months 10 days
Aggregate intrinsic value, exercisable		$ 0
Share-Based Payment Arrangement, Nonemployee [Member]
Number of options (in shares)			83,330
Weighted average exercise price, outstanding (in dollars per share)			$ 1.85
Weighted average remaining contractual life, outstanding (Year)	2 years 6 months 29 days		3 years 3 months 29 days
Aggregate intrinsic value, outstanding	$ 4,333		$ 49,748
Number of options (in shares)	83,330
Weighted average exercise price, outstanding (in dollars per share)	$ 1.85
Number of options exercisable (in shares)	69,441
Weighted average exercise price, exercisable (in dollars per share)	$ 1.68
Weighted average remaining contractual life, exercisable (Year)	2 years 4 months 13 days
Aggregate intrinsic value, exercisable	$ 4,333

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Note 8 - Stockholders' Equity - Schedule of Restricted Stock (Details) - Restricted Stock [Member]	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Non-vested as January 1, 2022 (in shares)	96,557
Non-vested as January 1, 2022 (in dollars per share) | $ / shares	$ 2.33
Granted, Shares (in shares)	975,148
Granted, Weighted Average Grant-Date Fair Value per Award (in dollars per share) | $ / shares	$ 0.86
Vested, Shares (in shares)	(224,850)
Cancelled, Shares (in shares)	(122,693)
Non-vested, Shares (in shares)	724,162
Non-vested, Weighted Average Grant-Date Fair Value per Award (in dollars per share) | $ / shares	$ 1.11

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Note 9 - Income Taxes (Details Textual)	9 Months Ended
	Sep. 30, 2022
Percentage of Valuation Allowance	100.00%

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Note 10 - Segment and Geographic Data (Details Textual)	9 Months Ended
	Sep. 30, 2022
Number of Reportable Segments	2

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Note 10 - Segment and Geographic Data - Summary by Reporting and Operating Segments (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Product sales, net	$ 2,215,699	$ 2,108,233	$ 6,564,969	$ 7,458,678
Operating Income (Loss)	(2,013,495)	(1,980,921)	(6,812,856)	(5,837,866)
Depreciation and Amortization	16,661	16,353	50,121	52,113
Income (loss) before taxes and equity in earnings of affiliates	(1,985,483)	(1,985,529)	(6,786,037)	(5,573,290)
Total assets	15,278,459		15,278,459		$ 19,809,744
Corporate, Non-Segment [Member]
Operating Income (Loss)	(1,384,940)	(1,236,297)	(3,850,189)	(4,713,353)
Depreciation and Amortization	14,691	14,220	44,328	42,398
Income (loss) before taxes and equity in earnings of affiliates	(1,354,219)	(1,238,191)	(3,815,071)	(4,515,976)
Total assets	10,331,332		10,331,332		12,273,064
Dental Segment [Member]
Product sales, net	2,206,499	2,076,233	6,509,619	7,334,628
Dental Segment [Member] | Operating Segments [Member]
Product sales, net	2,206,499	2,076,233	6,509,619	7,334,628
Operating Income (Loss)	308,913	193,252	826,175	1,844,083
Depreciation and Amortization	951	892	2,737	3,458
Income (loss) before taxes and equity in earnings of affiliates	307,699	191,864	822,270	1,915,148
Total assets	4,083,657		4,083,657		6,163,169
Medical Segment [Member]
Product sales, net	9,200	32,000	55,350	124,050
Medical Segment [Member] | Operating Segments [Member]
Product sales, net	9,200	32,000	55,350	124,050
Operating Income (Loss)	(937,468)	(937,876)	(3,788,842)	(2,968,596)
Depreciation and Amortization	1,019	1,241	3,056	6,257
Income (loss) before taxes and equity in earnings of affiliates	(938,963)	$ (939,202)	(3,793,236)	$ (2,972,462)
Total assets	$ 863,470		$ 863,470		$ 1,373,511

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Note 10 - Segment and Geographic Data - Summary of Operations by Geographic Area (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Product sales, net	$ 2,215,699	$ 2,108,233	$ 6,564,969	$ 7,458,678
Dental Segment [Member]
Product sales, net	2,206,499	2,076,233	6,509,619	7,334,628
Medical Segment [Member]
Product sales, net	9,200	32,000	55,350	124,050
Domestic [Member]
Product sales, net	876,318	790,382	2,826,761	2,788,083
Domestic [Member] | Dental Segment [Member]
Product sales, net	867,118	778,882	2,791,411	2,768,433
Domestic [Member] | Medical Segment [Member]
Product sales, net	9,200	11,500	35,350	19,650
Rest of World [Member]
Product sales, net	1,339,381	956,996	3,378,244	3,277,404
Rest of World [Member] | Dental Segment [Member]
Product sales, net	1,339,381	936,496	3,358,244	3,173,004
Rest of World [Member] | Medical Segment [Member]
Product sales, net	0	20,500	20,000	104,400
CHINA
Product sales, net	0	360,855	359,964	1,393,191
CHINA | Dental Segment [Member]
Product sales, net	0	360,855	359,964	1,393,191
CHINA | Medical Segment [Member]
Product sales, net	0	0	0	0
Instruments [Member] | Domestic [Member]
Product sales, net	171,841	36,480	449,836	391,250
Instruments [Member] | Domestic [Member] | Dental Segment [Member]
Product sales, net	164,341	36,480	442,336	391,250
Instruments [Member] | Domestic [Member] | Medical Segment [Member]
Product sales, net	7,500	0	7,500	0
Instruments [Member] | Rest of World [Member]
Product sales, net	436,069	257,563	1,050,443	855,403
Instruments [Member] | Rest of World [Member] | Dental Segment [Member]
Product sales, net	436,069	253,063	1,050,443	792,903
Instruments [Member] | Rest of World [Member] | Medical Segment [Member]
Product sales, net	0	4,500	0	62,500
Instruments [Member] | CHINA
Product sales, net	0	0	0	228,000
Instruments [Member] | CHINA | Dental Segment [Member]
Product sales, net	0	0	0	228,000
Instruments [Member] | CHINA | Medical Segment [Member]
Product sales, net	0	0	0	0
Handpieces [Member] | Domestic [Member]
Product sales, net	680,173	732,649	2,301,615	2,338,699
Handpieces [Member] | Domestic [Member] | Dental Segment [Member]
Product sales, net	678,473	721,149	2,275,865	2,319,049
Handpieces [Member] | Domestic [Member] | Medical Segment [Member]
Product sales, net	1,700	11,500	25,750	19,650
Handpieces [Member] | Rest of World [Member]
Product sales, net	881,616	690,133	2,285,367	2,379,592
Handpieces [Member] | Rest of World [Member] | Dental Segment [Member]
Product sales, net	881,616	674,133	2,265,367	2,337,692
Handpieces [Member] | Rest of World [Member] | Medical Segment [Member]
Product sales, net	0	16,000	20,000	41,900
Handpieces [Member] | CHINA
Product sales, net	0	360,855	359,964	1,165,191
Handpieces [Member] | CHINA | Dental Segment [Member]
Product sales, net	0	360,855	359,964	1,165,191
Handpieces [Member] | CHINA | Medical Segment [Member]
Product sales, net	0	0	0	0
Accessories [Member] | Domestic [Member]
Product sales, net	24,304	21,253	75,310	58,134
Accessories [Member] | Domestic [Member] | Dental Segment [Member]
Product sales, net	24,304	21,253	73,210	58,134
Accessories [Member] | Domestic [Member] | Medical Segment [Member]
Product sales, net	0	0	2,100	0
Accessories [Member] | Rest of World [Member]
Product sales, net	21,696	9,300	42,434	42,409
Accessories [Member] | Rest of World [Member] | Dental Segment [Member]
Product sales, net	21,696	9,300	42,434	42,409
Accessories [Member] | Rest of World [Member] | Medical Segment [Member]
Product sales, net	0		0	0
Accessories [Member] | CHINA
Product sales, net	0	0	0	0
Accessories [Member] | CHINA | Dental Segment [Member]
Product sales, net	0		0	0
Accessories [Member] | CHINA | Medical Segment [Member]
Product sales, net	$ 0	$ 0	$ 0	$ 0

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Note 11 - Concentrations (Details Textual) - Customer Concentration Risk [Member]	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Revenue Benchmark [Member] | Distributor One [Member]
Concentration Risk, Percentage	11.00%	17.00%	36.00%	19.00%
Revenue Benchmark [Member] | Distributor Two [Member]
Concentration Risk, Percentage	32.00%			34.00%
Accounts Receivable [Member] | Distributor One [Member]
Concentration Risk, Percentage			13.00%		13.00%
Accounts Receivable [Member] | Distributor Two [Member]
Concentration Risk, Percentage			15.00%		28.00%
Accounts Receivable [Member] | Distributor Three [Member]
Concentration Risk, Percentage			18.00%		29.00%
Accounts Receivable [Member] | Distributor Four [Member]
Concentration Risk, Percentage			36.00%

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Note 12 - Related Party Transactions (Details Textual) - USD ($)		3 Months Ended		9 Months Ended
	Jul. 10, 2017	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Mar. 02, 2021	Mar. 01, 2021
Accrued Expenses, Related Party		$ 333,483		$ 333,483		$ 414,241
Interim Chief Executive Officer [Member]
Due to Related Parties, Current, Total		166,000		166,000		0
Royalty on Net Sales, Percentage							2.50%
Director Clinical Affair [Member]
Royalty on Net Sales, Percentage							2.50%	5.00%
Director of Clinical Affairs [Member]
Accounts Payable, Related Parties		108,000		108,000		123,000
Royalty Expense		108,000	$ 74,000	322,000	$ 322,000
Professional Fees		39,000	39,000	115,000	115,000
Previous President and Chief Executive Officer [Member]
Increase (Decrease) in Deferred Compensation	$ (100,000)
Employment Agreement, Base Compensation	200,000
Consultant [Member]
Increase (Decrease) in Deferred Compensation	(100,000)
Employment Agreement, Base Compensation	$ 200,000
Managing Director, China Operations [Member]
Deferred Compensation Arrangement with Individual, Compensation Expense		50,000	50,000	150,000	75,000
US Asian Consulting Group, LLC [Member]
Deferred Compensation Arrangement with Individual, Compensation Expense		50,000	50,000	150,000	75,000
Manufacturing Agreement for Handpieces [Member]
Related Party Transaction, Purchases from Related Party		658,000	417,000	2,300,000	1,300,000
Manufacturing Agreement for Handpieces [Member] | Accounts Payable, Related Parties, Current [Member]
Due to Related Parties, Current, Total		904,000		904,000		548,000
Accounts Payable, Related Parties		904,000		904,000		395,000
Accrued Expenses, Related Party		0		0		$ 153,000
Consulting Services [Member]
Related Party Transaction, Expenses from Transactions with Related Party		25,000	25,000	75,000	75,000
Deferred Compensation Arrangement with Individual, Compensation Expense		$ 0	$ 15,000	$ 0	$ 45,000

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Note 13 - Commitments (Details Textual)			1 Months Ended	9 Months Ended
	Feb. 25, 2021	Jan. 01, 2005	Aug. 31, 2019 USD ($)	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Advances on Inventory Purchases				$ 1,581,483	$ 1,309,260
Lease, Right-of-Use Asset				484,327	550,511
Lease, Liability				497,931	577,981
Lease, Liability, Current				88,933	81,001
Lease, Liability, Noncurrent				408,998	476,980
Finance Lease, Liability, Total				22,273	28,607
Finance Lease, Liability, Current				9,153	8,545
Finance Lease, Liability, Noncurrent				$ 13,120	20,062
Additional Percentage of Director Compensation Sales Value Using Other Kind of Technology	2.50%	5.00%
Office Lease for Headquarter in Livingston, New Jersey [Member]
Lessee, Operating Lease, Term of Contract (Year)			7 years
Lessee, Operating Lease, Electric Charge Per Square Foot			$ 2.00
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 Number Of Units				2,410
Purchase Commitment, Remaining Minimum Amount Committed				$ 1,900,000	2,600,000
Advances on Inventory Purchases				1,500,000	1,300,000
Payments for Inventory Purchases				1,300,000
Purchase Commitment for Sound Chips for Future Instruments [Member]
Advances on Inventory Purchases				191,000
Purchase Commitment for Handpiece Replacement [Member]
Advances on Inventory Purchases				23,000
Purchase Commitment For Epidural Instrument [Member]
Purchase Commitment, Remaining Minimum Amount Committed				$ 41,000	34,000
Advances on Inventory Purchases					$ 34,000

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Note 13 - Commitments - Lease Expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Cash paid for operating lease liabilities	$ 31,999	$ 31,882	$ 95,996	$ 95,645
Cash paid for finance lease liabilities	$ 2,685	$ 2,685	$ 8,055	8,055
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
Finance leases (years) (Year)	2 years 3 months 18 days	5 years 6 months	2 years 3 months 18 days	5 years 6 months
Operating leases (years) (Year)	4 years 6 months	3 years 3 months 18 days	4 years 6 months	3 years 3 months 18 days