Note 10 - Related Party Transactions

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE 10 -- RELATED PARTY TRANSACTIONS

United Systems

Milestone Scientific has a supply  agreement with United Systems (whose controlling shareholder, Tom Cheng, is a significant stockholder of Milestone Scientific), the principal manufacturer of our handpieces, pursuant to which manufacture is under specific purchase orders, but without minimum purchase commitments. Purchases from this manufacturer were approximately $636,000 and $1.9 million, respectively for the three and nine months ended September 30, 2023. Purchases from this manufacturer were approximately $658,000 and $2.3 million, respectively, for the three and nine months ended September 30, 2022.

As of September 30, 2023 and December 31, 2022, Milestone Scientific owed this manufacturer approximately $630,000, and $819,000, respectively, which is included in accounts payable, related party and accrued expense, related party on the unaudited condensed consolidated balance sheets. 

Other

During 2022, K. Tucker Andersen, a significant stockholder of Milestone Scientific, entered into an agreement with Milestone Scientific to provide financial and business strategic services. Expenses recognized on this agreement were $25,000 and $75,000 for three and nine months ended September 30, 2022, respectively. The agreement was not renewed for 2023.

Royalties payable to our Director of Clinical Affairs was approximately $104,000 and $370,000 for the three and nine months ended September 30, 2023, respectively. Royalties payable to our Director of Clinical Affairs was approximately $108,000 and $322,000 for the three and nine months ended September 30, 2022, respectively. Additionally, Milestone Scientific expensed consulting fees to the Director of Clinical Affairs of $39,000 and $117,000 for the three and nine months ended September 30, 2023 and 2022, respectively.

As of  September 30, 2023 and December 31, 2022, Milestone Scientific owed the Director Clinical Affairs for royalties of approximately $104,000 and $120,000, respectively, which is included in accounts payable, related party and accrued expense, related party, in the condensed consolidated balance sheet.

Pursuant to a Succession Agreement dated April 6, 2021 between Leonard Osser and the Company: (i) the Employment Agreement dated as of July 10, 2017 between Mr. Leonard 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 was 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 related to the Managing Director, China Operations for the three and nine months ended September 30, 2023 and 2022, respectively. The Company recorded expense of $50,000 and $150,000 related to the US Asian Consulting Group, LLC for the three and nine months ended September 30, 2023 and 2022,  respectively.