XML 36 R24.htm IDEA: XBRL DOCUMENT v2.4.0.8
Commitments and Other
9 Months Ended
Sep. 30, 2014
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Other

NOTE – 17 COMMITMENTS AND OTHER

Milestone has informal arrangements for the manufacture of its products. STA, single tooth anesthesia, CompuDent and CompuMed instruments are manufactured for Milestone by Tricor Systems, Inc. pursuant to specific purchase orders. The STA and The Wand Handpiece with Needle are supplied to Milestone by a contractor in the United States, which arranges for its manufacture with two factories in China.

The termination of the manufacturing relationship with any of the above manufacturers could have a material adverse effect on Milestone’s ability to produce and sell its products. Although alternate sources of supply exist and new manufacturing relationships could be established, Milestone 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, whether or not as a result of termination of such a relationship, would adversely affect Milestone.

A portion of the technology underlying the SafetyWand and CompuFlo, and an improvement to the CompuDent were developed by the Director of Clinical Affairs and assigned to us. Milestone purchased this technology pursuant to an agreement dated January 1, 2005. The Director will receive additional payments of 2.5% of the total sales of products using certain of these technologies, and 5% of the total sales of products using certain other of the technologies. In addition, the Director is granted, pursuant to the agreement, an option to purchase, at fair market value on the date of the grant, 8,333 shares of the common stock upon the issuance of each additional patent relating to these technologies. If products produced by third parties use any of these technologies (under license from us) then the Director will receive the corresponding percentage of the consideration received by Milestone for such sale or license. For the three months ended September 30, 2014 and 2013, Milestone expensed the Director’s royalty fee of $89,600 and $77,886, respectively. Milestone expensed the Director’s royalty fees of $291,714 and $256,127 for the nine months ended September 30, 2014 and 2013, respectively. Additionally, for the three months ended September 30, 2014 and 2013, Milestone expensed consulting fees to the Director of $14,690 and $12,350, respectively. Milestone expensed consulting fees to the Director of $39,390 and $90,350, for the nine months ended September 30, 2014 and 2013, respectively.

In January 2010, Milestone issued a purchase order to Tricor Systems Inc for the purchase of 12,000 STA Instruments to be delivered over the next three years. The purchase order is for $5,261,640. As of September 30, 2014, there are 3,420 STA instruments remaining on the purchase order. Milestone expects to receive these instruments by December 31, 2014. The advances on contracts have been classified as current and long term at September 30, 2014.

In August 2013, a shareholder of Milestone entered into a three year agreement with Milestone to provide financial and business strategic services. The fee for these services is $100,000 annually.

 

Beginning October 1, 2014, Milestone Scientific Inc acquired 100 percent of an inactive, previously established company and merged the Milestone dental business into this company. As part of this merger, Milestone now owns 100 percent of this new subsidiary Wand Dental Inc.  The subsidiary, Wand Dental Inc, has an exclusive distributor and licensing agreement for Milestone dental instruments and handpieces for the worldwide. All current Milestone distributors will be assigned to Wand Dental Inc.