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Commitments and Other
 12 Months Ended
Dec. 31, 2012
Commitments and Other [Abstract]  
COMMITMENTS AND OTHER

NOTE O — COMMITMENTS AND OTHER

(1) Lease Commitments

The headquarters for the Company is located at 220 South Orange Ave, Livingston, New Jersey. The Company leases approximately 6,300 square feet of office space. The lease term expires June 30, 2014 at a monthly cost of $6,942. Additionally, since November 2010, Milestone leased a corporate apartment in Maplewood, NJ on a month-to-month basis which it terminated in December 2011. A third party distribution and logistics center in Pennsylvania handles shipping and order fulfillment on a month-to-month basis.

Aggregate minimum rental commitments under noncancelable operating leases are as follows:

 

         
    Year Ending December 31,  

2013

   $ 90,615  

2014

     48,962  

2015

     7,309  

2016

     5,965  

2017

     5,965  
   

 

 

  
    $ 158,816  
   

 

 

  

For the years ended December 31, 2012 and 2011, respectively, rent expense amounted to $83,273 and $130,806 respectively.

(2) Contract Manufacturing Arrangement

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 in China. These contractors provide an informal long term financing basis for the Company.

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.

(3) Other Commitments

The technology underlying the SafetyWand and CompuFlo, and an improvement to the controls for 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, for 43,424 shares of restricted common stock and $145,000 in cash, payable on April 1, 2005. In addition, 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, he 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 he will receive the corresponding percentage of the consideration received by Milestone for such sale or license. Milestone expensed the Director’s royalty fees of $306,983 and $291,783 in 2012 and 2011, respectively. Additionally, Milestone expensed consulting fee to the Director $156,000 for year ended 2012 and 2011.

In January 2010, the Company issued a purchase order to Tricor Instruments for the purchase of 12,000 STA Instruments to be delivered over the next three years. The purchase order is for $5,261,640. The Company has a remaining balance of approximately $609,000 on the advance and will continue to make periodic payments in 2013 to purchase the parts necessary to complete this production. As of December 31, 2012, the Company’s production and sales of instruments to this commitment has been delayed. Consequently, advances to contractor has been classified as current and long term at December 31, 2012.

 

(4) Subsequent Events

Subsequent to December 31, 2012, Milestone issued 218,420 shares of common stock for various reasons. The largest valued of shares (100,000 shares, $140,000) were issued to a supplier that purchased handpieces for the Company.

Milestone established a joint venture, Milestone Education, LLC, in the first quarter of 2013. Milestone contributed $50,000 as did the other joint venture partner. Each of the partners owns fifty (50) percent of the joint venture. The joint venture is expected to provide training and education to our dentists throughout the world.

In March 2013, the term of the suspended 2008 employment agreement between the Company and Leonard Osser (under which he is employed as an executive, but not the CEO) was extended from 40-months to 120-months.